Commons Sitting of 15 May 1996

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS

  Privatisation
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]
  9.35 am
  Mr. John Marshall: When Baroness Thatcher formed her first Administration in 1979, she was committed to a policy of privatisation because she believed that it would increase industrial efficiency, that it would lead to higher investment once the industries were removed from the dead hand of the Treasury, that the industries would provide a better service for the consumer and that that was in the national interest.
  It is significant that in 1978–79, the external financing requirement of the nationalised industries was £2 billion. It is ironic that today they pay into the Treasury as much in corporation tax as they took out of it that year for their financial needs. The true extent of the Thatcherite revolution can be seen from the fact that when the Leader of the Opposition went to the United States he assured the Americans that it was safe in his hands.
  Privatisation has led to a massive increase in investment. For example, British Telecom has invested more than £20 billion and it has given £7.6 billion back to the taxpayer in corporation tax. The water industry has invested £15 billion—with Thames Water investing £2.5 billion and South West Water investing more than £1 billion. PowerGen has invested more than £2 billion.
  Investment has been accompanied by a massive increase in efficiency. For example, in British Telecom the number of full-time employees fell from 241,000 in 1984 to 137,500 in 1995. At the same time, the number of exchange line connections increased from 19,828 to 27,077 and the number of connections per employee increased from 82 to 197—an increase of 140 per cent. over 11 years.
  British Gas, PowerGen, National Power, British Airways, the British Steel Corporation and the regional electricity companies have also experienced increases in efficiency. For example, British Steel saw a reduction in the number of its employees from 67,000 in 1986 to 40,000 in 1995. Turnover per employee more than doubled over that time and productivity increased by 50 per cent. PowerGen did even better in terms of productivity—it doubled over five years.
  London Electricity's sales per employee increased by one third over four years. Over four years, it reduced the number of its employees by 26 per cent. and it increased capital expenditure by 22 per cent. British Airways—the world's favourite airline—is no longer subsidised and it
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  saw a growth in productivity of 60 per cent. between 1987 and 1995. In British Gas sales per employee increased by 120 per cent. between 1985 and 1994.
  There are those who would say that the reduction in the number of employees created unemployment, but that is not true. One has to look at employment in the economy as a whole. One does not increase employment in the energy-intensive industries by forcing them to pay more for their gas and electricity. The price of gas and electricity has dropped in real terms, which has led to increased employment in energy-intensive industries because they are now much more competitive. We have to recognise that it is unfair to force pensioners and the low paid to pay more for gas, as happened when the industry was nationalised as compared with when it is in the private sector.
  Productivity increases have been accompanied by a dramatic rise in the quality of customer service. When I lived in Ealing in the early 1980s, I remember getting off the train and trying to use a pay telephone at the station. One could guarantee that many telephones would not work. I shall cite some figures that demonstrate the huge improvement in the pay telephone service in this country. In 1987, there were 80,000 pay telephones, of which 77 per cent. usually worked—that is, 61,600 telephones. Today there are 128,000 pay telephones, of which 96 per cent.—or 122,880 telephones—usually work.
  Dame Elaine Kellett-Bowman rose—
  Mr. Marshall: No, I shall not give way as the debate is time limited. We have lost three minutes due to prayers—which is a worthy cause—so I shall not give way to anyone.
  The number of working pay telephones has increased by 99.5 per cent. since 1987. What is true of pay telephones is equally true of other BT services. In 1984, only 74 per cent. of residential telephones were installed within the timeframe promised to the customer. Today the figure is 96.6 per cent. In 1984, 76 per cent. of private circuits were completed by the promised date. Today the figure is 98.4 per cent. It is no wonder that in January this year the Director General of Oftel said:
  "Comparisons with statistics on BT's performance pre-privatisation and later in the 1980s show customers today are benefiting from significantly improved services".
  BT has delivered to the customer not only better services but lower prices. Local calls now cost 34 per cent. less in real terms than before privatisation. The price of a local call in Britain is lower than in Germany, and our local call areas are twice as large as in Germany, four times larger than in the United States and 12 times larger than in Canada. The price of national calls has fallen by 64 per cent. and the price of international calls has fallen by 46 per cent. in real terms.
  What is true of BT is equally true of British Airways. It made a loss when nationalised, but is now the world's favourite airline. British Steel, which lost markets when in the public sector, has managed to rebuild its export markets. Even motorway service stations, which were the butt of the humorist when the land was owned by the state, perform much better.
  The water companies—about which we occasionally hear the odd word of criticism—have improved also. South West Water now has 99.6 per cent. compliance with the drinking water directive and another 50 beaches in

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  its area meet European Union standards. The privatised industries have delivered better services and lower prices. Earlier this year, electricity consumers benefited from the flotation of the national grid and saw their electricity bills decrease by £50. Due to the operation of Ofgas, gas consumers will see their gas bills decrease by £50 also. That is what competition and privatisation do for the consumer. Industries such as gas, electricity and telecommunications are much more tightly regulated in the private sector than in the public sector.
  Privatisation has also encouraged wider share ownership. There were about 2 million to 3 million shareholders in 1978–79. Today there are 10 million private shareholders—many of whom are employees of the former nationalised industries. I remember visiting National Freight in the mid-1980s. I asked a telephonist whether she owned shares in the company and she replied that she did. She continued, "The only trouble is that I listened to the trade unions and did not buy as many shares as I should have. I would be better off today if I had bought more". The trade unions told my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) that the privatisation of National Freight would not work, but it has been a major success.
  An amusing aside is that some of the trade unions that were so critical of privatisation have been willing to invest in the privatised industries. The National Union of Rail, Maritime and Transport Workers, which is telling people not to invest in Railtrack, has invested in Eastern Electricity—where it took a nice turn—in Thames Water, British Gas and in Cable and Wireless. The GMB is the prize example of a trade union that has invested in privatised stock. It invested £170,000 in British Aerospace, a mere £62,000 in British Airways, £201,000 in British Steel, £230,000 in Enterprise Oil and £131,000 in Cable and Wireless. It has sold its investments of £22,000 in the British Airports Authority, £30,000 in BT and £134,000 in Rolls-Royce. That union has invested a total of £530,000 in privatised stock. I sometimes suspect that, when the Trades Union Congress meets, its members discuss their investments in the privatised utilities and decide which one to go for next.
  A document entitled "From Finchley to the World" was published some years ago upon Baroness Thatcher's completion of 10 years in office. It referred to her role on the world stage, but it could have referred also to the fact that privatisation—which is such a success in the United Kingdom—has been copied across the globe. Every Government in the free world—from Russia in the east, to Australia in the south and to Canada in the west—is committed to privatisation policies. Some of the most enthusiastic apostles of privatisation come from the former communist countries: they discovered that the dismal performance of centrally planned economies can be righted only through the introduction of the private sector.
  As I said at the beginning of my speech, the Leader of the Opposition said in Washington that he would defend the Thatcherite revolution. I suspect that he said that not out of conviction, but as an act of political cynicism and convenience: he recognises that privatisation is popular with consumers and with the general public.
  Privatisation involves much more than simply selling state assets: it involves using free enterprise to provide services for the public and it involves compulsory
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  competitive tendering, which has saved council taxpayers £400 million. Those hon. Members who would abolish compulsory competitive tendering must tell the council taxpayers of this country how they would account for the £400 million saving which has led to better service provision by local authorities and to lower council tax bills.
  In talking about privatisation, one must mention also the private finance initiative. It is not simply a funding initiative—if it were, it would be bad value for the taxpayer because the Treasury can always borrow more cheaply than a public company. The private finance initiative involves using private sector management skills to accomplish tasks that would not be achieved as efficiently in the state sector. That is demonstrated by the application of the PFI in prisons and the health service and particularly with the new Northern line trains. That is one of the earliest and most successful PFI projects which will allow many of my constituents to travel in better trains next year. Let us hope that those trains are delivered and are up and running before the general election.
  Privatisation has led to a much better performance by the British economy. The concept is copied across the world and it has benefited consumers, industrialists and the economy at large. I look forward to hearing the Minister commend it to the House.
  9.48 am
  The Financial Secretary to the Treasury (Mr. Michael Jack): I congratulate my hon. Friend the Member for Hendon, South (Mr. Marshall) on securing the debate, and on the robust and enthusiastic way in which he has endorsed a revolution in the way in which business is done in this country. I am grateful to him for giving us the opportunity to take stock of our privatisation programme's successes, which he so eloquently put before the House. I hope that the Opposition will take the opportunity of taking stock of what he has said by reading his perceptive comments. It is sad that they are not here in large numbers to hear what we have to say.
  The Labour party now talks about being in favour of private enterprise, but, as my hon. Friend mentioned, in practice, it has consistently opposed each privatisation. It talks about promoting stakeholding, but, again, it has opposed privatisation, which has offered the opportunity for real stakeholding by millions of consumers and shareholders in this country's key industries.
  It is worth reminding ourselves of the fundamental nature of the changes that my hon. Friend has attested to. In 1979, nationalised industries cost the taxpayer some £50 million a week. Now privatised industries contribute some £55 million a week to the Exchequer. We have increased the size of the private sector by an amount equivalent to 9 per cent. of gross domestic product.
  In 1979, nationalised industries accounted for more than 11 per cent. of GDP; now it is around 2 per cent. Forty-eight major businesses and dozens of others have been privatised, with Railtrack to follow next week. A total of 950,000 jobs have been transferred into the private sector. Proceeds have totalled £64 billion, helping to reduce Government debt, to restore public finances and to free up resources for private investment. My hon. Friend rightly drew our attention to the fact that we have increased the number of shareholders from 3 million to 10 million, more than tripling the number of people with a real stake in this country's major businesses.

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  We have provided the framework for competition and real choice, putting the consumer in the driving seat as the privatised industries have to focus on meeting the consumer's aspirations as well as those of their shareholders. That consumer aspect makes such a fundamental difference between the old nationalised approach and the privatised approach.
  Before privatisation, nationalised industries operated in a regime that was against the interests of the public, in whose name they were ostensibly run. Their prices were set at the whim of Whitehall as their management were shielded from the commercial realities of competition and the profit motive. They had no incentive to improve service to their customers, and their investment needs often went unfulfilled as commercially sensible investment was routinely squeezed out in the face of more pressing public spending needs.
  The resulting inefficiencies were paid for by the customer through higher prices and poor service, by the taxpayer through subsidy, and by the economy generally through underinvestment. As my hon. Friend rightly said, privatisation has dealt with those issues. In contrast, the transfer to the private sector, where there is the discipline of the market or, where necessary, of independent regulation, has transformed the performance of our once nationalised companies.
  A key factor in achieving that has been to introduce competition, wherever possible. That offers the best long-term benefits to consumers. As my hon. Friend rightly pointed out, we see the effects of that in telecommunications, where prices are down and where choice and quality are up. Telecommunication prices have fallen by 40 per cent. in real terms and, as someone whose teenage son has discovered his first girlfriend, I can now, because of the large reduction in bills, allow him to use the telephone without fear. Telephone calls cost less than in France, Germany or Italy.
  Most customers have greater choice of telecommunication supplies. All have access to Mercury for long-distance calls. There are some 4.5 million mobile telephone subscribers, twice as many as in most European countries, a true communication revolution occasioned by the advent of privatisation.
  In gas and electricity, there has been substantial change. So far, larger industrial customers have benefited from competition in supply. As a result, industrial prices for gas and electricity are at their lowest level since 1970, but domestic customers are soon to benefit. From 1998, they will be able to choose supplies. Nine companies have been licensed to supply gas in the south-west. There are pilot schemes and price reductions range from 15 per cent. to 20 per cent. That will maintain the momentum of price reductions—gas bills have already fallen by 17 per cent. In general, privatisation has meant that typical household bills for gas, water and electricity have fallen by £75 per year.
  Freed from the constraints of competing for public funds for investment, privatised companies have been able to spend sums on improving their business on a scale that would not have been possible in the public sector. I make no apology for repeating the points that my hon. Friend mentioned. British Telecom has invested £25 billion and water investment has doubled in five years. A £15 billion programme means that Britain's water is, again as my hon. Friend reminded the House, among the cleanest in Europe and there is £24 billion more to come in the next 10 years.
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  It is not, however, just the former utilities that have benefited. As my hon. Friend reminded the House, no one who has experienced the service provided by British Airways, or who has witnessed the business performance of companies such as Rolls-Royce, British Steel or British Aerospace should doubt that they have benefited enormously from taking their rightful place in the private sector.
  Despite that, our critics say that the privatisation programme is on its last legs. Nothing could be further from the truth. The privatisation of Britain's railway industry—one of the most complex and far reaching of any of our privatisations—is coming to its climax. The three passenger rolling stock companies have been sold through a competition raising £1.8 billion. Seven franchises have been awarded bids. Bids have been invited for a further five and the pre-qualification process is under way for another eight.
  The Railtrack flotation is nearing completion, with shares due to start trading on 20 May. Around £1.9 million registrations were received from the public, clearly showing the all-round interest in Railtrack. I look forward to my right hon. Friend the Secretary of State for Transport announcing on Monday next the outcome of the offer.
  I also look forward to that privatisation bringing about a fundamental change for the better in the culture and performance of the railway industry. So much of the carping comment from Labour Members is about service cuts. The reverse is true. The industry is keen to attract new passengers. For example, many franchisees are committed to enhancing services with new rolling stock. On the London, Tilbury and Southend line between Fenchurch street and Southend, the franchisee is to procure new rolling stock for two thirds of the existing fleet.
  On the midland main line, the franchisee will procure new air-conditioned trains to run additional stopping services between St. Pancras, Derby and Nottingham. Additionally, services are to be enhanced with a proposed service pattern in 1999 offering a dramatic increase in service levels—for example, 10 more services each week day to and from Derby, 10 each week day for Nottingham and 22 for Leicester. Likewise, the London-Gatwick service will dramatically improve. Although looking to the future, I should like to remind the House that, later this summer, there will be the sale of British Energy, including the most modern of our nuclear generating stations.
  Our privatisation programme has not been confined to former nationalised industries. We have been vigorously pursuing a programme to increase the private sector's role in the provision of services hitherto undertaken by the civil service. This year, the Laboratory of the Government Chemist, the Natural Resources Institute and English Heritage's historic property restoration have been transferred to the private sector. Among the civil service candidates for privatisation this year are Her Majesty's Stationery Office and the Chessington Computer Centre. Further candidates are actively being sought. We remain committed to transferring to the private sector activities that will benefit from that.
  It is clear, therefore, that our enthusiasm for the privatisation programme remains undimmed, but privatisation is only one part of our drive to bring private sector skills into public service provision. Contracting out is another, but, most exciting, as my hon. Friend

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  mentioned, is the private finance initiative. That is directed at enhancing the benefits that the private sector can bring to the management of economy sectors that were once the public sector's exclusive preserve. In particular, we are interested in developing partnerships between the public and private sectors, with the former as purchasers of service and the private sector as provider, with quality and cost-effective public services as a result.
  My hon. Friend was right to attest to the Northern line. That £400 million contract requires the delivery of a level of reliability four times that of the best fleet currently operating on the underground. As somebody who used to travel on the route, I can well appreciate my hon. Friend's enthusiasm for that development.
  My hon. Friend the Member for Hendon, South also drew the House's attention to one of Britain's best invisible exports. It is not so much invisible in the way in which its profile is exercised. The sale of our expertise in privatisation has made us the envy of the world.
  All the change that my hon. Friend the Member for Hendon, South described in accurate detail has clearly brought about a change in the Labour party's attitude, which, in accepting the importance of the private sector, has surely conceded the argument that privatisation is right. Nothing showed that more clearly than its attitude to British Telecom. In 1984, at the time of flotation, the Labour party said that it would return to public ownership the public assets and rights—
  Madam Deputy Speaker (Dame Janet Fookes): Order.

  Regulation of Accountancy (AGIP)
  10 am
  Mr. Austin Mitchell: The title of the debate has been changed slightly. The original title was about money laundering. Unfortunately, it appears that if a debate concerns money laundering, it requires a response from the Treasury, which does not appear to know all that much about it. I aim to raise the role of accountants in money laundering, and I congratulate the Under-Secretary of State for Trade and Industry, the hon. Member for Amber Valley (Mr. Oppenheim), on his happy lot in having to reply to the debate. I am sure that he will enjoy it.
  The problem is whether we can regulate accountancy to stop the complicity of accountants in money laundering. That complicity must be on a considerable scale because the Organisation for Economic Co-operation and Development estimates that about £500 billion-worth of funny money is being laundered through western financial institutions—through drugs, crime, and fraud, but mostly drugs. Much of that money must be coming through the United Kingdom and London. Accountants must be involved. Such activity cannot be undertaken without the complicity of accountants in setting up shell companies, fiddling the figures and covering the tracks—and not only small-time accountants and individual companies either. Some of the biggest accountancy houses are involved, too. One must ask why such houses are so keen to set up their organisations in places such as the Channel Islands if it is not to participate in such activity and to do so covertly.
  The problem is that it is very difficult to discover money laundering. The tragedy of the case to which I shall refer was that when it was discovered what was going on—it was fairly clear that money laundering had been taking place—Governments and regulators, who are now committed and should have been then to stopping money laundering, and professionals and administrators just did not want to know about it and did not seem able to deal with it.
  AGIP (Africa), a company incorporated in Jersey, in the oil business in Tunisia and a subsidiary of ENI, the big Italian group, was involved in money laundering. I am not sure why and whether it was being defrauded by its chief accountant, Mr. Zdin, who was making double payments on invoices, or whether the company itself was involved and authorised the activity. Certainly, from March 1983 to January 1985, the company was defrauded of, or laundered, $10.5 million by altering 27 orders and invoices. Such activity had clearly been going on far longer than that—probably since 1976.
  The money was paid to the shell or cut-out companies in England—a process apparently unnoticed by the auditors of AGIP (Africa), Coopers and Lybrand. Indeed, Coopers and Lybrand gave AGIP unqualified annual reports in each of the years concerned. The annual report for 1984, which was again unqualified and dated 26 March 1985, came after the discovery of what had been going on in January that year. Did Coopers and Lybrand know about the activity? Was it co-operating with something that the company wanted—to transfer money through Tunisia's exchange regulations? I do not know, and the question remains unanswered.

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  The system of transferring money had been developed by Mr. Roger Humphrey, who was introduced to it by Yves Coulon, the lawyer of the French interests to whom the money was eventually being transferred. Mr. Humphrey worked first for Minet trust in Guernsey, which used such systems, then for the Tyndall bank, taking the systems with him, and finally, in 1982, he became a partner of Thornton Baker, which is now Grant Thornton.
  Yves Coulon wanted to transfer the schemes to Thornton's as had been done on each previous occasion. Humphrey did not think that that would be possible, so the money was transferred to a correspondent firm, Jackson and Co., accountants in the Isle of Man, although Grant Thornton continued to charge fees for acting as the authorised signatories and to provide companies through which the money was being laundered. I have the invoices and the evidence that that was going on.
  Mr. Humphrey introduced Jacksons not only to Coulon, who then worked directly with the company, but to the High Holborn branch of Lloyds bank. The procedure for laundering the money was to set up a shell company with no assets and no activity, and after two or three payments had been transferred through it and immediately paid out, it was wound up, closed and put into liquidation. A new account was then set up for the successor company. The money was then transferred to a firm called Euro-Arabian Jewellery, which also had its account at the High Holborn branch of Lloyds bank, and then straight to France—mostly to Kinz Joaillier, a firm with which Roberto Calvi, the man who was found hanging under the Blackfriars bridge, was associated. Whether he was inspecting the bridge in an unusual fashion or his death was a mafia-type murder, we have not yet authenticated. It did not seem to be suicide.
  All those events are typical symptoms of the process of money laundering. In the Institute of Chartered Accountants' advice to accountants, "Spotting Moneylaundering", it says that typical symptoms of money laundering are:
  "The forming of companies or trusts with no apparent commercial or other purpose"—
  which is exactly what was going on—and
  "The use of financial, legal or other advisers"
  —Jackson and Co. and Grant Thornton—
  "to provide their names as directors or trustees, with little or no commercial involvement.
  Unusual transactions with companies registered overseas"
  —Kinz Joaillier in France. All those activities are classic symptoms of money laundering, yet nobody claims to have known what was going on. When it was suggested that the institute should inquire into the matters, it began to argue that it had no idea whether money laundering was in process.
  The fraud, if it was a fraud, was discovered by AGIP in January 1985. It sued—interestingly enough not for all the money, which was almost certainly much more than $10 million, but for the last sum transferred, which was about $500,000 and 92 cents, which was an interesting rounding up.
  The case was heard at the Chancery Division of the High Court, where the judge, Mr. Justice Millett, was scathing in his judgment about the accountancy firms involved in the transfer. He said:
  "Mr. Jackson and Mr. Griffin"—
  the Isle of Man accountants—
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  "are professional men. They obviously knew they were laundering money … It must have been obvious to them that their clients could not afford their activities to see the light of day.
  Jackson and Co. were introduced to the High Holborn branch of Lloyds Bank PLC in March 1983 by a Mr Humphrey, a partner in the well known firm of Thornton Baker now part of Grant Thornton. They probably took over an established arrangement. Thenceforth they provided the payee companies …
  In each case Mr. Jackson and Mr. Griffin were the directors and the authorised signatories on the company's account at Lloyds Bank. In the case of the first few companies Mr. Humphrey"—
  a partner in Grant Thornton—
  "was also a director and authorised signatory."
  In other words, it was money laundering. The people had been caught bang to rights, and a very strong judgment indicated that accountants had been complicit in the process.
  I therefore took up the matter and referred the case to the regulators, who are supposed to ensure that the profession functions according to honest standards of high integrity and that such derelictions do not occur.
  In January 1991 and February 1991, I referred the matter to the then Parliamentary Under-Secretary of State for Corporate Affairs. He did not seem to be particularly interested in the matter, but he replied that he had no powers to deal with it and that it was a matter for the police and for the recognised supervisory body, the Institute of Chartered Accountants in England and Wales.
  The matter began to get more serious and more melodramatic at this point. The story is almost like a thriller in many respects—although it may not be very thrilling at the moment. In June 1991, after I had referred the matter to what I considered to be the appropriate regulators in this country, Yves Coulon—the French middleman and lawyer at the French end of the operation—was due to give evidence on the matter to a tribunal in Paris. He was interviewed by an Accountancy Age journalist, Stuart Mansell, and agreed that he should put the story on the record—that he should spill the beans. However, he warned:
  "A former Conservative cabinet minister still very prominent in politics was available to provide protection … A major organisation involved in the affair had the powers of a government. They've got an important politician in England who is looking after their interests. They and he will make sure things do not get out."
  Yves Colon added that he feared a fate similar to that of Mr. Calvi, at the hands of the same people. I do not know who "the same people" are. The P2 Masonic lodge was reported to have been involved in the Calvi affair, but I do not know whether it was a reference to P2. The point is that, on the day after giving that information to the journalist and promising that he would very shortly unveil the story and make it public and before he had appeared before the French tribunal, he was shot dead, with a single bullet through the head. No one has ever been charged with that murder. That is the melodramatic part of what, had it not been for a bullet through the head, I could have described as a heady brew.
  I went back to the regulatory trail to see what would happen and whether there would be an inquiry into the matter, because it cried out for an inquiry. I wrote, first, to the Chairman of the Select Committee on Trade and Industry. He did not reply. I wrote to the Prime Minister, mentioning the accusations against a former Cabinet Minister and urging investigation. He referred me to the police and to the Isle of Man authorities.

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  I went to the Serious Fraud Office, which said that its authority was limited to England and Wales—an area that appeared not to include Lloyd's bank in High Holborn, although I had always though that that was part of England and Wales. I went to the Isle of Man authorities, who told me, "We are not doing anything." I must say that the Isle of Man is a wonderful place to do just that—nothing.
  I wrote to the Institute of Chartered Accountants in England and Wales, offering them the 20,000 pages of evidence on the affair which had been made available by Jackson and Co. in the Isle of Man. Jackson and Co. was anxious to volunteer that evidence and anxious that the case should be fully investigated. It offered that evidence to me, to the institute and to the regulators, but no one took up the offer.
  The institute fell silent, saying that it could not comment on an investigation then in progress. I did not find out exactly what progress there was until March 1994, when I again wrote to the Serious Fraud Office about why nothing had been done about the case. The Serious Fraud Office—not the institute—told me that the institute had decided not to pursue the matter any further.
  I wrote then to the Parliamentary Under-Secretary of State for Corporate Affairs, in the Department for Trade and Industry, saying that that really was not good enough. He replied that his officials were still discussing the matter with the institute. So discussions were taking place after the report had been finalised.
  Finally, in May 1994—in response to a further letter from me—the institute coughed. It said that it had inquired into the matter but could not do anything about it, even though all the symptoms of illegality—according to its own indicators for detecting money laundering—were present. The institute said that although the members must have known that their activity was illegal, the institute could not prove that they knew it was illegal. Therefore, unless the institute could prove that the accountants involved knew that the activity was illegal, it could not do anything about it.
  The judge had said that the activity was illegal and that the accountants involved must have known what was going on. But apparently the institute knew better than the court. No report was ever published or made available. There is no evidence that the institute interviewed Jackson in the Isle of Man, and there is certainly no evidence that it used or even examined the evidence that Jackson offered to it. So, effectively, it was not a proper inquiry but a hush-up.
  The extent to which the inquiry was a hush-up cannot be revealed because the institute will not reveal the report. This has been an incredible legislative runaround, but it is typical of the fuddle one encounters when one tries to bring to book a matter of malpractice by accountants. That is because the system of regulation for accountancy is totally inadequate.
  The mafia—I use the term jokingly, as a closed organisation—cannot regulate the mafia. The only way forward is to introduce independent regulation to intrude the public interest in these matters and to give the profession the backbone to restore its integrity—the integrity of what was once a profession but is now a big
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  business, with big firms competing to sell services in intense competition and, therefore, prepared to comply with the desires of the management of the firms to which they offer audit services. To keep business, they are prepared to do the bidding of chief executives and to gratify their desires—by creative accountancy or by the creation of dodgy companies through which money can be laundered.
  Tax schemes, dodgy companies and money laundering merge into one another on a downhill slope into illegality. As the Observer stated in an article of 31 March 1996:
  "If you want to launder large sums of money forget banks and deposit accounts. The best way to avoid detection is through your friendly solicitor or accountant."
  The article stated that of the 14,000 cases of money laundering reported to the National Criminal Intelligence Service since the introduction of the Criminal Justice Act 1993, only 50 were reported by accountants, compared with 13,700 from banks.
  This is the only case in which we have hard and fast evidence of what is involved in the process of money laundering for clearly fraudulent purposes. The evidence has been submitted to the regulators, although they have done nothing because they are apparently not interested in inquiring into or coming to grips with the case. Given the allegations that have been made, why is that the case?
  Having recounted the facts of the case, I tell the Minister that clearly there must be an effective—preferably independent—inquiry into the facts of the case. In particular, there should be an inquiry into the role of the big accountancy houses, like Coopers and Lybrand, the auditors for AGIP (Africa) in the Channel Islands, and Grant Thornton. Both of those firms must have known more than they let on, and certainly more than they have told to the regulators. Surely Coopers and Lybrand must have known about the transfer of money, for whatever purpose, by AGIP. Either the company did not detect that transfer, in which case it is a bad auditor, or it knew, in which case it was complicit. Grant Thornton charged fees for setting up companies through which money could be laundered.
  Those of us who have raised the case with the Government and the relevant authorities have been fobbed off, so there is every reason for an inquiry. The Government say that they want to stamp out the practice of money laundering and that they do not want London to be the sleaze money laundering capital of the western financial system. If they want to get to grips with that problem they must inquire into the one case that has broken the surface in that system. Why keep fobbing someone like me off with excuses and claims that nothing wrong has gone on when the court has judged that money laundering took place?
  Secondly, we must have a more effective system of regulation than the current structure of self-regulation by the professionals, which effectively means that the mafia is regulating the mafia, in the interests of the mafia. Public interest does not intrude. When professional interest, which means getting business for the big accountancy houses, conflicts with the public interest, it is always the professional interest that wins under the current system of regulation. We need to place a requirement on auditors to detect and report fraud—that should include the fraudulent process of money laundering.
  I hope that the Government accept that we need a more open accountancy profession. The big accountancy houses must be involved to some extent in certain practices—

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  why else have they set up companies and organisations in the Channel Islands? Those secretive organisations tell us nothing about their actions. The stakeholders, whose accounts are being audited, get no information, and do not have access to the working papers. These accountancy houses are intensely powerful, but secretive organisations.
  It is only by having an open profession, which is given backbone by independent regulation, that we will know what is going on. I ask for an inquiry into the case and a recognition by the Government that their structure of professional self-regulation has failed, will continue to fail and must be replaced.
  10.22 am
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Phillip Oppenheim): I thank the hon. Member for Great Grimsby (Mr. Mitchell) for raising the issue of AGIP. I view with some admiration the terrier-like tenacity with which he has pursued it in the past few years.
  As the hon. Gentleman has rightly pointed out, the plot is complex, with many twists and turns. It involves a murder and accusations that a Secretary of State has been involved with the mafia. In many respects, it resembles a Jacobean tragedy or perhaps the plot of a Grisham novel. That obviously suits the hon. Gentleman's mind bent.
  I should like to relate the beginnings of the conspiracy. The fraud apparently began in 1976, as the hon. Gentleman stated, when AGIP (Africa) was apparently defrauded of $17 million by one of its Tunisian employees. The plot took a particularly dramatic turn with the assassination in court of a French lawyer, who was allegedly acting as a middle man in the affair.
  As the hon. Gentleman correctly pointed out, there were even allegations that a former Secretary of State for Trade and Industry was involved in a "mafia-style protection racket". The Government face many accusations and many criticisms, but I am pleased to say that the accusation that we are involved in such protection rackets is, thankfully, uncommon and rare, and one that I hasten to deny.
  The hon. Gentleman is right to raise certain points that have important implications for the United Kingdom, bearing in mind that the laundering allegedly took place between a company based in the Channel Islands and Tunisia. It is important to consider the role of the lawyers and auditors based on the Channel Islands, and whether they facilitated, in an illegal manner, the laundering of the money.
  I should say to the hon. Gentleman that the involvement of a solicitor or a firm of accountants in setting up a company or the transfer of money abroad could be quite legitimate and would not necessarily imply that it was complicit in any illegal activities. It does not necessarily follow that, because a firm of accountants or solicitors was involved in such activities, it must have known, or should have known, about the illegal purpose, especially bearing in mind the fact that it was dealing with a large, reputable company—one of the largest oil companies in Europe, the owner of which is an Italian nationalised institution.
  It is important to the United Kingdom to note that the allegation that the professionals involved should or could have known about the illegal activities has been properly investigated twice. The Serious Fraud Office could not
  914
  find sufficient evidence of fraudulent or illegal activity. As the hon. Gentleman quite rightly pointed out, the Institute of Chartered Accountants in England and Wales also exhaustively investigated the audit firm and the allegations that it had facilitated the fraud. That lengthy investigation, which ran to 20,000 pages of evidence, concluded in 1994 that there was insufficient evidence to substantiate any investigation.
  The institute has quite rightly said that if the hon. Gentleman can provide further evidence to change its conclusion, it will be happy to reconsider the case. If the hon. Gentleman has substantial evidence which he could put forward either to the SFO and the institute, they would be happy to reconsider the case. It is important to stress that there have been two full inquiries about the role of the auditors in the Channel Islands and no evidence has been found of complicity or wrongdoing. That is not to say that we should be complacent about the case. Although the affair started in 1976 and is now ancient history in some respects, it is important to ensure that, in future, there is only a minor possibility of such a case occurring again.
  I should like to list the actions that we have taken in recent years to ensure that illegal money laundering does not take place. First, in terms of the scope of the UK money laundering legislation, the Criminal Justice Act 1993 introduced a number of new drug money laundering offences, which enabled the UK to implement fully the EC money laundering directive. The 1993 Act also extended a number of the previous drugs money laundering offences to the proceeds of other criminal activities. Under UK legislation, it is now an offence to acquire, possess or use the proceeds of crime in the knowledge that they are such proceeds.
  It is important to note that it is also an offence to assist another person to retain or control the proceeds of crime by concealment, removal from the jurisdiction, transfer to nominees or otherwise. It is an offence to conceal and disguise one's own or another's property which is, or which represents, the proceeds of crime; to convert or transfer that property, or to remove it from the jurisdiction; to disclose anything likely to prejudice an investigation into money laundering; and to fail to report to a constable a knowledge or suspicion, in the course of one's trade that another person is engaged in money laundering.
  It is therefore clear that the legislation has been significantly strengthened in the past few years. Failure to comply with the regulations constitutes an offence punishable by a maximum of two years' imprisonment or a fine, or both, irrespective of whether money laundering eventually took place. Those important changes have strengthened the legislation. They ensure that any offence of the type that might have happened in the AGIP (Africa) case in the 1970s will not be committed again.
  The effect of that comprehensive legislation is to place requirements on all UK citizens, but systematically on all UK financial sector institutions, including accountancy, audit firms and any firms carrying out investment business under the Financial Services Act 1986, to report all suspicious transactions to the police or Customs and Excise. The National Criminal Intelligence Service will then pass on those reports to the appropriate law enforcement agency for investigation.
  Two further legislative strands also add to the prevention of money laundering: first, the powers of Customs to seize at the border cash that represents the

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  proceeds of drug trafficking, or which is intended for use in drug trafficking; secondly, the powers now available to the courts to freeze the assets of suspected or convicted criminals which are the proceeds of crime, money laundering or other offences, and to confiscate them on conviction.
  I do not want to minimise the strength of the case outlined by the hon. Gentleman or his role in pursuing it. He is right to raise the issues involved. However, unless he can produce further substantiated evidence that the SFO or the Institute of Chartered Accountants in England and Wales can investigate, it does not strike me that there is any cause for a Government inquiry. I should like to emphasise the extent to which the Government have significantly enhanced the laws against money laundering in the past few years through the Criminal Justice Act 1993 and other measures.
  Sitting suspended, pursuant to Order [7 May], till One o'clock.

  Disabled People (Transport)
  On resuming—
  1 pm
  Mr. Hartley Booth: I am grateful for the opportunity to raise the subject of disablement and travel. I shall outline the problem in relation to three areas: the use of taxis and minicabs by people with guide dogs, the use of cars by disabled people, and the use of trains by disabled people.
  The problem of disablement affects one person in 10. Therefore, one person in 10 finds conventional public transport difficult or impossible. Approximately 6.2 million people are disabled in this country, and almost half face major difficulties in the use of public transport. This is a huge problem, as has been recognised by hon. Members in a number of debates, and in legislation last year.
  I have raised this matter again today because I have come across a number of issues that I hope the Minister for Railways and Roads will deal with. It is difficult to define the problems, but it is important to do so.
  Without transport, people who are disabled are effectively imprisoned; with transport, they have freedom. Without transport, people who are disabled suffer a loss of self-esteem; with transport, they can become active citizens. Without transport, people who are disabled often suffer from clinical depression and isolation; with transport, they demonstrably have better health. Without transport, people who are disabled are a cost to the public because services are sent to individual homes; with transport, they can visit doctors and others who help them.
  I owe thanks to a number of people: Scope, the Automobile Association, British Rail, Motability, Guide Dogs for the Blind and a number of constituents, including, Angus McKenzie, Godfrey Faulkner, and also Bill Buchanan. Guide Dogs for the Blind is 65 years old this year, and, rather than retiring, it is going from strength to strength. It has trained 17,600 dogs—it is currently training 800 dogs a year, and that number is rising. I remind hon. Members that it costs £25,500 to train a guide dog.
  One would think that guide dogs—which are valuable and essential for disabled people—would be allowed into taxis and minicabs. However, there is overwhelming evidence that minicab and taxi drivers often refuse to let blind or partially sighted people accompanied by dogs into their vehicles. That is a scandal, and it is nonsense. The dogs are trained to sit on the floor. Some taxi drivers fear that a few dog hairs will appear on their seats, which is erroneous.
  Mr. Faulkner has said that he has frequently had to wait for two and a half hours for a minicab because others have refused to come to him. Mr. McKenzie several times waited in the rain for 20 minutes for a taxi, and when it arrived, it left again because he had a dog. This is scandalous, and Parliament should rectify it.
  The people involved describe the hurt, the annoyance and the inconvenience of this situation. I hope that the Minister will say that the existing legislation will be brought into force to ensure that taxi drivers cannot refuse to take dogs—I refer to section 37 of the Disability Discrimination Act—and that minicabs will also be covered by the legislation.

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  It is not sufficient for the Minister to say that blind and sight-impaired people can phone for a taxi, which is an argument put by some people. It is not enough, because minicabs are half the price. In addition, taxi drivers often will not go to houses that do not have an account—how does one have an account if one is poor? The legislation must be extended to cover minicabs, and quickly. It will be a test of the good faith of the Government—I believe that they are well motivated and have good faith in this area. It will be a good test to see how they respond. I shall leave this to the Minister and refer to other forms of transport.
  I commend dial-a-ride, which is a brilliant scheme that is active in Finchley. I commend Motability, which has provided 500,000 people with cars. It was formed under a royal charter in 1977, and it is still going strong. It receives Government money—a few years ago, it received £3 million a year and it now receives approximately £5 million a year. AA ShopMobility provides wheelchairs, scooters, walking aids and aids in shops.
  The orange badge scheme—an excellent scheme—enables disabled people to park in places that they otherwise would not have access to. That scheme, introduced by Government legislation, is inadequate in London, because it does not cover Westminster, the City of London and Chelsea—it covers outer boroughs.
  Despite adjustments in medical arrangements for our hospitals, there is a great concentration of hospitals in central London. It is perfectly obvious that disabled people need to visit central London hospitals regularly. However, this is precisely where the orange badge scheme—which would allow them to park near the hospitals—does not apply.
  I call on the Minister to say that the orange badge scheme—or a similar scheme—will allow people to park outside these important hospitals. Many of my constituents have complained about, and have been horrified by, not being allowed to park near these hospitals. Indeed, one person was given a huge parking ticket and had no alternative but to borrow money to pay the fine.
  The Government have a proud record on trains. The adviser to the board of British Rail has said that we are second to none in Europe in the adaptation of trains. That view is confirmed by many others.
  Mr. Chirac is speaking in the other place at present. If he were physically disabled and had travelled from Gare du Nord to Waterloo, he would have discovered that, although there are facilities for the disabled at Waterloo, there are none at Gare du Nord. France and Belgium have copied our ideas for adapting train carriages to meet the needs of the disabled. The industry has earned some credit points in that area, and I give praise where it is due. Some 98 per cent. of our train network is equipped to carry people in wheelchairs. Disabled facilities at train stations, car parks and eateries are improving.
  Nevertheless, many of the 2,600 railway stations up and down the country—particularly those that are unmanned—remain inaccessible to disabled people in wheelchairs. I call on the Government—and upon my hon. Friend the Minister, who is responsible for railway policy—to deal with that problem.
  For instance, I ask that the Anglia Railway proposal to install an on-board ramp on local trains for use at all unmanned stations be extended nationally. Even with
  918
  privatisation, I know that there are ways in which the Department of Transport can disseminate information about best practice, and embarrass companies into making further improvements. Conservative Members will understand that it is in interests of those companies to gain a good reputation when they are competing in a free market.
  I call on the Government to examine the rail system and to use their best endeavours to ensure that trains—particularly those calling at unmanned stations—are accessible to disabled people. My constituent, Mr. Faulkner, has conducted a complete survey of London Underground stations, and has found that many are inaccessible to blind people. I had difficulty meeting someone at Westminster tube station his morning—although I appreciate that work is going on there at present.
  I commend the good work that has been done in this area, but I come to the House with a shopping list—as you might expect, Mr. Deputy Speaker. I have raised three important points: I ask that guide dogs and their disabled owners be allowed proper and immediate access to both taxis and minicabs; that disabled parking facilities be provided for those visiting hospitals in central London; and that there be improved access for blind people to unmanned British Rail and London Underground stations.
  1.11 pm
  The Minister for Railways and Roads (Mr. John Watts): I congratulate my hon. Friend the Member for Finchley (Mr. Booth) on again bringing this important issue before the House. As he acknowledged, in the past 10 to 15 years significant progress has been made towards improving the accessibility of our transport systems. The achievements of recent years in that field were due in large part to a process which began back in the early 1980s, with research to give us a basic understanding of the needs of elderly and disabled people as public transport users.
  We moved next to demonstration projects to evaluate improvements and to raise awareness of the possibilities before drawing up codes of practice and guidance for manufacturers and operators. Most recently, through the Disability Discrimination Act 1995, we have passed comprehensive anti-discrimination legislation which will, for the first time, provide a legal framework within which further improvements, leading to full accessibility of all public transport systems and infrastructure, may be required. Before I outline some of the developments in public transport services—which I know will be of interest to my hon. Friend and to the House—I shall respond to some of the specific points on my hon. Friend's shopping list.
  Taxis are of course a vital transport link, providing a 24-hour service all year round. We have required new models of the purpose-built taxi to be wheelchair-accessible for some time. We are also beginning to see the introduction of other vehicles that have been adapted to transport a passenger travelling in a wheelchair.
  Under the terms of the Disability Discrimination Act, we will introduce a requirement for all taxis to be able to carry disabled people, including those who use wheelchairs. We will set technical performance specifications which will allow a range of vehicle types to enter the market. That will allow operators and the licensing authorities to make a choice to suit their particular operating conditions.

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  Another particularly important measure that we will bring forward under the Act is a requirement that taxi drivers do not refuse to carry guide dogs or hearing dogs. That provision is not dependent upon the introduction of new vehicle standards, and we intend to consult on the relevant regulations this summer, with a view to bringing them into effect later this year.
  I appreciate that those provisions will not tackle the discrimination that my hon. Friend mentioned in relation to minicabs. We cannot tackle that problem until there is legislation requiring minicabs in London to be licensed. However, we have already made it clear that, when a suitable opportunity arises, we shall bring forward legislation regarding the licensing of minicabs. Discrimination against guide dog owners may be considered in that context.
  In the meantime, I endorse my hon. Friend's comments, and remind drivers and operators of both taxis and minicabs that guide dogs are highly trained animals and can be accommodated in current vehicles, whether purpose-built or saloon vehicles, without causing a nuisance. I know that many drivers are concerned that the dogs will leave the seats covered in hair. However, as my hon. Friend said, guide dogs are trained to sit not on car seats but in footwells. They are likely to be better behaved than some passengers that taxis and minicabs carry in the course of their usual business.
  Ensuring that disabled people have access to mainstream public transport is a major priority for us. That does not mean that the need for accessible specialised services, such as the dial-a-ride service mentioned by my hon. Friend, will diminish. No matter how accessible mainstream services become, some people will remain reliant on door-to-door services for some or all of their mobility.
  Those services also have the potential to link in to mainstream services—for example, by providing transport links to main interchanges. In short, their role will change over the coming years to provide a complementary service to accessible public transport rather than providing a substitute for accessible transport as has occurred in the past. None the less, they will continue to play a vital role.
  The private car is also important to disabled people's mobility. The Department's mobility advice and vehicle information service—MAVIS—and other independent assessment centres across the country provide advice and assessment on cars and driving to disabled people, both as drivers and as passengers.
  My hon. Friend mentioned the important issue of the provision of parking for those who rely on the private car for independent mobility. I note my hon. Friend's point about parking spaces for orange badge holders in central London. The Department has worked with the four authorities involved for several years. Some progress has been made, but I will ask officials to take the concerns raised by my hon. Friend in the debate to the working party's next meeting so that they may be considered.
  Turning to rail services, there is no doubt that the provision for disabled people has been greatly improved over recent years, thanks to the policy commitment of the British Railways Board and the hard work of its Advisory Committee on Disability. The Railways Act 1993
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  introduced a requirement for all train and station operators to have regard to the needs of disabled people. That duty is policed by the rail regulator. In advance of that legislation, all InterCity services are fully accessible, and all newer rolling stock on those services incorporates a wheelchair-accessible toilet. New rolling stock elsewhere on the system is also providing wheelchair access, and incorporates other features to make it easier to use for people with mobility difficulties. Again, those developments will provide a solid foundation on which to take forward the requirements under the Disability Discrimination Act.
  Access to railway stations is also important. It is no good people being able to get on to the rolling stock if they cannot reach the platform in the first place. In main line terminals in London and other major cities, again, we have a heritage of fine old buildings that were constructed in the days when access by disabled people was not considered an issue. Throughout the country, there are about 2,500 stations, in both urban and rural areas, where access from one side of the track to the other is possible only by means of a footbridge or an underpass.
  As with the vehicles themselves, we have for some years had full access to all main line and InterCity stations—and that includes not only wheelchair access but, again, a wide range of facilities and services for people with impaired vision, impaired hearing and other mobility problems—but access to many other stations throughout the network remains patchy.
  At some, it has been possible to install lifts to enable people to cross the track by means of the footbridge or underpass. At others, a road bridge provides a relatively easy and adjacent route between the two. Where neither of those is possible, the solution has generally been to encourage disabled people to use the next station where access is easier, but that is not always convenient.
  Under the terms of our new legislation, there will be a requirement for all stations to be made fully accessible, although that will involve a "test of reasonableness". Of course, full access would be expected to be built in where reconstruction or major refurbishment is taking place.
  One of the biggest problems in accessibility of main line rail transport is the gap between the platform and the train. Over many years, British Rail has used a portable ramp that is kept on station platforms and is simply wheeled to the door of the carriage in which the disabled person is travelling. Although that works relatively well, it depends on communication between the stations of departure and arrival, and the competence of the staff involved in both cases.
  Increasingly, we would expect a range of access options to be developed, including both lift and ramp systems on the train itself rather than on the station. With a growing number of unstaffed stations, solutions that are incorporated in the train are becoming more and more important. As my hon. Friend mentioned, in some parts of East Anglia, for example, a portable ramp that is carried on the train is being used successfully by the train operating staff, where no one is available on the station. Such solutions will become more widespread once the requirements of the Act come into force, but I am pleased that train operators are taking action of their own volition, before being required to do so by legislation.

  921
  New systems offer a unique opportunity to build in full access from the design stage. The new rapid transit systems, for example, which have in the past 15 years been built in some cities, including London, have all been designed and built with full access to wheelchair users and other disabled people.
  As with new vehicle systems, where it has been possible to build a completely new facility, the advantages of designing for everyone can be seen. My hon. Friend mentioned the London terminal for the channel tunnel at Waterloo as an example. From its earliest design stages, that was built with the advice and guidance of disabled people. The result is a station that is easy to use for people with a range of mobility difficulties, and, as a result, for all other passengers who may be travelling with heavy luggage or with small children, or who may be confused simply by an unfamiliar environment. Where we design in facilities that are convenient for disabled people, we bring benefits to all the travelling public. We should always bear that in mind.
  Older systems such as the London underground face problems similar to those of heavy rail systems. It may simply be uneconomic to achieve full accessibility, although significant improvement may be possible.
  The approach that London Underground has taken and that the Government support is, as I have described, that, wherever new stations are built or major refurbishment is undertaken, full accessibility will be incorporated, although it may be many years before the entire system can be fully accessible. Even when the provisions of the Disability Discrimination Act come into effect, it will be subject—in the case of infrastructure such as the London underground—to the "test of reasonableness".
  That means that there will be a financial limit on expenditure that the service provider is obliged to incur. The positive, but pragmatic, programme of improvement that London Underground has adopted over recent years is likely to be continued, so that there is a gradual rather than a dramatic pace of change.
  Although the major difficulty of achieving full wheelchair access will remain with us for years, there is no excuse for failure to improve the system for the large number of people who have impaired vision and other mobility difficulties. Great emphasis has been placed, through guidance and codes of practice, based on research, on issues such as the use of colour contrast, guidance paths, audible announcements and other relatively straightforward and relatively low-cost items.
  Information has a vital role to play in enabling disabled people to benefit from improved services. Good practice in that area is being established. For example, for some years London Underground has had a large print map of the underground system, and an audio cassette description of it.
  Ninety per cent. of new buses have at least some of the features recommended by the Department's statutory advisers, the Disabled Persons Transport Advisory Committee, in its recommended specification. That document sets out a series of simple, low-cost improvements, such as better handholds, improved lighting levels and bellpushes that can be reached from a sitting position. Those features, which greatly assist ambulant disabled people, will be the foundation for the regulations that we will introduce under the Disability Discrimination Act.
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  The regulations will also deal with wheelchair users' needs. In common with many other countries throughout Europe, we are part of the low-floor bus revolution. We already have several hundred low-floor, fully accessible buses in service, ahead of any legislative requirement. The advantages of low-floor technology for full-size single deck buses is well established. Again, the benefits to all passengers, not just those who are elderly or disabled, is well documented and self-evident. Low-floor double deck buses and minibuses will be in production soon.
  Under the Disability Discrimination Act, we will not be making it a requirement for operators to use low-floor technology. We are planning to introduce a technical performance specification that will provide a choice for operators, although guaranteeing full access for disabled passengers.
  Access to coaches presents particular challenges for the industry. Further research is being conducted to find a solution that is effective and that would not result in an unacceptable loss of seating.
  Access to the vehicles themselves is only part of the solution to creating a fully accessible transport chain. For accessibility to be compatible throughout the country, and to ensure that it does not vary from town to town or region to region, we have established national guidelines for the pedestrian environment, including the use of tactile surfaces.
  It is crucial for a person with impaired vision to know that, when he encounters a particular surface, wherever it might be, it will give him one clear message. The same philosophy has been adopted at transport terminals such as railway and bus stations. Here, too, clear guidance to operators, developed on the basis of research over a number of years, has meant that the same type of tactile surface, the same use of colour contrast and so on, can be found in facilities throughout the country.
  We still have a long way to go before we can say with confidence that we have created a fully accessible transport system within a barrier-free pedestrian environment. What we have done over the past 10 years is to build up the necessary knowledge on which to create that system and that environment. We now have to apply it universally and systematically. We know that we cannot do that overnight, but we believe that we can achieve it.
  The guidance and codes of practice and general raising of awareness on which we have concentrated over the past decade have provided a strong framework on which the new legislation can build. Most important, even though we are still quite a number of years away from achieving good levels of accessibility in some systems—such as the London underground—we can be sure that no more vehicles will be built or systems developed that, in their design, revert to the old practice of excluding, rather than including, disabled and elderly people.
  Although there is no reason for complacency about the degree of achievement that we have under our belts, significant progress has been made, and we have firm plans, including those provided by a new legislative framework, which will ensure that progress is built on and that we move towards the goal of public transport services that are accessible to all people. In meeting disabled people's needs, we will be serving all passengers' interests.

  Crofting Communities
  1.29 pm
  Mr. Calum Macdonald: I am very grateful for the opportunity to raise this topic, which is important not only to my constituency but to the whole of the highlands and islands. The Under-Secretary of State for Scotland, the hon. Member for Aberdeen, South (Mr. Robertson), will know that, when I originally asked for the debate, the issue of most worry to the crofting communities was Government proposals to change a couple of major schemes that are important to crofting.
  On Monday, in the Scottish Grand Committee, the Secretary of State for Scotland announced that he had decided not to go ahead with the proposed changes. The Government's change of heart has been widely welcomed throughout the crofting communities. I acknowledge the Secretary of State's decision, and pay tribute to the campaign of the Scottish Crofters Union, which proved so effective in changing the Government's mind.
  Happily, that does not mean that there is nothing to talk about today. I should like to use this half hour to discuss a couple of issues of equal concern to the crofting communities. One is a relatively long-standing concern: the general question of financial support of crofting communities. The other is a growing concern that ought to concern the Government as well: the enormous increase in the paperwork and form-filling with which crofters have to cope as a result of new Government schemes and regulations.
  Before addressing those topics, I should like to ask for clarification of the statement made on Monday in the Scottish Grand Committee, when the Secretary of State said that there would be no changes to either the housing scheme or the agricultural grants scheme. Will the Minister confirm that that means that there will be no changes whatever in the scope of the agricultural grants scheme, and that all the projects relevant to that scheme will continue to be relevant in future?
  I turn to the social and environmental benefits of crofting, and the need for them to be better recognised in the Government's policy. Total support for agriculture in Britain amounts to £2.75 billion—a staggering figure. The support that goes to crofting, however, is obviously only a fraction of that. Under the common agricultural policy, as is well known, 80 per cent. of support goes to the 20 per cent. of farmers with the biggest farms. Unfortunately, the MacSharry reforms have had very little impact on correcting that imbalance. Far too much support continues to go to huge agricultural businesses that provide very little benefit either for the environment or for the communities in which they are situated.
  There are 10,000 active crofters in the highlands today. The average croft is about five hectares. There is very little arable farming, obviously because of the nature of the land, and most crofters concentrate on livestock—predominantly sheep. A crofter's average flock is about 60 ewes. It is important to emphasise that that is not the minimum but the average, and is obviously very small. That is why the average amount received by each crofter in CAP support attached to livestock, which is the major proportion of the support that they receive, is about £1,500.
  It is useful to compare the 10,000 crofters in the highlands, who receive on average £1,500 each, with the 4,000 biggest farmers in England, each of whom receives
  924
  more than £50,000, and 13 of whom receive up to £500,000—some more than that—in Government subsidy. From that comparison, one realises that the image of featherbedded crofters is far removed from reality.
  Government support is essential to sustain crofting. By definition, crofting is small-scale and part-time, takes place on land that is very difficult to work—it has among the most extreme climatic conditions in Europe—and by itself produces very little income. Government support will continue to be essential to its survival.
  The benefits produced by crofting are enormous. The environment benefits greatly. It is no accident that the crofts in my constituency, for example, are the last refuge of the comcrake in Britain. The crofting counties in general are regarded as one of Europe's most important regions of environmental diversity.
  Just as important as the environmental benefits is the fact that crofting sustains rural communities in marginal areas as no single Government policy possibly could, or as any other agricultural support system has managed in any other part of the United Kingdom. Crofting has been absolutely essential to the stabilisation of the population in remote island areas—and, indeed, to the revival of and increase in the population in the highlands and islands as a whole. Crofting manages to sustain rural communities, because it gives families a working stake in the land.
  That case used to be difficult to make when the sole objective of Government agricultural policy was simply to produce the maximum amount of food. When production was the overriding goal, crofting was obviously regarded as pretty much marginal to it. Today, however, priorities are completely different. The concern is no longer about producing vast quantities of food but about producing high-quality, safe food. There are concerns about safeguarding and enhancing the environment, and about sustaining and nurturing viable rural communities. In all those aspects, crofting is clearly in line with the new social and environmental goals behind agricultural policy.
  Unfortunately, crofting is still stuck with the financial support policies of the past. There is precious little recognition in the CAP—even after the latest set of reforms—of the social and environmental goals to which rural policy should be directed and which the public clearly demand as a return for the taxpayers' money that goes into agricultural support. There have been some changes in policy, but not nearly enough. The overwhelming bulk of the £2.75 billion that will be spent on agriculture this year is still not properly connected to the wider social and environmental goals.
  It is important to remember that very few support schemes are specific to crofting. Most of the support for crofting is part of the general agricultural support schemes that apply throughout the United Kingdom and the European Union under the CAP. By far the most significant is the sheep payments, for which every sheep farmer in Europe is eligible. Some elements are targeted, but they are very small and not very well targeted.
  The less-favoured area supplement provides an addition to the basic sheep payment paid to sheep farmers throughout Europe, but, since 94 per cent. of Scotland is classified as a less-favoured area, the supplement is a broad-brush approach that does not take any account of the particular circumstances of the crofting environment.

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  There is, additionally, the hill livestock compensatory allowance, by which more than 90 per cent. of Scotland is covered. But that allowance is paid out on pretty much the same basis as the less-favoured area supplement, and again, no attention is paid to the specific difficulties faced by crofters.
  The only livestock payment specific to crofters is the small payment of 64p extra per sheep, and the highlands and islands additional payment, which is a similar payment for cattle in the highlands and islands. The difference that those payments make is very marginal. Moreover, the average flock owned by crofters is only 60 ewes. The average specific payment to crofters is therefore less than £40, which makes hardly any difference.
  What should the Government be doing? It is obvious that agricultural support needs to be better targeted, and an important way in which to accomplish that would be for the Government to respond to the frequent demands that they increase the highland and islands supplement to livestock payments.
  I should like to suggest to the Minister another, new way forward, which I hope that he will pass on to Lord Lindsay for consideration. The European Community has introduced two other designations in its common agricultural policy and rural policy: the mountain area designation, and the sparsely populated area designation. Those complement its long-standing category of less-favoured area.
  Mountain areas have been so designated in France, Spain, Portugal, Greece, Italy and across Europe, except in the British isles. As the highlands is one of the most remote, climatically hostile and famous mountain areas in Europe, that fact is bizarre. The Government should apply immediately to the European Commission to have the highlands designated as a mountain area, so that it can become eligible for the additional CAP supplements funded by the EC and available with such a designation.
  The situation is the same in relation to the new sparsely populated area designation, which was introduced with the accession of the Nordic countries to the European Union. Most of Finland and much of Sweden are now designated as sparsely populated areas. The highlands and islands—particularly if one removes Inverness—should be so designated. I ask the Minister to push the case for that with the EC.
  The need for better targeting in general goes to the heart of the CAP, which will be debated later today and tomorrow in the House. The Government could make an important start on that if they respond to those two suggestions.
  The other big problem facing crofters is the rising tide of paperwork and bureaucracy, which has increased enormously over the past five years and now threatens to overwhelm many crofters. I have been receiving an increasing number of complaints about that issue from crofters. The Government should also be concerned about it because, if the crofters are facing an increasing tide of paperwork, civil servants must be doing more work in Government offices, which means costs to the Government that they should be trying to reduce.
  I receive most complaints about the integrated administrative and control system forms that have to be filled in each year. That form is a full 18 pages long, and every crofter must fill it in to be eligible for any of the agricultural support schemes. It arrives at the crofter's door with a 37-page booklet explaining how to fill it in.
  926
  Farmers across the country have to fill in the IACS form, but most of those work full-time on their farms and are therefore prepared to take on the extra administrative burden, even if they are not particularly happy about it. However, the motivation for a crofter—who is a part-time farmer receiving very little income from his croft—is quite different. The growing amount of paperwork is extremely discouraging for a part-time farmer, and many crofters are now wondering whether it is worth their while.
  The IACS form is by far the biggest bureaucratic burden, but it is not the final one. Other forms have to be filled in to receive livestock subsidy for sheep or for cattle. Another form must be filled in if there are changes in reserve quota. New forms must now be filled in whenever sheep are moved between holdings that belong to different owners. That might be only a matter of wintering sheep. If a crofter moves a couple of dozen sheep from one holding to another, a form must be filled in.
  Other certificates must be completed for animals travelling more than 31 miles, which is not far when one thinks of distances in the highland and islands. Moreover, there will inevitably be more form-filling as the Government pursue solutions to the BSE crisis. An endless ocean of forms and paperwork is drowning crofters and removing the incentive and commitment that they have and must have to continue crofting.
  The fear is not only theoretical but has very real consequences, which is evident in the way in which environmentally sensitive areas have been designated in the Uists in my constituency. Every year the paperwork for qualifying for grant aid under the ESA schemes has become increasingly onerous. To be eligible, each crofter must first make his way through a 27-page booklet. He must then fill in an 11-page application form, and then produce a management plan for his croft that looks as far ahead as five years.
  Such a burden is simply absurd when dealing with crofts that are only five to 10 hectares and receive payments of only a few hundred pounds under such schemes. It also contrasts vividly with the situation in such places as Eigg and Knoydart, where someone can come in and buy out entire estates without even telling anyone who they are, far less having to fill in a five-year development plan or produce an environmental prospectus.
  Participation in the ESA scheme has collapsed from 280 crofters in the first year to only 30 this year because of the form-filling required. Paperwork is clearly strangling an excellent idea to provide payments for crofters to farm in ways that specifically benefit the environment.
  What has happened in the ESA scheme will happen throughout crofting areas if the tide of paperwork is not halted and reversed. That is why I asked the Scottish Office to include in the review of the administrative costs of operating the scheme in relation to crofting, which was announced on Monday, the administrative costs of all the other programmes for which crofters are eligible. As I said, that is also a problem for the Government if they want to cut bureaucracy and administration.
  I have made a couple of specific suggestions to the Minister. I do not expect him to give a detailed reply now. I should, indeed, hope that he will not give an off-the-cuff reply. I hope that he will take away the suggestions, discuss them with his colleagues and perhaps respond to me in writing, so that they can be pursued.
  1.48 pm
  The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): I congratulate the hon. Member for Western Isles (Mr. Macdonald) on securing the Adjournment debate. As he said, when he did so he was not to know that my right hon. Friend the Secretary of State intended to make a series of announcements about crofting at the sitting of the Scottish Grand Committee at Dundee on Monday. I hope that he accepts that it is therefore inevitable that my reply on behalf of the Government must cover much of the same ground as Monday's debate.
  As the hon. Gentleman said, both debates were stimulated by the concerns of crofting interests that our proposals for merging the long-standing crofting counties agricultural grants scheme—CCAGS—into the new proposed Scottish countryside premium scheme would work to the disadvantage of crofters. As my right hon. Friend made clear on Monday, that was certainly never our intention.
  Indeed, as my noble Friend Lord Lindsay, the Minister responsible for agriculture in Scotland, explained at the launch of the consultation paper in early March, our aim was to
  "provide the best of all the old with the best of the new"
  by proposing that crofters would be able to apply for assistance towards a wide range of capital works, plus a range of conservation management payments not available outside of designated environmentally sensitive areas. Nevertheless, we have listened carefully to what has been said, and I am pleased to note that the hon. Member for Western Isles accepts the reassurances that my right hon. Friend gave in Dundee.
  I remind hon. Members that my right hon. Friend has decided to continue to offer CCAGS separately from the new scheme which, as a result, will no longer provide assistance for crofters towards a range of capital items not available to other applicants. Instead, assistance for those items of work will continue to be provided through CCAGS, as at present. I can give the hon. Gentleman the reassurance he sought, that we are planning no changes to the scope of the scheme. Like all Government schemes, however, it will be under constant review.
  Eligible crofters will be able to take advantage of other aspects of the proposed countryside premium scheme. For example, they will be able to apply for the various environmental management payments, which will now be available on a much wider basis than hitherto. I know that crofting interests, particularly the Scottish Crofters Union, which has published various joint documents with the Royal Society for the Protection of Birds, have been pressing for that for some time.
  Fears had also been expressed that we were planning to make changes to the crofters' building grants and loans scheme—CBGLS—and, in particular, that we might discontinue loan assistance. We certainly discussed a proposal along those lines with crofting interests earlier this year, and it would have had the very substantial advantage that we could use the resources to increase the rates of grant assistance paid through the scheme. However, again, we listened to the concerns expressed, and we have decided not to progress that proposal further at the present time.
  I should also like to emphasise that we have no specific plans for a means test. Although there is no doubt that linking assistance to income in some way might help to
  928
  improve the targeting of the scheme, we are not persuaded, and at the present time the benefits would be outweighed by the extra administrative cost for the Department and the burden on the applicant.
  I can only repeat again that we are in no doubt that the schemes provide an important contribution to the support of crofting communities. For example, the best estimates we have suggest that some 75 per cent. of the 8,000 or so crofters working crofts, plus a further 1,500 occupiers of non-croft holdings in the crofting counties, have used the CCAGS in the past five years or so.
  Similarly, in relation to the crofter housing scheme, CBGLS, an evaluation we commissioned in 1993 from Pieda, a firm of economic consultants, estimated that more than 3,200 households received assistance in the 10 years between 1981 and 1991, and that it had played a significant role in retaining households in crofting.
  There has never been any question of discontinuing assistance for crofting agriculture or crofter housing. Our aim was simply to ensure that crofting communities and the taxpayer, who foots the bill at the end of the day, secure the best possible value for money for each £1 of public money spent. We therefore have a duty to consider possible changes that might lead to improvements, and I hope that the hon. Gentleman will respect that. He has come up with some ideas, and I assure him that they will be properly considered by Lord Lindsay, who will write to him about the specific matters he mentioned.
  The topic for today's debate, however, is Government support for crofting communities, and that goes well beyond the two specific schemes to which I have already referred. The reality is that the list of types and forms of support is extremely long. That is right and proper, because crofting communities are found in the remotest corners of Britain, and the natural resources available to those communities are often limited.
  However, it is not all a question of economic and social disadvantage. Crofting communities have many strengths including a strong sense of community, a distinctive culture—Gaelic in the Western Isles and Nordic in Orkney and Shetland—and an outstanding natural heritage. It is important that Government support for crofting helps to build upon those strengths.
  The Crofters Commission plays a key role in relation to crofting tenure, and the Government support it to the tune of approximately £1.5 million per year. Much of its work is very much out of the public eye, but it nevertheless provides the cornerstone for crofting.
  The Crofters Commission is to be congratulated on the way in which it has sought, in recent years, to use its powers positively to support crofting communities—for example, by seeking to tackle the problems of absenteeism, and by developing effective channels of communication with crofting areas.
  The commission has also co-operated closely with other agencies to develop new and innovative initiatives such as the croft entrant schemes and the recent crofting township development scheme. In co-operation with the Forestry Authority, it has also helped to promote crofter forestry—a development which I know is close to the heart of the hon. Gentleman, who successfully piloted through the House the Crofter Forestry (Scotland) Act 1991.
  It goes without saying that progress on those initiatives has been possible only with Government financial support. Beyond the work of the Crofters Commission and

  929
  the specific crofting schemes administered by the Department or the commission, there are many other forms of support.
  As my right hon. Friend, who has joined us, pointed out on Monday, all crofters with agricultural businesses are potentially eligible for the normal range of agricultural subsidies. For crofters, the most relevant are the various livestock subsidies for hill sheep and cattle—the hill livestock compensatory allowances, including the highlands and islands supplement, and the sheep and suckler cow premiums. Within the less-favoured areas in Scotland, those subsidies amounted to some £220 million in 1995, and crofters will have benefited from an important share of that money.
  Under the Government, crofters and crofting communities have also benefited from a wide range of area-specific development programmes designed to help to strengthen agriculture in some of our most fragile areas, and also to encourage the development of alternative sources of employment.
  Those programmes have included the integrated development programme for the Western Isles, which spent some £25 million between 1982 and 1987; the agriculture development programme for the Scottish islands, excluding the Western Isles, which spent just over £30 million between 1988 and 1993; the rural enterprise programme, with expenditure of almost £13 million; and, most recently, the objective 1 programme, which will result in public expenditure of about £500 million in the highlands and islands from 1994 to 1999.
  Expenditure under the objective 1 programme is intended to help develop all sectors of the highlands and islands economy, including some of particular importance to crofters, such as aquaculture, tourism and the service industry. Furthermore, the selection process for individual projects is designed to ensure that priority is given to those that will benefit the most remote and fragile parts of the highlands and islands—some of the areas where the crofting tradition is strongest.
  Crofting communities also benefit indirectly from a range of other programmes, extending from the substantial funding provided for Gaelic organisations,
  930
  Gaelic broadcasting and Gaelic education, to the subsidies provided for ferry services to the various islands of Scotland on which so many of our crofters live.
  Mrs. Margaret Ewing: The hon. Member for Western Isles (Mr. Macdonald) mentioned land ownership, and referred in particular to Eigg and Knoydart. What is the Government's view of those absentee landlords, who have treated people with contempt? One may talk about hill livestock compensatory allowances, but what happens when the cattle are sold from people's islands?
  Mr. Robertson: I am sure that the hon. Lady will agree that crofting is limited on Knoydart. Perhaps she is trying to take me down a road along which I would rather not go during a debate on crofting.
  I reiterate that the Government are fully committed to supporting crofting, and they stand on their record. The steady regeneration of the highlands and islands in the 1980s and 1990s has been one of the unsung success stories of the Government's policies, and it has been reflected in increased population and economic activity. That has helped to give increased confidence to crofting communities, which is manifest in recent developments such as the crofting trusts at Assynt, and at Borve and Annishadder on Skye.
  It would be quite wrong, however, simply to allow policies and programmes to fossilise. The Government are willing to introduce changes if and when they are required, and to explore new ways of providing support. But we are also willing to listen to what the crofters have to say. In relation to crofting, our commitment and our approach is amply demonstrated in my right hon Friend's initiative on crofting trusts.
  We want crofters to be increasingly responsible for shaping their own destinies, rather than have their affairs managed for them by others. Our aim is to give them the necessary support to achieve that.
  It being two minutes to Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
  Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions
  TRADE AND INDUSTRY

    British Energy (Privatisation)
    Mr. Eric Clarke: To ask the President of the Board of Trade if he will make a statement on progress towards the privatisation of British Energy. [28355]
    Mr. Foulkes: To ask the President of the Board of Trade if he will make a statement on progress towards the privatisation of British Energy. [28362]
    The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): Privatisation of British Energy remains on track for July.
    Mr. Clarke: Now that the Government have admitted that there is a £3.8 billion cost liability for the Magnox stations, which is causing a £1 billion shortfall in the sale of British Energy, is it not time that the privatisation was stopped because it is a raw deal for the taxpayer and a shady deal for shareholders?
    Mr. Lang: It is typical of the Labour party that, while it claims that it is no longer against privatisation, it has opposed, and continues to oppose, every privatisation. The Magnox stations are not being privatised and their liabilities will remain with the Government. The liabilities of the non-Magnox stations will pass with the assets into British Energy and will be privatised. That is an entirely proper and sensible procedure that will generate substantial funds for the benefit of the taxpayer.
    Mr. Foulkes: Is not the truth that the Secretary of State has no strategy for energy but is lurching from one decision to another? Will he admit that the sale of British Energy is likely to be postponed by a second inquiry by the Monopolies and Mergers Commission? Since, as my hon. Friend the Member for Midlothian (Mr. Clarke) said, it is a bad deal for the taxpayer and a bad risk for the shareholders, will he agree that the privatisation should not go ahead and call it off now?
    Mr. Lang: No, I have no intention of calling it off. As I said in response to the initial question, privatisation of British Energy remains on track for July. The nuclear industry has improved beyond measure in recent years. Nuclear Electric's output has increased by 39 per cent. and Scottish Nuclear's output by 38 per cent. Sizewell B has been constructed on budget and on time and will reach full load in July. The nuclear industry is doing well and will do even better in the private sector.
    Mr. Dover: Will my right hon. Friend the Secretary of State confirm that the biggest advantage of privatisation is that the risks and opposing investment priorities disappear? The private investor, or shareholder, will take the risk. We shall ensure that the nuclear industry goes forward rather than backward and ends up paying a lot of corporation tax into the Exchequer.
    Mr. Lang: My hon. Friend is right. Before the Government's various privatisations, the nationalised
    932
    industries were costing the country £50 million a week. They are now generating very much more than that in revenue to the Exchequer. Nuclear Energy, once it is privatised, will help to contribute to that by raising substantial proceeds for the taxpayer, and, by making its own investment decisions in future, it will become even more competitive and productive than was suggested by the figures that I gave earlier.
    Mrs. Beckett: Surely the Secretary of State and his colleagues should ensure that people who might buy shares in British Energy are properly warned of the scale of the risk that they are undertaking. The hon. Member for Chorley (Mr. Dover) talked about the risks and liabilities disappearing. They are not disappearing. If the Government stick to their word for once, they will be transferred to private shareholders. Will he confirm that, against liabilities stated by British Energy to be set at an undiscounted figure of £14.6 billion, the only special provision being made is a fund of £16 million a year? Is that not another example of the Government's incompetence and neglect—even of the interests of shareholders?
    Mr. Lang: I think that the hon. Lady is getting a little muddled. The liabilities pass with the assets to British Energy. On privatisation, British Energy will make an initial endowment to the segregated fund of £228 million and, thereafter, will make contributions, which will initially be at £16 million a year. That is the result of careful calculation of the appropriate figure necessary to meet on-going liabilities. It will enable British Energy, the nuclear industry, to be privatised. All the details will be set out appropriately in the prospectus. It is typical that the Opposition try to talk down such privatisations and try to undermine flotations, and are thus operating against the interests of the British taxpayer.

    Social Chapter
    Mr. David Atkinson: To ask the President of the Board of Trade what assessment he has made of the effect of adherence to the social chapter on the hotel and guesthouse sector. [28356]
    The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): Embracing the social chapter would seriously damage competitiveness and employment in all sectors of industry because it would allow the United Kingdom to be out-voted on measures imposing unnecessary burdens and costs on businesses.
    Mr. Atkinson: Is my hon. Friend aware of the representations that I have recently received from a major hotel chain in my constituency warning me that a national minimum wage would reduce jobs and training, encourage hotels to get out of tourism altogether in favour of residential redevelopment, and have an altogether devastating effect on the ability of Britain's tourism industry to compete successfully against cheap holidays abroad? Between now and the general election, will my hon. Friend and his colleagues warn against the dire consequences of the Labour and Liberal parties' national minimum wage on one of Britain's most successful industries—tourism?
    Mr. Taylor: The two greatest threats to the tourist industry and the hotel trade generally are the social

    933
    chapter and the minimum wage. They will get neither from the Conservatives; they will get both from the Opposition. The more that we tell people that, the better.
    Mr. Barnes: Why, after 17 years of Conservative Government, cannot we have some basic decent standards in the hotel industry? The Minister's answer is a disgrace. If the Government think that the policies coming from the European Union and the Opposition's minimum wage are incorrect, what is their answer to the problem?
    Mr. Taylor: The British tourist industry has some of the highest standards in the world, not least in London, and in the provinces too. The question is what would happen to that excellent tourist industry if Brussels interfered. That would be unnecessary and dangerous. It would upset the successful job-creating balance that we now have in the industry.

    Internet
    Mr. Batiste: To ask the President of the Board of Trade what steps he is taking to promote the use of the Internet in the United Kingdom. [28359]
    Mr. John M. Taylor: My Department is involved in a range of initiatives helping users to gain business benefit from electronic networking, including the Internet.
    Mr. Batiste: Can my hon. Friend confirm that it is important to British industry that school leavers should be familiar with the Internet? Can he further confirm that cable companies, such as Bell Cable Media in Leeds, already offer schools free connection to the Internet and, on top of that, a valuable package of services without charge? Does that not demonstrate the utter sham of the sweetheart deal between the Labour party and British Telecom, a deal that undermines competition and gives nothing to the British public?
    Mr. Taylor: I completely agree with my hon. Friend about the deceitful sham and I confirm both the points that he made about the excellent promoters of cable, particularly in his constituency. I also confirm that a number of companies are already offering schools free access to the Internet. We do not propose to reverse our consistent policy preventing BT from broadcasting over its existing national network. Yes, the cable companies are doing it free. That should be welcomed.
    Mr. Hoon: If the Minister is so keen to promote the use of the Internet, what steps does he propose to take to ensure that all Internet service providers enjoy access to the network on consistent terms and conditions? In particular, does he agree with Oftel's recent consultation document, "Promoting competition in services over telecommunication networks", which says that Internet's services should be reclassified as systems business?
    Mr. Taylor: The information society initiative, launched by my right hon. Friend the President of the Board of Trade, is illustrative of the Government's attitude to these fast-moving developments. The Government are not being interventionist—nor should we be—but we are helping
    934
    new and inexperienced users, such as small firms, and we have expressed our total approval of the developments in schools.
    Mr. Waller: What backing is the Department giving to the information society initiative, promoting the use of communications technology? What response have the Government received from industry?
    Mr. Taylor: Two pilot schemes are running in Manchester and in Harlow. The Government have committed £35 million in new funding, and we are encouraging smaller users in particular to see the great commercial advantages that are available to them and to their businesses from the Internet. A clear trend is emerging from the Internet. Its commercial application makes it buoyant, and the level of participation will continue to rise.

    World Trade Organisation
    Mrs. Lait: To ask the President of the Board of Trade if he will make a statement on the role and functions of the World Trade Organisation. [28360]
    The Minister for Trade (Mr. Anthony Nelson): The World Trade Organisation provides the legal and institutional foundation of the multilateral trading system, providing a framework of obligations governing trade between its members. It is a forum for further development of the multilateral trading system, and provides a mechanism for settling trade disputes.
    Mrs. Lait: If the country were not a member of the European Union, would we not have to negotiate the end of the worldwide beef ban at the World Trade Organisation? Would that not take a long time?
    Mr. Nelson: My hon. Friend is quite right. The disputes resolution procedure of the WTO is long and uncertain. The Government's efforts to resolve the BSE trade-related issues are directed to persuading our European partners to lift the ban and to have bilateral discussions with third parties to try to ensure that they lift their bans on imports. That must be the quickest and most effective way of resolving the crisis, for which there is no scientific justification. I am grateful to my hon. Friend for raising that point.
    Mr. Bell: We live in hope that the ban on our beef will be lifted before the WTO holds its first annual meeting in December. May I welcome the Minister for Trade back to the House from his various travels on behalf of our country? According to the gracious homily that appeared in The Times on Saturday, he spends one week a month here. We are grateful to have him at the Dispatch Box this week.
    In his eloquent speech this morning, President Chirac talked about a social model for Europe. Irrespective of the comments of the Minister for Competition and Consumer Affairs, would it not be appropriate to have a social model for the WTO? That was left out of the so-called Uruguay round of the GATT negotiations. Would it not be appropriate to have basic levels of employment rights throughout the trading world, regardless of the situation in each trading country?
    Mr. Nelson: I am grateful for the kind sentiments expressed by the hon. Gentleman, and for those that

    935
    appeared in The Times. It is rather nice to read something pleasant for once about a Conservative Minister in that newspaper.
    The hon. Gentleman is the shadow spokesman on trade and, presumably, aspires to becoming Trade Minister. Frankly, it is extraordinary for him to talk about importing into the new trade order a social chapter that would be so damaging to this country. Has he learnt nothing from the example that is on our doorstep? The Government's attitude to the issue was clearly spelt out by my right hon. Friend the President of the Board of Trade. Our priorities are to have a successful and liberalising meeting in Singapore, to embark on another trade round and to ensure that we move towards free trade by 2020. That is an agenda for business—the hon. Gentleman's agenda would destroy business in this country and abroad.
    Mr. Thomason: Will my hon. Friend confirm that, in considering their policies on the WTO and the impending conference in Singapore, the Government will take account of global environmental issues and treat them as part of the core policy matters?
    Mr. Nelson: Yes indeed. I know of the deep interest that my hon. Friend takes in this matter on the Select Committee; I was pleased to give him that assurance this morning at a meeting of that Committee, and I do so again now. Although the agenda for Singapore will be principally concerned with further trade liberalisation measures, the environmental subtext will also be extremely important.
    We see no incompatibility between measures that will provide for sustainable global development and measures that will further liberalise world trade. We believe that the two should go hand in hand, and we shall be in the vanguard of those forcefully arguing for that in Singapore.

    Gas Suppliers
    Mr. Jamieson: To ask the President of the Board of Trade what steps his Department is taking to monitor complaints from gas consumers about fraudulent attempts to switch customers from British Gas to other suppliers. [28361]
    Mr. Graham: To ask the President of the Board of Trade what steps he is taking to check the activities of private gas companies fraudulently mis-selling gas contracts to consumers. [28364]
    Mr. John M. Taylor: My Department is not aware of any cases where licensed gas suppliers have acted fraudulently in the domestic market. Any person with evidence of such activities should bring it before the proper authorities.
    Mr. Jamieson: Is the Minister aware that Devon trading standards officers have received 336 complaints about SWEBgas and its mis-selling of contracts to people in the south-west? Does he not realise that his reluctance to root out such practices demonstrates the Government's incompetence and neglect of consumer interests?
    Mr. Taylor: I reject that analysis. I find the Opposition's attitude profoundly depressing. Some 40,000 households in
    936
    the south-west are benefiting from competitive gas supplies at prices between 15 and 20 per cent. below those of British Gas, representing an annual saving of about £70 per household. When will the Opposition stop whingeing and start welcoming the tremendous benefits for customers that competition brings?
    Mr. Graham: Does the Minister realise that this is about not cheap gas but quality of service? As a former member of the Scottish Gas Consumers Council, I am astounded by the number of dissatisfied customers and people who have been conned by unscrupulous private gas companies. Ofgas is not acting on their behalf either. When will the Secretary of State do something to give consumers confidence in the industry and the protection that they deserve from this or any other Government?
    Mr. Taylor: Consumers are benefiting from reduced prices and greater choice. The consumer is protected in a wide range of ways. A great deal of information has been provided. Ofgas operates a helpline; then there is the Gas Consumers Council; and there are trading standards officers. Moreover, customers have the right to withdraw from contracts if they want to. Meanwhile, there are plentiful benefits in the form of choice and gain for the consumer.
    Sir Patrick Cormack: Is my hon. Friend entirely satisfied that the recent activities of the regulator are in the long-term interests of those who consume gas and those who work in the gas industry?
    Mr. Taylor: The recent activities to which the hon. Gentleman refers—[HON. MEMBERS: "Hon. Friend."] I apologise for misdescribing my hon. Friend. The regulator has to strike a balance of interest between provider and consumer. If British Gas feels hard done by following those recent decisions, it is open to the company to ask for the industry to be referred to the Monopolies and Mergers Commission—but it must be self-evident to everyone that falling prices are good for consumers.
    Mr. Neil Hamilton: Does my hon. Friend agree that the one thing consumers are not complaining about is the 23 per cent. fall in prices to domestic consumers since privatisation and the real terms 50 per cent. fall in prices to industrial consumers? Does not the nature of the questioning from the Opposition show that old Labour is alive and kicking, completely failing to understand the market economy and the benefits of competition? As a result of decisions taken in the Department when I held my hon. Friend's portfolio—decisions to free up the market in gas—will not the consumer in the years ahead enjoy even greater benefits than those experienced so far?
    Mr. Taylor: The consumer must be the beneficiary of those things. I understand that, if implemented, the new Ofgas price control proposals will bring further price cuts of 10 per cent. to consumers nationwide in 1997, and more reductions in later years.
    Mr. Harvey: What will be the effect on the prices gas customers pay in a competitive market if an interconnector with Europe is established? Continental Europe pays much higher prices for gas than we do.

    937
    Will that not give gas suppliers a new market, which, in terms of supply and demand, will result in much higher prices being paid in this country?
    Mr. Taylor: No. I condemn that as nonsensical. The more variety there is for the customer to choose from, the better. Let the consumer be king in these matters—provide the consumer with variety and let the consumer choose.
    Mr. Bill Walker: Is my hon. Friend aware that many Conservative Members welcome the fact that we have competition, because it is as a result of competition that we get competitive prices? Having said that, I remind my hon. Friend that some of us believe that Scottish Gas has done a very good job in Scotland. The fact that we welcome competition does not mean that we in any way devalue the work that Scottish Gas has already done.
    Mr. Taylor: My hon. Friend speaks very fairly of Scotland. He has the advantage over me in having a Scottish constituency, but all the evidence and anecdotal reports that I have received suggest that what my hon. Friend said is right, and that credit should be given where it is due.
    Mr. Nigel Griffiths: Is it not astonishing that a Minister has not read the critical report, published this morning, by the Office of Fair Trading on that matter? Why do Conservatives seem to know the price of everything and the value of nothing? Why are they not taking steps to tackle the fraudulent mis-selling of those new gas contracts by revoking the licences of SWEBgas and Calortex? Is it not the case that dogs bark, ducks quack and Conservative Ministers join the boards of privatised utilities?
    Mr. Taylor: The pilot scheme operating in the south-west is operating there because the Gas Consumers Council for the south-west argued that it was the appropriate area for the pilot to run in. In a pilot scheme, when there is no precedent and no previous experience to follow, it is likely that, on one hand, there will be zeal by salesmen, and on the other that there may be some confusion, but nearly 50,000 people have taken up that offer of choice, and they will benefit from lower prices. I do not want to deny them that.

    Inward Investment
    Mr. Waterson: To ask the President of the Board of Trade if he will make a statement on the current level of inward investment into (a) the United Kingdom, (b) France and (c) Germany. [28365]
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Phillip Oppenheim): The latest OECD figures available show that, in 1993, the UK attracted £130 billion by value of stock compared with approximately £80 billion for France and £41 billion for Germany.
    Mr. Waterson: I thank my hon. Friend for that answer. How does he explain the fact that this country seems to be attracting more inward investment than France and Germany put together? Is it merely a co-incidence, or is
    938
    it due to the fact that, in this country, we have a Government who are committed to enterprise and to reducing burdens on business, and who will have nothing to do with the pettifogging, bureaucratic interference in business that we can expect from Opposition Members, the home-grown socialists, or their socialist friends in Europe?
    Mr. Oppenheim: I thank my hon. Friend for that question. Because he was politically active in the 1970s, he will remember the 1970s fondly as the good old days of Labour's industrial strategy, when international companies fell over themselves to move production from Britain and a trade union leader said that he would not buy a Ford made in a British plant, but would only buy one from a German plant.
    Now, by contrast, Ford and General Motors are using Britain as a core export base; Toyota, Honda and Nissan are exporting; and even Rover, which used to make such world-beaters as the Austin Allegro and the Morris Marina under Labour Governments, is now exporting more than half its production.
    Mrs. Anne Campbell: Is it not true that the increase in inward investment in 1995 is largely due to takeovers of investment banks and privatised utilities? How is that bringing extra jobs to the UK?
    Mr. Oppenheim: I do not think the hon. Lady is right, but I shall be interested in any figures that she can produce. What is true is that the manufacturing performance of this country has been transformed.
    Manufacturing productivity, which is the key element in competitiveness, was stagnant and bottom of all the major industrial countries when the Labour party was in power, whereas manufacturing productivity growth has been top of the G7 countries under the present Government. I remind the hon. Lady that manufacturing output actually fell under the last Labour Government, whereas it has risen quite sharply under the present Government.
    Mr. Atkins: Does my hon. Friend accept that part of that inward investment will have come from Saudi Arabia? Does he agree that Saudi Arabia is an extremely important trading and investment partner, and that the constant criticism in the media about its importance to export, investment and other trade with this country can only be damaging and ought to be stopped?
    Mr. Oppenheim: I entirely agree. It always amazes me that Opposition Members are so quick to attack countries that are our good trading partners and allies, when it is clear that in many other countries that still have socialist regimes human rights abuses are far worse than they are in Saudi Arabia.
    Mr. Tony Banks: Will the Minister comment on the fact that one of the reasons given for the substantial investment by Taiwan in south Wales that has been announced—
    Mr. John D. Taylor: South Korea.
    Mr. Banks: I am told that the investment is coming from South Korea. One of the reasons given for that is

    939
    that the rates for skilled workers in South Korea are higher than those in south Wales. Is the Minister proud of the fact that the Conservative Government are building a coolie economy? If so, when can we expect to see little boys going up chimneys again?
    Mr. Oppenheim: That was one of the silliest questions that the hon. Gentleman has ever asked. He makes the simple error that all his hon. Friends make: they confuse low wages with low costs. If they were correct, everything would now be made in Bangladesh. What matters is wages relative to productivity. The real difference between Britain now and Britain in the 1970s is not that wages have fallen—they have risen by 50 per cent. in real terms since 1979—but that productivity has increased by 90 per cent. since the days of stagnant productivity under Labour. That is why British industry is successful again, and why foreign companies want to come and manufacture goods here.
    Mr. Ian Bruce: Has my hon. Friend observed that there has been something of a downturn in new inward investment in the United Kingdom? Might that be because of new Labour's threatened policy of windfall taxes on those who make high profits? Is it not clear that, while a Conservative Government have been ensuring that the utilities, for instance, have given money back to the consumer—which is what people want—the Labour party has got it completely wrong, and is already trying to scare off inward investment?
    Mr. Oppenheim: I agree. I thought it interesting that, at this morning's press conference on the youth guarantee, the great and dear leader did not mention his primary policy for youth, the minimum wage. Perhaps he needs a youth guarantee because of all the young people who will lose their jobs if Labour is ever given the chance to implement that policy.

    Manufacturing Output
    Mr. Chisholm: To ask the President of the Board of Trade what has been the change in the level of manufacturing output in the past three months. [28366]
    Mr. Oppenheim: Manufacturing output has grown by 0.5 per cent. during the past three months.
    Mr. Chisholm: Will the Minister confirm that manufacturing industry is now officially in recession following the second quarterly fall in output? Will he also confirm that manufacturing employment will continue to fall over the next few months, as stated in the leaked memorandum from the President of the Board of Trade to the Chief Secretary to the Treasury? How many more people will have to lose their jobs because of the Government's neglect of manufacturing industry?
    Mr. Oppenheim: The hon. Gentleman is wrong on both points. First, manufacturing industry is not in recession; in fact, it has expanded at a time when in most of the rest of Europe it has been stagnant, or has contracted. Secondly, manufacturing employment rose last year. We shall be able to take Labour's complaints about manufacturing industry seriously only when it first has the guts to admit to the disastrous legacy that it left
    940
    as a result of its industrial strategy in the 1970s, and secondly makes clear what its policies are. Even when it has a policy, such as the minimum wage, it has not the guts or the honesty to tell people at what level it will set that wage. However, we know that every one of its policies would cost manufacturers jobs and competitiveness, raise costs and lose exports.
    Mr. Forman: Does not asking a question about the level of manufacturing output over the past three months show a complete lack of proper perspective? If we consider the level over a sensible period, such as since 1980, we discover that manufacturing output has increased by about 30 per cent. Will my hon. Friend confirm that those are the figures on which the House should focus?
    Mr. Oppenheim: My hon. Friend is absolutely right. One of the most astonishing things about the attitude of Opposition Members is that they seem conveniently to forget that, when they were in power, our manufacturing performance was diabolical—manufacturing output fell and the balance of trade was moving rapidly into deficit. Under this Government, not only has manufacturing output risen sharply, but we have had the best record of any major industrial country in manufacturing productivity growth.
    Mr. Sheerman: The Minister knows that, in the bad old days of 1979, 2.5 million more people were working in manufacturing industry than are today. We made more, and sold more abroad than we imported—that is pretty good economics. If the Minister is going to put his head in the sand and ignore the fact that there is a manufacturing downturn that is serious for the country's future, we face a disaster in the autumn. When will the Government address reality?
    Mr. Oppenheim: The hon. Gentleman is right on one important point. Manufacturing jobs have been lost—not only in this country, but in every industrial country in the world. Indeed, as the hon. Gentleman well knows, a huge number of manufacturing jobs were lost under the last Labour Government. That is in the nature of modern economies—when productivity increases, more is made by fewer people. In a sense, that is the sign of a successful economy. The difference between the 1970s, and the 1980s and 1990s is that, in the 1970s, we were losing manufacturing jobs and manufacturing output whereas, since 1979, we have increased our output substantially and become more productive and competitive. That is the only way in which to create what we all, regardless of party, ultimately want: a competitive economy that will guarantee high-quality jobs for everyone.
    Mr. John Marshall: Does my hon. Friend agree that it is absurd, even by their standards, for Opposition Members to talk about manufacturing output when they would impose a national minimum wage, a social chapter and a single currency—all of which would lead to a reduction in manufacturing output?
    Mr. Oppenheim: My hon. Friend is right. Apart from that, Opposition Members are reticent about telling us the exact detail of their policies, and I can probably understand why. They are probably afraid that the hon.

    941
    Member for Hartlepool (Mr. Mandelson) will put the evil eye on them—just as he has done to his old buddy the shadow Chancellor. As my hon. Friend said, the Opposition policies of which we know—the minimum wage and raising taxes on business—would cost jobs, cut exports and cut our competitiveness.
    Mr. Ingram: Why does the Minister refuse to accept the truth, which has been stated by independent commentators, that our manufacturing industry is facing a Government-induced recession? Is it because the Minister shares the view of Geoffrey Dicks, an economist at NatWest Markets, who said of the recent downturn in manufacturing output that it is not worrying that manufacturing has become as small a part of the economy as it has? Is not that statement an accurate reflection of the Government's policy towards the manufacturing sector? The Government do not want it to work; they want to hurt it.
    Mr. Oppenheim: Perhaps the hon. Gentleman will tell the House why, if there is a so-called recession in manufacturing—which, in fact, does not exist—it is worse in Europe, where manufacturing output has fallen sharply, than in this country? The truth is that manufacturing industry in Britain has regained three quarters of the competitiveness against Germany that it lost in the late 1970s under the last Labour Government. When will Opposition Members admit the disastrous legacy of ruin that they left for manufacturing industry in 1979? I do not deny that there are problems in manufacturing industry—of course there are, we are still not as competitive as the best—but we have made up much of the ground that we lost in the 1960s and 1970s, primarily under Labour Governments.

    Exports
    Mr. Pawsey: To ask the President of the Board of Trade what is the current value of British exports; what it was in (a) 1979 and (b) 1989; what are the United Kingdom's principal markets; and what they were in (i) 1979 and (ii) 1989. [28367]
    Mr. Nelson: In 1995, the value of United Kingdom visible exports was £153 billion. United Kingdom visible exports were worth £40 billion in 1979 and £92 billion in 1989. In 1995, the United Kingdom's top four export markets were Germany, the United States of America, France and the Netherlands, the same countries as in 1979 and 1989.
    Mr. Pawsey: Does my hon. Friend agree that those figures underline the success of the Government's policy in promoting exports? Does he further agree that that success is based on a combination of low interest rates and low inflation, and that all that success would be placed at risk if we introduced the social chapter, a move that is urged by Opposition Members?
    Mr. Nelson: I agree with everything that my hon. Friend has said. This is a success story which I hope will be proclaimed in all parts of the House. It has not just happened against stiff international competition; it has happened because of distinctly Conservative Government policies—tough policies over a number of years—to
    942
    improve the competitiveness of British industry. Also exciting is their effect on a range of industries. Manufacturing, about which we have heard a great deal today, has been a major beneficiary. Manufactured exports are up by 11 per cent. over the past year. About 10 years ago, oil was our biggest export; now, electrical machinery is. That says something about the competitiveness and success of the United Kingdom's manufactured exports.
    Mrs. Ewing: In view of the significant contribution made by the Scotch whisky industry to exports, especially to the European Union, is any progress being made with harmonising tax regimes?
    Mr. Nelson: I hear what the hon. Lady says and I welcome the fact that she speaks up for the Scotch whisky industry. I also claim to be its champion worldwide. The other matter that the hon. Lady mentions is one for my right hon. and learned Friend the Chancellor of the Exchequer, and I shall ensure that her representation is drawn to his attention.
    Lady Olga Maitland: Will my hon. Friend confirm that our volume of manufactured exports since 1981 has vastly exceeded those of France and Germany? Does he agree that that is because we are not fettered by the social chapter and a minimum wage and are able to compete at a real and competitive rate?
    Mr. Nelson: Those are significant influences on our export performance. We are now exporting more per head than the United States or Japan, and much of that is due to the reduced cost base and the more competitive situation that obtains here. However, a good part of it is also due to the much lower, and sustained, plateaux of inflation and interest rates to which my hon. Friend—and my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey)referred. We must follow the tough policies that will make that endure. The major beneficiaries will be our exporting and employing industries.
    Mr. Madden: Will the Minister confirm that India remains a foremost export market for United Kingdom companies? Will he also confirm that, as a result of the recent elections there, there is grave concern about the political instability which clearly now exists and about the growing tension between India and Pakistan, not least over the issue of Kashmir? Will he press British Aerospace to cancel the deal for the sale of 23 Hawk 100 aircraft to India and the transfer of technology that would enable India to produce Hawk aircraft? Will he arrange for export credits and export guarantees to be withdrawn and press for this irresponsible deal to be cancelled immediately?
    Mr. Nelson: No, I will not. However, I join the hon. Gentleman in celebrating the fact that our exports to India and our trade with that country have increased exponentially. They are up by some 80 per cent. over the past three years. That is a tremendous tribute to the Indo-British partnership that our Prime Minister and the Prime Minister of India instigated. I hope that the result of the recent Indian elections will not in any way interrupt our excellent trading relations with India. If defence is part of that, I am very pleased, and I do not think that it will influence in any way the outcome or resolution of the

    943
    extremely unhappy situation in Kashmir about which the hon. Gentleman has spoken in the House on more than one occasion.

    Trade Promoters
    Mr. Jacques Arnold: To ask the President of the Board of Trade if he will make a statement on the work of the trade promoters in his Department. [28370]
    Mr. Nelson: The number of export promoters remains at around 100. This is a partnership between the Government and the private sector that helps us win in overseas markets. I pay tribute to the companies that have seconded high-calibre executives to the Department to boost our export efforts.
    Mr. Arnold: My hon. Friend will be aware of the opportunities opening up for British exporters in the growth markets of the world, particularly in Latin America. I am sure that he is aware of the great progress that is being made by the bigger British firms in particular. Is he aware that small and medium-sized firms have terrific opportunities in Latin American markets and that the export promoters to whom he has referred are a key element in making introductions and helping them into those markets?
    Mr. Nelson: The Government spend approximately £200 million a year on export promotion programmes of one kind or another, and a good part of that money is focused on small to medium-sized enterprises. The Government are keen to promote the export habit among small and medium-sized businesses, not just on our doorstep in Europe but in the new and exciting growth markets of south America. We are having difficulties in some areas, including south America, in recruiting export promoters. I am grateful to the 157 companies that have come forward and seconded export promoters, and I hope that there will be growth in the number of active export promoters in south America.
    Mrs. Roche: How can the Minister be so complacent when, this week, we have had the publication of the Grant Thornton survey, which shows that our European rivals export more than our small and medium-sized enterprises? Is it not about time that the Minister and the Government did something in this area and created a database of exporters so that we can catch up with some of our competitors who have already created such databases?
    Mr. Nelson: The hon. Lady must get up to date with the facts. Does she not know what the business links are doing? I would be happy to provide her with some information about the database that they are building to help small business, in particular, to access business and export opportunities worldwide. As far as reports are concerned, I would rather take notice of the report issued by the National Audit Office in April. Its key finding was that the services looked at in the sample market
    "helped to generate an extra £345 million of additional business"
    at a cost of £4.5 million and generated important intermediate benefits, such as business contacts and increasing export competence. Taxpayers' money is being
    944
    well spent in export promotion, not just for major companies but for small to medium-sized companies as well.
    Mr. Congdon: I welcome the important role of export trade promoters. Does my hon. Friend agree that their success is dependent on Britain's businesses producing goods and services at prices that people overseas are willing and able to pay? Does he also agree that the price of those products would inevitably increase if the additional burdens of the social chapter and the minimum wage were placed on businesses and that those price increases would put many of our companies out of the export market and ensure that people lost their jobs?
    Mr. Nelson: Yes, I agree. I believe that labour costs in Germany are almost double what they are in the United Kingdom. The cost and the infrastructure imposed on businesses by the social chapter would be enormous. Let us remember that we have had the lion's share of inward investment because of the new competitive scene that the Government and Conservative policies have created. The biggest danger to employment, exports and productivity in this country is any change of course promoted by the Labour party, and we will have no part in it.

    Steel Industry
    Mr. Barry Jones: To ask the President of the Board of Trade if he will make a statement on the steel industry. [28371]
    Mr. Lang: The United Kingdom's steel industry is highly competitive, ranking among the world's best. Productivity has increased five-fold since the 1970s and exports of steel products are worth more than £4 billion.
    Mr. Jones: Will the Minister accept an invitation to visit one of the world's finest steel finishing plants—Shotton steelworks in my constituency? Does he agree that the Governments of Spain, Italy and Belgium are bending the rules of the steel aid code to the detriment of steelworks such as Shotton, the Welsh finishing plants and the stripmills? Does he agree that the steelworkers of Britain have made huge sacrifices in the way of tens of thousands of redundancies over the past 10 years? Will he use his veto on the steel aid code, if necessary, to stop cheating on the continent?
    Mr. Lang: I welcome the Labour party's change in tone regarding Governments who use subsidies to support their steel industries. We shall certainly support the renewal of the steel state aid code on the basis that it is at least as tough as the present code.
    As to the hon. Gentleman's kind invitation to visit his constituency, I shall consult my diary. I believe that Shotton celebrates its centenary this year. Its finest years in the past century occurred during its time in the private sector. As a result of the investment of £20 million in 1990, last year, the mill passed its steel production target of £1 million per annum. It is now one of the world's premier sites for the production of coated steel. That is a tribute to the privatisation of British Steel.

    Free Trade
    Mr. MacShane: To ask the President of the Board of Trade what steps he is taking to strengthen the global regulation of free trade. [28373]
    Mr. Lang: The Government attach a high priority to developing the multilateral trading system based on the World Trade Organisation. The WTO ministerial meeting in Singapore in December should set in train a comprehensive work programme to carry forward the process of multilateral trade liberalisation, building on the achievements of the Uruguay round.
    Mr. MacShane: Does the Secretary of State agree that one of the biggest impediments to world free trade is the increasingly protectionist approach of the United States of America? Will he protest to Washington about, first, its ban on beef imports from the United Kingdom; secondly, the level of subsidy given to each American farmer which is twice the amount received by European farmers; thirdly, the outrageous embargo on Cuba, which is now threatening British firms; and, fourthly, the withdrawal of world telecommunications liberalisation from WTO discussions because it is not convenient for Motorola? Will he tell the protectionists in Washington to open up and support free trade?
    Mr. Lang: I again welcome the Labour party's change in tone: it is suddenly against protection and in favour of free trade. We have identified all the points raised by the hon. Gentleman and they will continue to feature in our discussions. I hope that he will welcome the great progress that was made during the Uruguay round under the general agreement on tariffs and trade and the substantial improvements that have occurred.
    As to the hon. Gentleman's last point about telecommunications, the negotiations have been postponed and we shall work hard to ensure that they are concluded in time for the arrangements to come into force as targeted originally.
    Mr. Dunn: Does my right hon. Friend agree that the Labour party's defence of free trade is as absurd as a whistling pig? Does he agree that the Conservative party is the only party that favours free trade? We oppose every form of regulation, whether from Europe or from elsewhere in the world.
    Mr. Lang: My hon. Friend is absolutely right. He may have noticed in the press the report of my speech in which I identified 2020 as the target for achieving global free trade. That will be attained through a series of steps, the first of which will occur in Singapore this year when the British Government will lay before the meeting an agenda that will move incrementally towards freer trade.

    Shipbuilding
    Mr. Davidson: To ask the President of the Board of Trade if he will make a statement on future prospects for the shipbuilding industry. [28374]
    The Minister for Small Business, Industry and Energy (Mr. Richard Page): I am pleased that United
    946
    Kingdom shipyards are continuing to improve their competitiveness and to win orders in the face of very difficult international market conditions. I thank the hon. Gentleman for being the only one to turn up and ask me a question.
    Mr. Davidson: I thank the Minister for that answer. However, having rushed all the way from Glasgow to hear it, I had hoped that it would be more satisfactory. What steps are the Government taking to ensure that the international competitors to our shipbuilding industry do not cheat by receiving unfair subsidies from their Governments? As the Minister knows, the shipbuilding industry has taken considerable steps to reform itself, but it is being undermined by unfair foreign competition.
    Mr. Page: I, too, want a level playing field. If there is any evidence that people are cutting corners and bending the rules, it should be presented to the Department of Trade and Industry where it will be followed up vigorously. It is intended that the shipbuilding intervention fund should be abolished—it should be signed on 15 July—which would mean no subsidies to any shipyards throughout the world, so we will have that level playing field.
    Mr. James Hill: Does my hon. Friend agree that not just shipbuilding, but ship repair, is of great importance to United Kingdom yards? Will he join me in congratulating the Cunard shipping line? For the first time, under the management of its new owners, it will, this year, have its total maintenance check—work that is worth £12 million—performed in the port of Southampton. Is not that good news for our ports?
    Mr. Page: My hon. Friend is right to remind the House that not only shipbuilding, but ship repair, count—as does the construction of sail, pleasure and sporting boats: it goes throughout the piece. It provides a great deal of work and employment throughout the country. I willingly echo his congratulations of Cunard. The United Kingdom has some excellent ship repair companies and I hope that more companies will take advantage of the facilities that are offered.

    Manufacturing Industry
    Mr. Nicholas Winterton: To ask the President of the Board of Trade if he will make a statement on trends in manufacturing industry. [28376]
    Mr. Lang: In the current recovery, output in manufacturing has risen by more than 8 per cent., exports have risen by a quarter to record levels, and investment in plant and machinery has risen by 16 per cent.
    Mr. Winterton: I thank my right hon. Friend for that reply, but, in the light of the sad and regrettable redundancies in the clothing and textile industry, which is an important part of the United Kingdom's manufacturing economy, has he received from the industry any estimate of the cost on its wage bill of the minimum wage? It advises me that as much as 30 per cent. could be put on its wage bill, which would make it uncompetitive internationally and could lead to many hundreds of redundancies in textile and clothing constituencies.

    947
    Will my right hon. Friend perhaps give me an update on progress in opening export markets since the conclusion of the Uruguay round, and in validation of the tariff reductions that have been claimed?
    Mr. Lang: I am naturally sorry to hear about the loss of jobs in my hon. Friend's constituency, but I am sure that he will welcome the fact that, since the beginning of 1994, overall employment in manufacturing industry has risen by about 50,000. He is right to identify the national minimum wage as a particular danger to the textile industry. A recent survey showed that, at a rate of some £4 per hour, 139,975 jobs would be lost in north-west England. That illustrates the vulnerability of employment that would derive from a national minimum wage, especially in the UK's regions.
    Mr. Pearson: Did the Secretary of State read in the Financial Times yesterday an article called "The ills of manufacturing", which quoted a study that said that, between 1973 and 1992, output grew by more than 50 per cent. in the United States of America and by more than by two thirds in Italy and Japan, but by only a miserly 1.3 per cent. in the UK? Is not the problem as much one of stagnant output in the past 20 years as poor productivity? What are the Government going to do about it?
    Mr. Lang: The hon. Gentleman did not hear the figures that I gave in answer to the main question. I said that, since the beginning of the recovery, output in manufacturing industry had risen by 8 per cent. If he contrasts that with what happened under the last Labour Government, when output fell by an average of 0.5 per cent. per annum, he will reflect on the considerable progress that has been made. Since 1979, manufacturing industry exports have risen by 90 per cent. and productivity has risen by 80 per cent. That is a measure of the turnround that is leading to record exports and to record inward investment.

    Single Market Compliance Unit
    Mr. Steen: To ask the President of the Board of Trade what are the staff numbers and the annual budget of the single market compliance unit. [28377]
    Mr. Oppenheim: The single market compliance unit was relaunched on 28 March as action single market. It now has three full-time, and three part-time, staff helping UK businesses tackle trade barriers and illegal state aids in other single market countries. Running costs allocated to the activity amount to about £100,000 for the current financial year and most of it is staff costs.
    Mr. Steen: Is not the only way in which we can be sure that all European countries enforce directives, rules and regulations equally either to have cross-border enforcement, with our officials going over the border to other European countries to enforce rules and regulations and other European countries sending their officials here to do the same, or to have a massive European plain-clothes police force of bureaucrats in Brussels enforcing rules and regulations centrally? Surely the man and the dog in my hon. Friend's Department will not solve the problem.
    Mr. Oppenheim: My hon. Friend's comments remind me of the joke about European hell and European heaven.
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    If I remember correctly, in European heaven the English are the police and the Germans are the car mechanics—there are various other characters, but I shall not go through all of them—and in European hell the Germans are the police and the English are the cooks. I do not think that it would be feasible for United Kingdom inspectors to go overseas to inspect other countries.
    However, we have the Commission. Although it does not always act as we want it to, it quite often does. Secondly, we ultimately have the right to appeal to the European Court. Indeed, we have taken the case of Air France to the European Court. We are also monitoring the conditions that the Commission has placed on Iberia subsidies. I do not think that we shall ever have such a thing as a perfect single market, but the European Community single market, which this country worked so hard to create, is significantly better than what we would have had otherwise. It is not perfect, but it addresses many of the problems.
    Mr. Flynn: How can we use the single market compliance unit when we count all the jobs that come here from abroad but do not keep any record of the jobs that are syphoned out of Britain to European countries? Why did the highly successful, super-technology British company Inmos move from my constituency and relocate in a European country that has both the social chapter and the minimum wage?
    Mr. Oppenheim: Largely because it was bought by a state-owned Italian-French company. If the hon. Gentleman is—[Interruption.] Will the hon. Gentleman contain his excitement for a moment? If he is arguing for nationalisation and state subsidies, he will find himself in opposition to Conservative Members and—apparently—to most of his hon. Friends, most of whom have, during this Question Time, criticised subsidies and said how successful the unsubsidised British steel and British shipbuilding industries have been in the private sector. I suggest that he has a word with some of his colleagues.

    Gas Suppliers
    Ms Church: To ask the President of the Board of Trade what discussions his Department has had with gas companies about the methods they have used to persuade consumers to switch their custom from British Gas. [28379]
    Mr. John M. Taylor: Marketing approaches are a matter for gas companies, subject to the provisions of their licences and normal contract and consumer law. The Office of Gas Supply has produced a range of leaflets for consumers, including one that explains cancellation rights under general law in relation to doorstep sales. Further cancellation rights are provided under the standard licence conditions for gas suppliers.
    Ms Church: I thank the Minister for his answer and for the answers that he gave to my hon. Friends the Members for Plymouth, Devonport (Mr. Jamieson) and for Renfrew, West and Inverclyde (Mr. Graham). Will he give an undertaking that, where there have been proven instances of mis-selling of gas by gas companies which have not been fit and proper, compensation will be made available to the consumers who have suffered?
    Mr. Taylor: The correct approach for anybody who feels that there has been irregular negotiation of new contracts with alternative suppliers is to report the matter to the local trading standards officer or the Gas Consumers Council, where advice will be readily and sympathetically available.

    Underground Mines
    Mr. Skinner: To ask the President of the Board of Trade when he last met trade unions leaders from the mining industry to discuss the operation of underground mines. [28380]
    Mr. Page: My ministerial colleagues and I meet representatives of the coal mining industry as necessary.
    Mr. Skinner: Is the Minister aware that, in the first year since the massive pit closure programme in the early 1990s and the subsequent privatisation, the rate of notifiable accidents has risen by 50 per cent. and the rate of serious accidents—falls of roofs and so on—has increased by 80 per cent. in about 20 coal mines? At the same time, Richard Budge's salary has risen by 60 per cent. to £661,000, and his profits have gone up by £173 million. Does the Minister agree that that is blood money and the sooner that the pits are taken back into public ownership without compensation, the better?
    Mr. Page: I regret any accidents or fatalities in pits, and I find it disgusting that the hon. Gentleman has tried to make a political point with the deaths of miners. I draw to his attention the fact that, in 1985–86, 27 people suffered fatalities. The number dropped to 15 in the next year, and to nine in the year after that. Fatalities then went up to 18. The hon. Gentleman was not in the House shouting about blood money then, and he should be ashamed of himself for doing so today.

    Nuclear-related Materials Trade
    Mr. Dalyell: To ask the President of the Board of Trade if he will make a statement on trade between the United Kingdom and Belarus and Kazakhstan in nuclear—related materials. [28384]
    Mr. Oppenheim: All such goods of proliferation concern are controlled and require an export licence. In the past two years, the Department of Trade and Industry has issued only two licences for such goods to those destinations—for items to be used in oilfield exploration in Kazakhstan. In the same period, there have been no applications for import licences for nuclear-related goods that require such a licence.
    Mr. Dalyell: On 1 May, during the debate on the draft order, I asked Foreign Office Ministers about any help that we could give in the matter of the crumbling sarcophaguses—particularly those covering the Chernobyl radioactive areas. The Ministers said that they would consider the matter. What are the British Government doing to help with the very dangerous sarcophagus problem at Chernobyl?
    Mr. Oppenheim: With respect to the hon. Gentleman, I do not think that that question relates directly to the main question he asked. I shall certainly write to him and explain exactly what the Government are doing. If he wants to come to the Department to discuss the matter, I shall be happy to organise that.
    Madam Speaker: I now call Mr. Michael Brown to ask Question 45, which was incorrectly unstarred.

    Manufacturing Industry
    Mr. Michael Brown: To ask the President of the Board of Trade if he will make a statement about manufacturing industry in the Yorkshire and Humberside region. [28357]
    Mr. Page: Manufacturing industry in Yorkshire and Humberside is now more competitive and better adapted to the demands of a modern economy than ever before, and it is well placed to take advantage of the continuing recovery and increasing opportunities in overseas markets. I know from my regular visits to the region that many of its manufacturing companies are among the best in the world.
    Mr. Brown: My constituents will be delighted to have our own Question Time today—we should like to have one every day. May I tell my hon. Friend that that is excellent news? Does he agree that my constituency is in the vanguard of ensuring the statistics that he has just produced? Does he realise that, this week, we will have the opening of the new Grimsby fish docks, which will benefit Grimsby and my constituency? Is not that a tribute to how manufacturing industry in general has shown a renaissance in the old South Humberside area of Humberside? Will he take this opportunity to congratulate all those who are involved in manufacturing industry on the south bank of the river Humber?
    Mr. Page: As sponsor Minister for Yorkshire and Humberside, I congratulate my hon. Friend on creating his own Question Time—I believe that he deserves nothing else, and on an on-going basis. I know that he has worked extremely hard to bring about the Grimsby port project. I also know that the Government have offered quite a few million pounds of taxpayers' money to help bring it to fruition. The project is another example of how that area is blossoming—which is due purely and simply to the way in which the Government have been offering and operating regional support. The only thing that will harm that part of our country is if the Labour party allows the deadly duo of the social contract and the minimum wage to be let loose on it.
    Mr. Hardy: Does the Minister accept that the number of new jobs created in recent years does not begin to match the number that have been lost in our region? Does he accept that the antics and attitudes of a large section of the Conservative party seem likely to discourage and deter the inward investment that is so badly needed in our area?
    Mr. Page: While I hear what the hon. Gentleman says, I am afraid that his comments are not borne out by the facts. I can spend a considerable amount of time telling him that, in his constituency, Reflex Sound and Light Systems Ltd. has been given regional selective
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    assistance—as have Waterstone Glassware Ltd., Pyronix Ltd., Fear Free Doors, Aquion Ltd. and Morphy Richards Ltd. Those are jobs that have been brought into the region by regional selective assistance from the Government.

Forensic Explosives Laboratory
3.34 pm
Mr. Jack Straw(by private notice) asked the Secretary of State for the Home Department if he will make a statement on the problems arising from the use of contaminated equipment at the forensic explosives laboratory, Sevenoaks.
The Secretary of State for the Home Department (Mr. Michael Howard): As I explained yesterday in response to a question from my hon. Friend the Member for Beckenham (Mr. Merchant), on 14 March 1996 a small amount of the explosive RDX, one of the main components of Semtex, was detected in a part of a centrifuge at the forensic explosive laboratory. The laboratory is part of the Ministry of Defence's Defence Evaluation and Research Agency but provides scientific support to the police and Crown Prosecution Service in cases involving the criminal use of explosives.
One of the services that the laboratory provides involves the laboratory analysis of swab samples taken to determine the presence of explosives and the type involved. That "trace" analysis involves a range of procedures, including the use in many cases of a centrifuge.
The contamination involved not more that 30 micrograms, or 30 millionths of a gram, of RDX. It was detected in a part of a laboratory centrifuge that was probably already contaminated on its arrival at the forensic explosives laboratory in 1989. By normal standards, the amount of explosive detected was tiny; nevertheless, it should not have been there.
The contamination was discovered following one of the laboratory's weekly quality assurance exercises. As soon as it was discovered, work was stopped and the centrifuge taken out of operational action. The forensic explosives laboratory then instigated an immediate investigation into the source of the contamination and any implications there might be for casework samples.
As I told the House yesterday, all the information from that preliminary investigation was laid before the Government in a formal report. A copy of it was placed in the Library yesterday.
There is a small theoretical possibility that casework samples showing RDX traces may have been affected by the centrifuge contamination. Regular quality assurance tests are undertaken by the laboratory. In addition, every time the laboratory examines a casework sample it also tests a control. Neither of those checks at any stage indicated RDX traces at a level that would suggest that casework samples are likely to have been contaminated. However, further investigations are required to determine precisely how the incident occurred and what the implications are for the criminal cases involving RDX in which evidence was submitted by the forensic explosives laboratory.
That is why my right hon. Friend the Secretary of State for Defence and I agreed that an independent review should be established to look into those matters. As I explained to the House yesterday, the terms of reference of that review will be to report on the general likelihood of contamination being spread from the centrifuge to samples in the laboratory; to examine FEL papers on all
954
cases in which RDX traces were found and a criminal conviction resulted, and assess the likelihood of contamination; and to examine FEL procedures in the trace laboratory and make recommendations.
As the House knows, I have invited Professor Brian Caddy to undertake that review. Professor Caddy is Professor of Forensic Science at Strathclyde university and is a renowned expert in the field of trace explosives. He was involved in the appeal cases of the Birmingham Six on behalf of the appellants and advised the Maguire family for the May inquiry.
Professor Caddy will report to me in the first instance, but the results and recommendations of his review will be made public, and I will, of course, bring his findings to the House. In advance of that, as soon as a definitive list has been established, and agreed with Professor Caddy, the representatives of those whose cases involved an RDX trace and resulted in a conviction will be notified. As I said yesterday, on present information it is thought that about a dozen cases could be involved.
I will consider in the light of Professor Caddy's report whether particular cases should be referred to the Court of Appeal. If any case is referred to that court, it will then be for it to weigh the evidence and decide how to proceed.
From the information presently available to me, it would appear that the risk of contamination is small, but in a matter of this importance and sensitivity, I am determined to act only on the basis of the most rigorous and independent scientific assessment. As I have already said, I will keep the House fully informed of the outcome of Professor Caddy's review and the measures that flow from it. It would be wrong to leap to assumptions about any case until we have clear scientific evidence on which to base proper decisions. I hope that the House will recognise that in the regrettable circumstances of this incident, the Government have taken every proper measure to deal with the consequences.
Mr. Straw: Does the Secretary of State accept that what we now know about fundamental flaws in the forensic testing of explosives is bound to weaken public confidence in the criminal justice system and that we may end up with the worst of all worlds—innocent people in prison and the guilty walking free? Given the seriousness of the situation, does he not understand that if he had come to the House of his own accord yesterday he would have earned credit for his approach? Instead, through his tawdry attempt yesterday to bypass the House, he has made a serious situation worse.
Was it not treating the House with contempt that journalists were told by the Secretary of State's office on Monday that an important announcement was imminent and that they were briefed at 3.15 pm yesterday while Members of Parliament were kept in the dark until the last possible moment? Contrary to the impression that he has just given that the flaws emerged as a result of a routine weekly test, will he acknowledge what is spelt out in paragraph 3.1 of the report: that nothing would have come to light but for the pure chance of an accident in the laboratory in which, unusually, a glass centrifuge tube broke?
Is the Secretary of State not aware that serious anxieties about quality control in forensic laboratories have been expressed time and again and that on every occasion to date, Ministers have shown breathtaking complacency in

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resisting proper independent scrutiny of their work? Why have Ministers so long refused to act on the views of the Lords Select Committee on Science and Technology, which is chaired by Lord Dainton, and on the specific recommendations of the royal commission on criminal justice that there should be established a forensic science advisory council to report to the Home Secretary on the performance, achievement and efficiency of those laboratories?
In particular, why did the Secretary of State ignore the strident warning by Lord Chief Justice Taylor in 1994 that the establishment of such a council was "urgently needed" and "overdue" in view of the increasingly competitive environment in which the laboratories have to operate? Given what we now know, was not the Lord Advocate, in responding for the Home Secretary in the other place in February, wholly ill-advised to claim that there was "no necessity" for improving the regulation of the laboratories? What does he say now to the calls from Lord Dainton and the Lord Chief Justice? Is not the Royal Society of Chemistry right that the case for the establishment of such a body is unanswerable? Is not the Secretary of State directly and personally responsible for the failure to act on the recommendations made to him?
On the report that the Secretary of State published yesterday, is it not extraordinary that
"the history of this centrifuge"
is not known with certainty, that no one has so far been able to say from where it was purchased—second-handand— that no proper records were kept of its cleaning? Will he say how long Professor Caddy's inquiry is likely to take, whether he is satisfied that all possible cases where the tests could have been contaminated have been identified, and how many defendants may be involved? Will he also accept that the scope of the inquiry must be widened so that once Professor Caddy has completed the most urgent task of investigating the consequences of this contamination, a much more extensive review must be undertaken into the working practices of all forensic science and explosive laboratories?
Does not the way in which the Secretary of State has handled this grave matter expose a disastrous combination of arrogance and ineptitude, sadly all too typical of the Government, which will make it more difficult properly to restore public confidence in the criminal justice system?
Mr. Howard: As to the oral statement, the full facts and the action being taken were set out in my written answer yesterday to a parliamentary question, and the forensic explosives laboratory report on the instance was yesterday placed in the Library of House. Until we have Professor Caddy's report, I can give no further information and we move increasingly into the realms of speculation without the facts.
I have absolutely no intention of following the hon. Member for Blackburn (Mr. Straw) into the realm of speculation which was the basis of every question that he put to me. My concern is to give Parliament and the public the facts, not to second-guess the independent reviewer whom I have appointed. I have asked Professor Caddy to report as soon as he can consistent with a rigorous, thorough and comprehensive report.
I shall deal with one or two of the other matters raised by the hon. Gentleman. My understanding is that it is not true that the press were briefed yesterday before the answer was
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made available to the House. My understanding is that the briefing commenced at 3.30 pm. That is the best of my understanding. That is what I have been told in answer to the questions which I have raised.
But the one thing above all which emerges from this regrettable incident and the way in which it has been handled by the hon. Gentleman and his cronies on the Opposition Front Bench is that they will stop at nothing to try to make political capital out of any incident. It is a disgraceful approach to serious matters of this kind and it will do the hon. Gentleman and his reputation no good whatever.
Sir Ivan Lawrence: I congratulate my right hon. and learned Friend on the prompt and thorough action that he has taken in this serious matter. Will he confirm that, of the dozen or so cases concerned where Semtex formed an important part of the evidence, the majority of those cases had evidence other than Semtex to be seriously considered and, therefore, it becomes less likely that in those cases the persons concerned will be released?
Finally, is it not preposterous for the hon. Member for Blackburn (Mr. Straw) to suggest that had there been an independent forensic council it would have detected at Sevenoaks some contamination of a rubber bung at the bottom of a test tube upon which some of the equipment had rested? The whole thing is preposterous. The Opposition are trying to make a mountain out of a very small molehill and are discredited by the stupidity of their attempt.
Mr. Howard: I hope that my hon. and learned Friend will forgive me, but I do not propose to confirm the point that he put to me as to whether there was other evidence in the cases that we have so far identified as candidates for further investigation because I do not wish to engage in any speculation on any of those questions. I have asked Professor Caddy to look at them, but until we have his report the least said about any of the cases the better. I can confirm to my hon. and learned Friend that, so far as I can see at the moment, he is right in saying that the establishment of a forensic science advisory council would not have had the slightest bearing on this regrettable incident. But on that too, a final view must await Professor Caddy's report.
Mr. Alex Carlile: For how long was the Home Office aware of the information that was revealed yesterday before it was put in the public domain? Will the right hon. and learned Gentleman confirm that in the Forensic Science Service, equipment is tested and quality-assured in a way which enables the records of all the equipment that is used for forensic testing to be traced? Will he further confirm that in the Forensic Science Service, no analytical results are relied upon unless blank tests have been carried out first? When outside laboratories are used—as was the case here—why are the Forensic Science Service's high standards of checking apparently not used? Will he assure the House that, in future, the Forensic Science Service will be able to set the standards used by outside laboratories before analytical results from those laboratories are used in evidence?
Mr. Howard: Let me first deal with the sequence of events. The preliminary results were reported to the Home Office by the forensic explosives laboratory on 19 April

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in a draft report. The final report was formally submitted to the Home Office on 25 April. I was fully briefed on the matter on 26 April, although I had been given a general oral account of the discovery on 22 April. In conjunction with my right hon. and learned Friend the Secretary of State for Defence, I then considered what action should be taken. It obviously takes a little time to decide upon the form of inquiry that is appropriate, and to identify and approach the person who is best qualified to carry it out. When that process was complete, I brought the matter to the House. I simply do not see how I could possibly have acted more expeditiously. I believe that I accounted to Parliament at the earliest possible moment.
The hon. and learned Member for Montgomery (Mr. Carlile) referred to the Forensic Science Service, but was not gracious enough to apologise to the service for his intemperate attack on it on the "PM" programme yesterday. He either had not read the written answer before he went on that programme—it was available for a full hour and a half before he made the broadcast—or, having read it, he had not understood it. The hon. and learned Gentleman is wont to make wild accusations without the slightest evidence to support them in a way which brings himself and his party into increasing disrepute. He should apologise to the Forensic Science Service at the earliest possible moment.
Mr. Ray Whitney: Will my right hon. and learned Friend confirm that as soon as the laboratory discovered the contamination of the equipment, that equipment was taken out of service and an investigation was commenced immediately? Does he agree that the answers to questions such as that are important, and not the characteristically synthetic indignation of the Opposition?
Mr. Howard: I agree with my hon. Friend that that is an important point, and I can confirm exactly what he said. The piece of equipment was taken out of action as soon as the matter was discovered.
Mr. Tam Dalyell: May I ask the Home Secretary a question of which I gave his private office notice? Are there any implications for the Lockerbie situation? In particular, will Professor Brian Caddy—who some of us know to be a distinguished forensic scientist in Scotland—be specifically asked either by the Home Office or by the Crown Office to look at the crucial work of Dr. Hayes and Dr. Fereday, as that is central to the Lockerbie situation? Will he give that undertaking? He could easily say yes.
Mr. Howard: It would not be remotely appropriate for me to give any such undertaking. Professor Caddy, to whom the hon. Gentleman has just paid such fulsome tribute, is in an excellent position to decide what material he needs to look at, whose opinions he needs to consult and what investigations he needs to carry out. That is why I have appointed him to carry out the scrutiny.
Mr. Spencer Batiste: Having a forensic laboratory in my constituency and having visited it a number of times and seen the range and excellence of its work, may I ask my right hon. and learned Friend to dissociate himself from the Opposition's attacks on the forensic service? Will he also pay tribute to the dedication and commitment of the many people who work in it to underpin our justice system?
Mr. Howard: My hon. Friend is right. It would be quite wrong, as I have repeatedly said, to rush to any premature conclusions before we have the results of Professor Caddy's work. There is no evidence so far to indicate that any prosecution has been flawed by evidence contaminated in the way that has been the subject of such widespread speculation. But it is important that no stone be left unturned in the investigation, which is what I have asked Professor Caddy to do.
Mr. David Winnick: Is the Home Secretary aware that, quite apart from the individuals concerned, there is bound to be international concern about these cases? Time and again when trying to deal with terrorism, which causes so much suffering and destruction, it is unfortunately the British criminal justice system that seems to be on the defensive. That does this country great discredit abroad. All in all, has this not been a bad day for justice?
Mr. Howard: If any concern has been caused abroad, it is much more likely to have resulted from the hysterical attitude of the Opposition parties than from the fact that the Government have, in public and at the earliest possible moment, said that we have found something worthy of investigation and that we will have it thoroughly and independently investigated.
Mr. David Wilshire: Does my right hon. and learned Friend agree that a democratic criminal justice system, even if it has faults, is infinitely preferable to a terrorist system of summary executions in which all the victims are innocent and no victim has a chance of repeal or review before being murdered?
Mr. Howard: I entirely agree with my hon. Friend, who makes his point with characteristic vigour.
Mr. Kevin McNamara: I do not think that it is the Home Secretary 's role, or that of his right hon. Friend the Secretary of State for Defence, to examine test tubes in forensic laboratories—although that might be a suitable occupation for them after the general election. Nor do I have any criticism of the arrangements that the Government have made, apart from the fact that they failed to make a statement to the House. My hon. Friend the Member for Blackburn (Mr. Straw)—shortly to be my right hon. Friend—had to ask a private notice question to elicit the information.
What I am worried about is the role of Professor Caddy. The Home Secretary seemed to say that the onus would be on the professor to recommend cases for examination on the basis of his inquiries. Surely the right hon. and learned Gentleman's duty is to inform the legal representatives of anyone convicted, however remotely, by forensic evidence of the presence of Semtex. Thereafter the onus should be on the legal representatives to make representations and force the Home Secretary to take the cases to the Court of Appeal.
Mr. Howard: The hon. Gentleman is entirely right. We have already made it abundantly clear that we intend to do precisely that. Once it has been identified that there is some evidence that could have been contaminated in a particular case, the solicitors for the defendant concerned will be notified as soon as the information is available.

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Then the question of whether any such cases should be referred to the Court of Appeal will arise. In taking that decision I and—no doubt—the Criminal Cases Review Commission, once it is fully in operation, will place great significance on the work of Professor Caddy. I believe that we intend to approach the matter in precisely the way the hon. Gentleman suggests we should.
Mr. Jacques Arnold: Is it not a bizarre spectacle to see Opposition spokesmen leaping on 30 millionths of one gram of Semtex on the off-chance of hitting my right hon. and learned Friend over the head with it? Is it not irresponsible that that political action may put at risk the convictions of terrorist murderers?
Mr. Howard: There is no limit, as we have seen yet again today, to the irresponsibility of the Labour party, but it is something that we have become well used to.
Mr. Alan Simpson: Does the Home Secretary understand that it is extremely important to clarify which cases will be reviewed so that the speculation about the rights of appeal can be ended fairly quickly? In that context, does he recall that, on 31 August last year, I referred in some detail to him the case of my constituent John Kinsella, who was convicted of involvement in the Warrington bombings, despite the fact that he has never been owned by the IRA, his involvement has been denied by one of the self-confessed bombers and his conviction was based only on his handling of a holdall in which the bombers had concealed the Semtex? Will John Kinsella's case be one of those that has been referred for review?
Mr. Howard: I will not indicate the cases, because we do not yet have the information that we need to do so definitively. Of course I agree with the hon. Gentleman that it is important that the matter is clarified as soon as possible and that the cases are identified as soon as possible, and I hope that we shall be able to do so quickly. As for the case to which he referred, the material that he submitted to me in relation to that case is currently being studied.
Mr. Michael Fabricant (Mid-Staffordshire): Has my right hon. and learned Friend been told by his Home Office scientific advisers that any contaminant in a centrifuge is highly unlikely to get in contact with anything being tested in an encapsulated test tube? Does he not find it extraordinary that the person who purports to be the shadow Home Secretary finds people guilty first and innocent later?
Mr. Howard: My hon. Friend has extremely accurately characterised the findings of the preliminary report. That is exactly what that report says, but it goes on to say that it would be prudent and responsible to commission a further independent inquiry, and I have done precisely that. I entirely agree with the points made by my hon. Friend.
Ms Angela Eagle: In the light of cases such as those of the Guildford Four, the Birmingham Six and the Maguire Seven, surely the Home Secretary realises the sensitivity of these issues. When will he stop blaming the Opposition for the incompetence in his Department and take some responsibility for those areas that he purports to be in charge of?
Mr. Howard: What I blame the Opposition for is the hysteria with which they have approached this whole matter, the unnecessary alarm that they have caused by engendering and fuelling speculation about specific cases and the disgraceful way in which the hon. Member for Blackburn identified about a dozen realms of speculation in which he invited me to join him this afternoon.
Mr. Patrick Nicholls: The way in which my right hon. and learned Friend has dealt with this matter so far has been exemplary. [Laughter] Does it not amount to this—that Professor Caddy is an acknowledged expert in his field, he is carrying out on independent inquiry, and he will have full access to all the information and records? Unless Opposition Members are seriously suggesting that the Home Secretary should personally check every glass test tube in use in a process like this, there is nothing for which he should be reproached.
Mr. Howard: I am grateful to my hon. Friend and I agree with the points that he made. No suggestion made by the Opposition would surprise me. I should not be at all surprised if they did think that I should check every test tube personally.
Mr. Dennis Skinner: Has not it crossed the Minister's slippery mind that the public are getting more than a little weary of Governments blaming the Opposition for the Scott report, for BSE, and now for this, and throwing in a few scientists and blaming them at the same time? Should not he be big enough, now and again, to carry the can? He is the Minister; he is in government. He has been in court more often than anyone else in Britain. He is a recidivist, and it is time that he resigned.
Mr. Howard: As it happens, I am not the Minister who is ultimately responsible for the agency. I am answering this question because that agency, which is a Ministry of Defence agency, was carrying out work under contract for the Home Office, and I am interested in the implications for the cases where there just may have been some information affecting the verdict of the jury in those cases. I am concerned about that. That is why I have come to the House. That is why I, together with my right hon. Friend the Secretary of State for Defence, have commissioned this independent scrutiny. We have done exactly what we should have done in these circumstances.
Ms Jean Corston: Given that the Home Office knew about the contamination on 15 March—as the Minister has just told us—can the Home Secretary explain why the information has not been made public until now?
Mr. Howard: If the hon. Lady had listened to my answer to the question asked by the hon. and learned Member for Montgomery (Mr. Carlile), she would have realised that what she has just said is arrant nonsense. Moreover—if she had got the date right, which she did not—she would have heard a full answer to her own question.
Mr. Michael Stephen: My right hon. and learned Friend will know that samples of blood or urine taken from persons suspected of drunken driving are divided into two parts. One part is analysed on behalf of

961
the prosecution, while the other is given to the defence so that it can be subjected to independent analysis if the defence so wishes. Will my right hon. and learned Friend look into whether a similar procedure is used, or should be used, in the case of other criminal offences, especially those involving the handling of explosives?
Mr. Howard: My hon. Friend makes an interesting point. I shall see that it is drawn to the attention of Professor Caddy.
Mr. Max Madden: At least 12 convictions may be declared unsafe as a result of the Home Secretary's statement today. Will he ensure that he makes a statement to the House at the earliest opportunity—certainly before the summer recess—identifying the specific cases concerned? I hope that, if he can do nothing else, this sorry episode will provide conclusive evidence enabling him to make a decision about the remaining prisoners, who have now been waiting for seven months to be repatriated to prisons in the Irish Republic. I hope that he will make that decision today: it would provide some recompense for the extraordinary dilatoriness that he has shown so far in regard to this urgent matter.
Mr. Howard: I find it impossible to follow what passes for logic in the hon. Gentleman's question. There is absolutely no connection between one matter and another.

Points of Order
Mr. Brian H. Donohoe: On a point of order, Madam Speaker. I have given notice of my intention to raise with you a matter of major concern. I understand that you have copies of the offending material to which I shall refer.
At 4.40 pm yesterday I received a call from my local newspaper, the Irvine Times, asking me to comment on answers given to questions raised by me about the Irvine development corporation's housing transfer. I had been given only a holding answer, dated 13 May, which I supplied to you. The local paper, however, had been faxed full answers. You must understand, Madam Speaker, that this is a highly critical period. The housing stock is being transferred from the development corporation, and tenants are shortly to be balloted on whether they want their new landlord. Moreover, as the local paper's deadline was yesterday evening, I have no chance of putting my case to the local people.
I feel that you, Madam Speaker, must condemn what I would describe as disgraceful action on the part of the Under-Secretary of State for Scotland, and call him to the House to explain his conduct. After all, he has withheld information from the House and from me in particular.
Madam Speaker: The Minister is present to give an explanation, and I appreciate his presence.
The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): Further to that point of order, Madam Speaker. The information came to my attention less than two hours ago: that was the first that I had heard of it. I understand that information was released to the media without the authority of any Minister, and I have asked the permanent secretary at the Scottish Office for an urgent inquiry into how the administrative error occurred. I apologise to you, Madam Speaker, and to the hon. Member for Cunninghame, South (Mr. Donohoe). No discourtesy was intended, and I will get to the bottom of the matter.
Madam Speaker: This should not have happened. The hon. Gentleman has been given an apology and assured of a full explanation as soon as an inquiry has been carried out, which I appreciate.
Mr. Bernard Jenkin: On a point of order, Madam Speaker. You have often admonished hon. Members for visiting other hon. Members' constituencies without their consent. Could you take action against the hon. Member for Cunninghame, North (Mr. Wilson) who, this morning, visited my constituency for a futile, anti-Government media stunt, at the expense of me and my constituents, entirely without my consent?
Madam Speaker: I have no authority to take action against any hon. Member. I have merely made a plea, on numerous occasions across the Floor of the House, for hon. Members to give notification. The matter should be resolved between hon. Members; after the numerous statements that I have made on the matter, it should never come to the Chair of the House. It is a petty matter, although I understand that it is irritating to hon. Members

963
when other hon. Members appear in their constituencies without their knowledge. Hon. Members should give notification of such visits, if only as a matter of courtesy.
Mr. Dennis Skinner: Further to that point of order, Madam Speaker.
Madam Speaker: I have no further comments on that point of order.
Mr. Skinner: It is a different one.
Madam Speaker: In that case, I shall hear it, but it must be a different one.
Mr. Skinner: I read in the paper today that the Government have put up a poster in Vauxhall, in Lambeth—over the bridge—saying that although it has hurt, supposedly it is now working. That constituency does not belong to John Major or the Chancellor of the Exchequer or any of those on the Treasury Bench. I do not think that they ever tell the hon. Member for Vauxhall (Miss Hoey) what they are doing.
Madam Speaker: The hon. Gentleman is fully aware that that is not a point of order for me. I have not seen the poster, but I shall make a point of doing so during my walk tomorrow morning.

National Savings Pension
4.11 pm
Mr. Frank Field: I beg to move,
That leave be given to bring in a Bill to make provision in respect of national savings schemes to enable persons to have an income in retirement.
The long title explains the Bill's purpose, but it is customary for hon. Members to take a few minutes to explain the measure to the House.
This century, this country has made some major advances in extending pension coverage. There is a state retirement pension and, in addition, many employers have extended occupational pension coverage to their employees. But it was apparent, long before this Government's recent initiatives, that occupational pension coverage has stopped short at coverage of about 50 per cent. of the population. Despite the last Labour Government's attempts to gain universal coverage through the state earnings-related pension scheme, large numbers of people remained outside a second pension coverage. Even with this Government's personal pensions measures, a growing proportion of the working population is not covered by either the state retirement pension or a second pension. My modest Bill does not aim to tackle that major problem; I hope that, at some stage, the House will deal with it. The debate is between those who believe that we shall gain coverage on a voluntary principle and those of us who believe that we shall need an increasing element of compulsion.
The Bill makes a simple amendment to the National Savings Bank Act 1971 so that the Post Office can do two things. First, it can sell index-linked, inflation-proof bonds to those people who wish to save towards their retirement in that way. Secondly, the Post Office can, for those who wish, sell bonds that are linked to share issues and merely track the FT index. There will be two ways for individuals to save simply and cheaply.
When considering the cost of pension proposals, it is well worth looking at the cost of national savings generally, which charge, in administrative terms, only 0.5 per cent. of the cost of the savings themselves.
The Bill is a modest measure. It aims to help those on low incomes and on fluctuating incomes so that at their convenience they can make regular or irregular contributions towards their pension retirement savings. As I have said, the measure itself will not solve the problem of the growing number of people who do not have even state pension coverage, let alone occupational or personal pension coverage. However, it gives a resounding vote of support to the millions of our fellow citizens who wish to provide for themselves in retirement rather than rely on means-tested assistance. With that theme in mind I hope that the House will give me leave to introduce the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Frank Field, Mr. Stephen Day, Ms Angela Eagle, Mr. Clifford Forsythe, Miss Kate Hoey, Mr. Alan Howarth, Mrs. Jane Kennedy and Mr. David Shaw.

NATIONAL SAVINGS PENSION
Mr. Frank Field accordingly presented a Bill to make provision in respect of national savings schemes to enable persons to have an income in retirement: And the same was read the First time; and ordered to be read a Second time upon Friday 12 July and to be printed. [Bill 131.]

Common Agricultural Policy
[Relevant documents: The Fourteenth and Eighteenth Reports of the Select Committee on European Legislation, Session 1995–96 (House of Commons Paper No. 51-xiv and House of Commons Paper No. 51-xviii); European Community Document No. 5215/96, relating to agricultural prices for 1996–97; the unnumbered Explanatory Memorandum submitted by the Ministry of Agriculture, Fisheries and Food on 3rd May 1996 relating to supplementary premium payable to sheep producers in non-Less Favoured Areas of Ireland and the United Kingdom in respect of Northern Ireland; the report by the Ministry of Agriculture, Fisheries and Food, the Scottish Office Agriculture, Environment and Fisheries Department, the Northern Ireland Department for Agriculture and the Welsh Office on Agriculture in the United Kingdom 1995; European Community Documents Nos. 7015/95, relating to agrimonetary reform; 9061/95, relating to agrimonetary compensation; national aids; 9270/95, relating to controls in the wine sector 1992–94; 10479/95, the Court of Auditors' special report on the sheep and goat regime; 11896/95, the financial report of the European Agricultural Guidance and Guarantee Fund Guarantee Section for 1994; 12476/95, relating to agrimonetary compensation; and 4322/96, the Court of Auditors' special report on agricultural expenditure in Portugal 1988–93.]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Streeter.]
Mr. Harry Barnes: On a point of order, Madam Speaker. This morning in Standing Committee A, the eight documents that are now in front of us in relation to the debate were debated, and a motion was carried that will later be brought before the House. An amendment to that will be tabled, upon which we will be able to vote. Will we have the opportunity to vote on that at the end of today's debate, or will a vote be taken tomorrow at 10 o'clock? The minutes of this morning's Committee sitting will eventually be produced, but it would be helpful to have them available for hon. Members tomorrow when today's debate continues.
Madam Speaker: If the Government choose to put down a motion tomorrow, of course it can be disposed of and voted upon, but it is a matter for the Government.
Mr. Barnes: Further to that point of order, Madam Speaker.
Madam Speaker: Order. There can be nothing further to the point of order. If the Government move a motion tomorrow, the House can vote on it. It can be disposed of tomorrow—if it is moved.
4.16 pm
The Minister of Agriculture, Fisheries and Food (Mr. Douglas Hogg): In past years, the annual debate on agriculture has occupied one day and has focused on the year's price-fixing proposals. This year, because of the surrounding circumstances, the debate will last two days and will be more general. Moreover, on Monday there was a specific opportunity to discuss the cull cow slaughter scheme, and earlier today the details of this year's price-fixing proposals were considered in Standing

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Committee A. I cannot think of a previous occasion on which agricultural issues have been the subject of such extensive parliamentary scrutiny and concern.
In the course of a two-day debate, many subjects will be raised. My hon. Friends the Minister of State and the Parliamentary Secretaries will seek to respond to detailed points in their winding-up and other speeches. In opening, I wish to focus on three subjects: first, our approach to the common agricultural policy; secondly, our view of the price-fixing proposals; and, thirdly, the present state of the beef sector.
Before I develop these themes, I will put the present problems into their proper context. Until eight weeks ago, I was accustomed to saying that now is a particularly fortunate time to be the Minister of Agriculture, Fisheries and Food. That was true, and in most respects it remains true. Over the past four years, British agriculture has seen a 70 per cent. real increase in its prosperity. There are a number of reasons for that increase: currency movements and world commodity prices have played an important part, as have lower interest and inflation rates—both the direct and intended consequence of Government policy. As an industry, British farming is as competitive and prosperous as any in Europe, and it is our duty to help it remain so. One cannot refer to agriculture without speaking about the common agricultural policy.
Mr. Robert Hughes: Does the Minister agree that the agricultural industry encompasses people and trades other than those who are purely farmers? I refer to the dire circumstances as a result of bovine spongiform encephalopathy, and to the compensation that is being offered.
What does the Minister have to say to people such as John Troup in Aberdeen, who received a fax from the Scottish Office and was told to cease trading forthwith? He trades in ox heads. His business has gone, his employees are unemployed, and he has been told that no compensation will be made available. The Minister cannot speak about agriculture without recognising the different elements involved. When will he discuss compensation for these sorts of people?
Mr. Hogg: I have already said that I will address three matters, the last of which is the present state of the beef sector. If the hon. Gentleman will forgive me, I shall continue my speech, and address his comments at the appropriate time.
As I was saying, one cannot talk about British agriculture without referring to the common agricultural policy, which most hon. Members will agree is in grave need of reform. The CAP is expensive, it imposes restrictions on production, it is bureaucratic, it hinders the development of new markets, and it stands as an obstacle to the successful enlargement of the European Union. These are powerful arguments for change.
We want a market-driven agricultural policy that involves progressive reductions in price and production-related support and that does not involve quotas on production. In short, we wish to see an agricultural industry that is ready and able to produce what markets want at prices that they can afford.
Such a shift in policy requires gradual introduction, because farmers need time to adjust. Transitional financial assistance will be necessary. However, it is important that
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such payments should be degressive and decoupled from production. Such reform should also address more fully and directly environmental and rural objectives, some of which are clearly reflected in our countryside stewardship scheme.
Mr. Robert Key: Will my right hon. and learned Friend add another attribute for which we should be working in the reform of the common agricultural policy—that is, honesty? British farmers are the most honest farmers in Europe, but they have to deal in a market with farmers who are less scrupulous, and with a system that is apparently easy to manipulate and gives rise to a level of unacceptable fraud.
Mr. Hogg: My hon. Friend's comments are of great substance. We should move away from the present systems of support, partly because they give rise to the possibility of fraud. The more market-driven concepts that we envisage expose us to a lower risk of fraud than the present regime.
I have outlined the essential elements that I believe the common agricultural policy should contain. I do not pretend that the majority of Europe's Agriculture Ministers share that view. However, important external pressures will drive the European Union in the direction that I have sketched out. The most notable are the general agreement on tariffs and trade ceilings on subsidised exports, and the World Trade Organisation talks, due to start in only three years, which are bound to result in greater liberalisation of world trade and in further reductions in subsidy payments.
Moreover, the process of enlarging the European Union should present an opportunity for further reform. I do not believe that Europe could afford to apply an unreformed agricultural policy to new entrants, and I do not think that partial application of the existing agricultural policy would be sustainable. Those are uncomfortable facts for many member states, and they will be resisted. However, there is increasing recognition of the need for such change. I welcome the Commission's White Paper of last November. The British Government agree with most of the document's analysis, and we greatly welcome its conclusion that the status quo cannot be maintained.
Progress in securing change will be slow, and it will be attended by procrastination and compromise. However, I have sketched out realistic objectives that are right for both British farmers and the consumers and taxpayers of Europe.
Mr. Barry Sheerman: Why must the process be so slow? The Government have been in power for 17 years, and the common agricultural policy remains totally unacceptable to the taxpayers of this country, including many farmers. It is almost as unacceptable as the behaviour of the Secretary of State for Health, who destabilised and destroyed Britain's beef market by running into the Chamber and causing a crisis.
Mr. Hogg: That intervention shows how unfit the Labour party is for government. The Leader of the Opposition has said several times that the Labour party would not wish to stand alone in Europe.
Let us consider for a moment the practicalities of reforming the common agricultural policy. We must arrive at some agreement within the Council, which has

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15 voting members. We are arguing for change, but, as I have said, the majority is against us at present. If the hon. Member were to assert to the Council that his could never be the minority view, the majority would always be against us. That sort of thinking highlights why the Labour party is unfit for office.
Mr. Christopher Gill: Do not my right hon. and learned Friend's comments prove that any vote that is taken in the House tomorrow will be entirely symbolic? Whether the Government win or lose the vote, the common agricultural policy will continue in its present form until Ministers reform it.
Mr. Hogg: My point is that our objectives are realistic. We are making substantial progress, but it is slow—I do not deny that. For example, agreements were struck in 1992. My right hon. Friend the present Secretary of State for the Environment played an important part in securing a package of measures that advanced reform while taking account of British farmers' interests.
As I said, the Commission's White Paper published at the end of last year is an important step forward, in that it asserts the principle that the status quo in common agricultural policy terms is not sustainable. We need to build on that and to work with the grain of that argument. I hope that my hon. Friend will help to make that possible.
Mr. Denis MacShane: Does the Minister agree that progress in the direction that he has set forth would be better if it were not for the fact that half his party want us out of Europe?
Mr. Hogg: That is manifestly not true, but, if the hon. Gentleman were honest with himself, he would recognise that a large number of Labour Members regard his political views as positively eccentric. I am bound to say that I rather agree with them.
Mr. Tony Marlow: As my name and those of several of my colleagues have been taken in vain by the hon. Member for Rotherham (Mr. MacShane), may I make it clear that I do not know any Conservative Member who wants to come out of Europe; perhaps there are one or two. Many Conservative Members believe that we should have major renegotiations; that, I believe, is the Government's position as well. We are bored rigid with being misrepresented by people such as the hon. Member for Rotherham.
Mr. Hogg: I am glad that I gave my hon. Friend the opportunity to clarify his position so precisely.
Mr. Rhodri Morgan: Give him a job.
Mr. Hogg: That is not in my discretion.
I will turn from the general thoughts that I have tried to sketch out on the CAP to this year's price proposals, which were examined this morning in European Standing Committee A. In essence, the price proposals maintain the status quo. They disappoint, because we have, and yet have missed, an opportunity for change. With cereal prices at their present high levels, now would have been the time to start cutting the arable area payments, which massively over-compensate for the price reductions agreed in 1992.
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Moreover, the milk sector is another area in which we could have made changes. I pressed for a I per cent. increase in milk quotas, together with a 5 per cent. cut in support prices. I am sorry that those suggestions were not picked up. Some proposals, however, should most certainly be welcomed. In particular, there is the proposal for a single rate for rotational and non-rotational set-aside. That is a much-needed and wholly justified simplification of the rules.
The Council will need to take an early decision on next year's set-aside rate. I hope that that can be done at the July Council. As to the rate itself, with current high market prices, there are powerful arguments for a rate substantially below 10 per cent.
I turn to the beef sector. The "price proposals" will provide additional measures to support the beef sector in and through the present crisis. Some measures have already been taken, but the Council has, on two occasions, emphasised the need for additional short-term income support for beef producers. We and other member states look to the Commission to deliver further proposals at next week's Council meeting.
Mr. Edward Leigh: May I direct my right hon. and learned Friend to a point of interest for his constituents and for mine in Lincolnshire? At present, not a single beast is going into market from Lincolnshire because, east of the line from Northampton to York, no abattoirs are open for those beasts. There is chaos. We have been lobbied today by more than 100 or 200 farmers. They cannot get beasts into market. There are not enough abattoirs. What is my right hon. and learned Friend going to do about it?
Mr. Hogg: There is a serious problem with matching abattoirs to renderers. Rendering capacity in this country is finite, and we are having difficulties in processing or slaughtering more than 25,000 cattle a week throughout the United Kingdom. To meet that problem, we are proposing to take on cold storage facilities. In the next six weeks or so, I hope that we shall take on additional storage capacity for about 20,000 tonnes. At that point, it will be possible to bring more abattoirs on stream, and there will therefore be a bigger throughput than we can achieve at the moment.
Sir Patrick Cormack: May I point out to my right hon. and learned Friend that not only Lincolnshire farmers have been to the House today? Staffordshire farmers have been here as well, and they will not be comforted by the six-week period. I stress to my right hon. and learned Friend that it is absolutely essential that the six weeks becomes two as a maximum.
Mr. Hogg: My hon. Friend the Minister of State has reminded me that more abattoirs will come on stream on Monday week.
I invite my hon. Friends to stand back for a moment. We face a real problem because there is a constraint—the rendering capacity. One cannot wholly get round that problem by putting carcases into cold storage, because, in any event, between 30 and 40 per cent. of the carcases have to be rendered. That said, as we are able to bring more cold storage into play, we shall be able to increase substantially the weekly slaughter rate. I recognise the considerable concern expressed by hon. Members of all parties on that point.
Mr. Patrick Nicholls: Today, Devonshire farmers have been saying to Members of Parliament who represent Devon constituencies that cold storage is the key. They will expect to hear not six weeks but a great deal less than that. The relationship between the renderers and abattoirs is understood, but will my right hon. and learned Friend be able to do anything about the supermarkets that have been telling abattoirs, "If you take inedible food as well edible food, we will not take any supplies from you at all." That is specifically making it virtually impossible for the renderers to do their job.
Mr. Hogg: The points that my hon. Friend has made are important. We shall start the process of bringing cold storage on stream next Tuesday. I thought that it would be more helpful if I expressed the figure collectively, so that hon. Members got a feel for the number. That is why I said 20,000 tonnes at the end of six weeks. I hoped that it would be a helpful indication of the volume.
The point about abattoirs and supermarkets is serious. My hon. Friend the Minister of State has talked to the industry many, many times—indeed, on a daily basis—and at the moment, nobody has dropped out of the abattoir scheme for the reasons that my hon. Friend the Member for Teignbridge (Mr. Nicholls) has just given about the supermarkets.
Several hon. Members rose—
Mr. Hogg: I shall give way to my hon. Friend the Member for West Gloucestershire (Mr. Marland), then the hon. Member for North Cornwall (Mr. Tyler), and then I must make a little progress.
Mr. Paul Marland: As has already been said, a large delegation of farmers visited the House of Commons today, and several of my hon. Friends and I were at a well-attended meeting upstairs with them to discuss the situation. They brought up the considerable concern about the unexpectedly large drop in the price of clean beef. I understand that that is in no small measure due to imports from third countries. Will my right hon. and learned Friend undertake to consider the possibility of stopping imports from countries such as Botswana, which were allowed into this country only as a short-term measure to plug the gap created as a result of the scare?
Mr. Hogg: I should like to make two points. First, to return to a point that I made a few moments ago about income support for beef producers, I think that the Commission is likely to come forward at next week's meeting of the Council with proposals for additional income support that will address some of the points that concern my hon. Friend and his constituents.
Secondly, however, there is a broader point, which relates to third countries. Some weeks ago, we relaxed the prohibition on the importation into the United Kingdom of beef older than 30 months from some third countries in which there was no risk of BSE. We did that to meet the legitimate concern of UK food processors, who made it plain to me and to others that they would face grave economic difficulties if they were not able to obtain supplies of that type of meat from third world countries. That is why we did it, and I am not minded to go back on that decision.
Mr. Paul Tyler: Is it true that it is now exactly eight weeks since the Secretary of State for
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Health made his original statement in the House that precipitated this crisis? That is 56 days. Why was the problem of rendering capacity not anticipated at a much earlier stage? Why has the entire industry been held to ransom?
Why is the situation still deteriorating—since last week, when the Minister of State made his statement, and since Monday, when he assured us that 21 abattoirs were in action? Today, only 11 are operating. Can the Secretary of State give us a figure for the number of cattle that have been processed through the scheme as of now?
Mr. Hogg: The hon. Gentleman reminds the House that it is but eight weeks since my right hon. Friend the Secretary of State for Health and I made our statements. It seems like eight years from my point of view and that of the industry, but no matter for that.
There has not been a deterioration in the situation. The 30-month scheme is running, and it is running effectively. We hope—[Interruption.] No. Very soon we hope to be up to the rate of 18,000 cattle slaughtered a week in England and Wales in the categories about which we are now talking. We cannot do much in excess of that until we have brought on stream substantially more cold storage capacity to store the carcases.
Mr. Michael Lord: Will my right hon. and learned Friend give way?
Rev. Ian Paisley: Will the right hon. and learned Gentleman give way?
Mr. Hogg: No; I shall now make some progress. I shall give way to my hon. Friend the Member for Central Suffolk (Mr. Lord) in a few moments, and then to the hon. Member for North Antrim (Rev. Ian Paisley).
I turn now specifically to BSE. The Government's first and paramount duty—the one with which my Ministry is charged to perform—is to ensure the safety of the food we produce and the products we consume. I take this opportunity again to state my settled conviction that British beef is safe, and that it can be eaten with complete confidence. No other country in Europe or in the world can point to such sophisticated and elaborate systems that have been designed to deliver a quality product.
The key decision, taken following consultation with the producers and the retail industry, was to keep out of the food chain beef from cattle over the age of 30 months. One reason for that is that confirmed cases in cattle under the age of 30 months are virtually unknown. That, combined with a vigorous enforcement of the slaughterhouse rules, provides for a very high degree of consumer protection.
There are, however, many specialist beef herds that have never had a case of BSE, and, because of the circumstances in which they are raised, are very unlikely ever to have one. Some of those cattle are normally marketed over 30 months of age. To take account of that, we are now consulting on a change that will permit beef from those animals back into the market for human consumption. That is a necessary and a justified step, but it is a step that requires special consideration; hence the importance that I attach to consultation and to the views of the Commission. I give way to my hon. Friend the Member for Central Suffolk.
Mr. Lord: I am grateful to my right hon. and learned Friend for giving way. His remarks about help for prime beef under 30 months old will be greatly welcomed by Suffolk farmers. May I echo other hon. Members' concern about slaughtering, because I do not think that one abattoir in Norfolk or Suffolk is working? In fact, I believe that just one abattoir in East Anglia, at Brentwood—[Interruption.]—I hope that my right hon. and learned Friend will listen—is working. Today, my farmers impressed on me the need to get the slaughtering operation under way as quickly as possible, to restore confidence in the market and to let them know what is going on.
I urge my right hon. and learned Friend to improve his communications with our farmers so that they know what is going on, when their animals can be expected to be slaughtered and when they will receive their money.
Mr. Hogg: Both the points that my hon. Friend has made are, in principle, entirely justified. We were anxious to get the system under way as speedily as possible, but I have already drawn attention to the restriction imposed by the limitation on the rendering capacity. That is why we started with a limited number of abattoirs operating under the scheme, but more will be joining it on Monday week. As we increase the cold storage capacity, we will be able to bring yet more abattoirs into operation under the scheme.
As to communication with the farming community, we have already sent out two news sheets, and we will do more of that. Of course it is important. My hon. Friend the Minister of State sees representatives of the industry every day, and I see representatives whenever they want. I believe that relations are very good, but we will obviously do our best to improve them in any way we sensibly can.
Mr. William Cash rose—
Rev. Ian Paisley rose—
Mr. Hogg: I give way to the hon. Member for North Antrim (Rev. Ian Paisley).
Rev. Ian Paisley: I appreciate the Minister giving way, and remembering that Northern Ireland is still a part of the United Kingdom. May I say that I welcome most heartily his plans about immediate storage? Northern Ireland has immediate capacity for storage, so why cannot the slaughter happen there tomorrow? We have to slaughter 6,000 head of cattle every week, and we could proceed now because we have the storage. Can he give the green light to that slaughter, if I might use that term[Laughter]—or perhaps an orange light would be better?
Mr. Hogg: I do not need any reminding, especially when the hon. Gentleman is in his place, that Northern Ireland is part of the Union. Speaking for myself, I am extremely glad it is, and I hope that it will remain so for as long as the House is in place.
Mr. Cash rose—
Mr. Hogg: I am answering the question from the hon. Member for North Antrim.
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As regards the cull, in Northern Ireland, between 3 and 14 May, some 2,620 beasts were slaughtered. We estimate that, today, some 500 beasts will be slaughtered in Northern Ireland. I hope that the hon. Gentleman will take some reassurance from those figures.
Several hon. Members rose—
Mr. Hogg: I will give way first to my right hon. Friend the Member for Honiton (Sir P. Emery) and to hon. Members on the Opposition Benches.
Sir Peter Emery: I thank my right hon. and learned Friend for giving way. Will he deal with two points that he has not addressed? First, in order to encourage the throughput through slaughterhouses, a massive amount of refrigerated storage is, of course, necessary, but will he also encourage the greater use of incineration, particularly in the west country, which has the required facilities? That would considerably assist the scheme.
Secondly, my right hon. and learned Friend has told the House that he believes that the scheme is working well, but the information that he is getting does not correspond with what the farming community is feeling. Would he therefore consider arranging for his Parliamentary Private Secretary or one of his officials to be in daily contact with the intervention board—
Mr. Geoffrey Clifton-Brown: That is happening.
Sir Peter Emery: That may be so, but the information that that board is getting from the farmers and that which the board is giving the Minister is not the same. That information needs to be co-ordinated.
Mr. Hogg: It is perfectly true that, in the first few days after 29 April, we did not get the throughput that we would have liked. However, it is also true that, in recent days, there has been a substantial improvement in the number of beasts slaughtered under the scheme. My hon. Friend the Minister of State chairs a daily meeting with representatives of the relevant industries, and is therefore kept fully informed of the day-to-day facts. We have the slaughter figures on a daily basis. I have today's estimated slaughter figure in my hand—an estimated 4,173 beasts were slaughtered in the UK today. We take the figures on a daily basis.
Mr. Alex Salmond: Has the Minister looked at the unemployment figures today? Scottish unemployment is rising, while UK unemployment is falling. Scottish unemployment is above the UK average, while it has previously been below it. That is not all due to BSE, but it underlines how critical the export market is to employment in Scotland—and that also applies to Northern Ireland. My constituents are practical and pragmatic. We want our beef back on European markets. We do not want to replay the battle of Trafalgar like the Secretary of State for Scotland.
Will the Minister give an undertaking that, if he is going to adopt a step-by-step approach, the case for Scotland and Northern Ireland will be considered at an early stage of the process, given the critical importance of exports to our economies?
Mr. Hogg: We are indeed proceeding in a step-by-step way. I had had it in mind that my speech should unfold in

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precisely that way. I shall shortly come to the question of relaxing the ban, and seek to address that point in that context.
Mr. George Foulkes: With respect, I wonder whether the Minister really knows what is happening out in the country. One of the biggest problems is red tape. Cattle are being taken hundreds of miles only to be turned back because of technicalities. There is problem after problem with the red tape that was set up to discourage cattle from going into intervention store to stop a beef mountain developing. The Prime Minister promised to cut the red tape but nothing has been done. What is the Minister going to do about it?
Mr. Hogg: That criticism is not correct. It is true is that, until recently, we wanted to discourage people from putting beef into intervention. However, when the crisis occurred, the rules were relaxed substantially, the classes were opened up and we made changes in administration. If the hon. Gentleman has specific points that illustrate undue bureaucracy, I should be grateful if he would let me have them in writing, and we will consider what we can do to address them.
Mr. Ian Bruce: Will my right hon. and learned Friend comment briefly on beef cattle aged over 30 months—possibly those under three years—being allowed back into the food chain? That would reduce the pressure to destroy perfectly good beef. Secondly, beasts are being held on farms, and in Dorset they cannot be slaughtered but still need food. Will he consider opening up set-aside, so that those beasts can be fed? That would cost nothing, and would take some pressure off my farmers.
Mr. Hogg: My hon. Friend's point about set-aside is good. We are consulting the Commission about that. It is right to draw attention to the importance of certified herds. We put proposals out for consultation about 10 days ago, and I hope that we will complete that in a few days. We can then consider what the industry has said about that concept. I want to discuss it with the Commission, because it is better by far to proceed with its agreement. However, I understand the importance of the concept of certified herds as a route back into the human food chain for cattle over the age of 30 months.
Mr. William Ross: The right hon. and learned Gentleman was challenged about imports from third countries. Why was such a relaxation of restrictions on imports necessary to supply that beef? Given the complete traceability of beef from Northern Ireland, and given our exports of some 54,000 tonnes of beef to Europe every year, was not beef of the required quality available in the United Kingdom? If there had been no relaxation, there would not have been a drop in the British beef market.
Mr. Hogg: The hon. Gentleman is right to draw attention to the improved traceability and record keeping in Northern Ireland, and that point is extremely well founded. But his conclusion in relation to imports from third countries is not correct. The processors needed beef of a certain age and character. They got that primarily,
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but not exclusively, from cull cows. They needed to get beef from elderly cows and that was best sourced from third countries. We therefore relaxed the import prohibition provided that those countries did not have confirmed cases of BSE.
Mr. Cash: Does my right hon. and learned Friend accept that Staffordshire farmers are having an extremely difficult time, that the slaughtering and abattoir facilities are simply not available under current plans, and that farmers are becoming extremely impatient about the lack of co-operation that is causing them so much difficulty? Has my right hon. and learned Friend heard of the suspicion that is growing that the renderers and those involved in the abattoir business may be so organising affairs as to ensure that they gain a significant advantage as against the free market in the cattle market auctions as the matter progresses and as we come out of the crisis?
Mr. Hogg: I understand the anxieties that have been expressed by my hon. Friend's constituents. The past eight weeks have been a calamity for the British beef industry and for British farmers. They are desperately worried, they want to move their cattle, they feel that they cannot feed them, they see substantial financial problems, and it is true that the slaughter scheme has moved forward less rapidly than we would have wished. But I hope that we will soon be slaughtering at the rate of 18,000 per week in England and Wales, and that, as we introduce more cold storage capacity, we shall significantly increase that figure.
Mr. Malcolm Bruce: The Minister says that he is concerned, but does he have any idea how angry people feel after eight weeks of simply being told that the Government are still trying to get their act together? People want the ban lifted. How many weeks will it be before we even begin to obtain a reduction in the backlog? Does the Minister accept that, without that reduction, there is no chance of persuading Europe to lift the ban?
Mr. Hogg: I rather regret giving way to the hon. Gentleman, because that was a rather intemperate intervention.
Mr. George Walden: I should like to say something a little more helpful to my right hon. and learned Friend. There is a danger in the slaughtering operation of too many expectations being laid on my right hon. and learned Friend and the Government. What would my right hon. and learned Friend like to suggest to the NFU, the slaughterhouses and the renderers in terms of initiatives that they could take at local level, rather than simply expecting everything to be organised by the Government?
Mr. Hogg: My hon. Friend is entirely right. The Government can lay down general schemes, designate with the intervention board and others relevant abattoirs, markets and collection points, and make arrangements for payments and so on, but when it comes to the bilateral negotiations, which have to take place, with regard to the ordering of slaughter, in the end that has to be done locally between farmers, abattoirs and markets. Government do not have the mechanism effectively to organise the slaughter of individual beasts.
Mr. Peter Viggers rose—
Mr. Tam Dalyell rose—
Mr. Hogg: I am going to make some progress.
I recognise that, as a result of the crisis in the beef sector, many individuals and businesses have suffered greatly, and I have immense sympathy for them. But we cannot use public money simply to compensate for the loss of profit. We have therefore targeted resources on the critical links in the chain, so as to provide a breathing space during which the sector can adjust to the new market circumstances. To achieve this, we have committed around £1 billion in support of farmers, renderers, abattoirs and cutting plants.
I accept that many people have suffered loss for which they will receive no assistance. That is true, but to try to provide assistance to everybody who has suffered loss would be wholly outside the ability of this House or of the Government.
Mr. Robert Hughes rose—
Mr. Viggers: Will my right hon. and learned Friend give way?
Mr. Hogg: No, I wish to make some progress. The hon. Member for Aberdeen, North (Mr. Hughes) referred to this matter in a previous debate.
There are others who have suffered loss—hauliers, processors, shops and retailers. I know perfectly well that people have lost their jobs, and I have the utmost sympathy for them—this is a beastly business. But we cannot pay money to everybody who has suffered loss. Therefore, we must define the principles on which we are to operate, and they are those that I have outlined to the House on this occasion and on others.
I turn next to the bans on the export of British beef and beef products. Of course most attention has been paid to the bans imposed by the European Union and by member states. However, we should not ignore the fact that other countries, outside the European Union, have also placed bans on British beef and products, and that some of these bans have been in place for a long time.
In our view, these bans have neither scientific nor, in the case of the European Union, legal justification—hence our determination to lodge a legal challenge under article 173 of the treaty—and should be lifted as speedily as possible. The oft-repeated statements by EU Agriculture Ministers that the bans are to reassure consumers in other European countries are not a proper or satisfactory explanation for policies so unjustified in their character and so injurious in their consequences. The House will know that the European Union standing veterinary committee is today considering proposals brought forward by the Commission. These proposals would, if approved and subject to conditions, provide for a lifting of the European Union ban in respect of gelatin, tallow and semen. The Commission is clearly seeking to re-establish a single market in beef and beef products, and I welcome these proposals as an important—though modest—first step.
I hope that during today's debate, we will learn the outcome of the committee's discussions. I should, however, make one point clear in advance.
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Today's meeting is not the make-or-break event described in some sections of the media. I very much hope that the proposals will be adopted. However, if they are not, the Commission is obliged to submit without delay a proposal to the Council. I can assure the House that, in that event, I would be pressing for the implementation of the Commission's proposals. A failure to make progress would seriously complicate the relations that exist between the United Kingdom and other member states.
Once these proposals are accepted, we shall look to the Commission to bring forward further measures that will provide for additional relaxations in the ban—for example, lifting the ban on exports to third countries and exempting certified herds. That would be of particular importance to Scotland and to Northern Ireland, as well as elsewhere in the UK. Our objective is to move as rapidly as we can to a total removal of what is, in our view, a wholly unjustified interference with the single market.
Mr. Dalyell: Before rational and possibly difficult decisions are made in this area, we should know what progress is being made in the basic science of the matter. I am told by Peter Wilson, the former head of the huge Bush complex, that very important work has been curtailed in the neuropathogens unit because the work has been done on hamsters, as there is insufficient money to experiment on big animals. It is tragic that such important work has been curtailed at this time.
What is happening in relation to the examination of prions? Some evidence is coming forward that it is not just a matter of the temperatures that food is subjected to, but the fats that may protect the prions. This is the root science of the matter. Until these matters are resolved, it may be difficult to persuade other countries to lift the bans.
Mr. Hogg: I make no complaint to the hon. Gentleman, but—if he will forgive me for saying so—his intervention sounded more like a speech. I have no doubt that he will be seeking to catch your eye, Madam Speaker, or that of your successor in the Chair during the next two days, and detailed points in response to the hon. Gentleman's questions will be made during the winding-up speeches.
I wish to refer to the discussion about the selective cull. Much of that discussion ignores the true nature of BSE. BSE is not a highly infectious disease like foot and mouth, which can be contained and eradicated by a slaughter policy. The cause of BSE lies in the feed that was fed to cattle. In 1988, by excluding the use of ruminant protein in cattle rations, we took the step that was necessary to eliminate the incidence of BSE in the national herd.
As a consequence, there has been a dramatic and continuing decline in the numbers of confirmed cases. The peak was reached in 1992, with a total of 36,681 confirmed cases. Last year, there were 14,062 confirmed cases. This year, we expect a further reduction of around 40 per cent., and the trend will continue until, by the end of the decade, the incidence in the national herd will be extremely low—probably in the region of 2,000 confirmed cases, although independent estimates suggest an even lower figure.
To reinforce the policy, and because we accept that some ruminant protein containing the infective agent must have been fed to cattle after 1988—hence those cases

979
involving animals born after the ban—we have decided that, as from 29 March this year, there will be a total ban on the incorporation of mammalian protein into any rations for farm animals.
Dame Elaine Kellett-Bowman: Will my right hon. and learned Friend give way?
Mr. Hogg: In a moment.
There can be no justification for the wholesale slaughter of UK cattle. Any selective cull needs to be proportionate in terms of benefit and risk and to be seen in the context of measures to lift the ban. To the best of our ability, we must ensure that a cull is targeted on those beasts that are most likely to develop BSE.
Dame Elaine Kellett-Bowman rose—
Mr. Hogg: I shall give way to my hon. Friend, but I am conscious that I have not yet given way to my hon. Friend the Member for Gosport (Mr. Viggers). I shall do so in a moment.
Dame Elaine Kellett-Bowman: Has my right hon. and learned Friend seen the article in The Veterinary Record of 6 January 1990 which refers to a study of the inheritance of susceptibility to BSE, and not the inheritance of BSE itself? Has any further work been done in that area?
Mr. Hogg: Work has been done and is continuing on the possibility of vertical transmission, which I think is the point that my hon. Friend is making. We hope to be able to publish the results of that work at the end of the year. I am reluctant to authorise a break in the study earlier than was intended, because of the fear that that could invalidate the results.
Mr. Viggers: It is good of my right hon. and learned Friend to give way to me. He will know that I am worried about the headboning industry. Many parts of the meat industry can mitigate their losses or draw profit from other areas, but headboning tends to be a specialist industry in which people have borrowed money to meet European requirements. Now the industry has gone completely, because of Government regulation.
I am aware that my right hon. and learned Friend is relying on legal advice to say that no compensation is payable to headboners. I would ask him, however, whether that is fair.
Mr. Hogg: My hon. Friend has fought strenuously for the cause of his constituents, and has put their case with great eloquence. I have not found it easy to deal with, because it is perfectly true that people have been put out of business. It is equally true that Governments of all political complexions have done what I am doing. It is therefore important to adhere to precedent. My hon. Friend is right about the legal principle; I am most unwilling to depart from an established precedent, in spite of the eloquence with which my hon. Friend has argued this case.
The crisis in the beef industry has been a devastating blow, but concerned though we are about the plight of this sector, we must recognise, and take every opportunity
980
to assert, that, over the past four years, British agriculture has experienced a remarkable improvement in its fortunes. Judged by any standards, the prosperity of British farming is soundly based.
Mr. Roy Beggs: Will the Minister give way?
Mr. Hogg: I want to conclude with some final observations. My Department has two duties. Of course we fight for the interests of the British farmer and for those in related industries. Their concerns are our concerns, their interests are our responsibilities. We have an overriding and paramount obligation to every consumer, however, to the public and to all our fellow citizens. It is a duty to ensure the safety of the food we grow and the products we consume. No interest, no concern, and no obligation is greater than that.
5.11 pm
Dr. Gavin Strang: It is regrettable that the House of Commons is being forced to hold its annual agriculture debate on a motion for the Adjournment of the House. The Government have driven a coach and horses through the procedures of the House. They have contravened the explicit recommendation of the Select Committee on European Legislation—that the common agricultural policy price proposals
"raise questions of considerable political importance"
and warrant
"an early debate by the House rather than by European Standing Committee A."
The Government have, therefore, prevented the House from expressing its views through amendments to a proper motion, and have prevented us from tabling amendments in relation to the beef crisis. We can only conclude that the Government were in real fear of amendments and the consequent Divisions that might have taken place. It is indeed ironic that the Government's divisions over Europe have led them to undermine the authority of the Houses of Parliament.
Of course we welcome the fact that the debate has been extended to two days—a fact of which the Minister made great play—but I put it to him that if the British Government told the British people that the general election campaign would be double its normal length but that there would not necessarily be a proper ballot at the end of it, the electorate would not think that the process of democracy had been adequately served.
Mr. Edward Garnier: The hon. Gentleman should cut the lather and get to the point—which is that he would have made the same speech whatever motion had been tabled, so his objections are entirely bogus.
Dr. Strang: I have had the privilege of being a Member of this House for almost 26 years. One thing people learn in that time is that their real power in the House lies in their vote. We need to be able to vote on a meaningful motion, and we are being denied that opportunity.
Sir Roger Moate rose—
Dr. Strang: I may give way later. A great many people want to intervene, but I shall give way only on the big issues—and the big issue here is the beef crisis.

981
I was rather surprised to hear the Minister say that British agriculture is the most prosperous in the European Union. If he had said that before 20 March, I would not have queried it. The beef crisis, however, is likely to have an enormous impact on this country. I realise that beef prices are also depressed in other EU countries, not least in Germany, but there are huge knock-on effects in the United Kingdom—in the export industry, for example. Much of Northern Ireland's beef production is for export; the same applies to the north-east of Scotland. In England and Wales, too, there are herds and plants dedicated almost exclusively to the export market, so I find it hard to believe that British agriculture is the most prosperous in the Union.
Mr. Beggs: About 80 per cent. of beef production in Northern Ireland has to be exported. Instead of waiting for the Commission to come up with meagre proposals, should not the Minister take up the opportunity offered by quality assurance schemes in Scotland and traceability in Northern Ireland? Surely it would be better to save herds that have never had a case of BSE than to dump them in skips for rendering?
Dr. Strang: The hon. Gentleman makes an important point—and with some passion. I intend to return to the issue of traceability later in my speech. Northern Ireland produces high quality beef and its industry is geared to the export market. It has been very successful in recent years, so a great deal is at stake and I can well understand the hon. Gentleman's concern.
The Labour party's commitment to radical reform of the common agricultural policy is well known. We have reiterated it year in, year out in these debates. The Government have been in power for 17 years and have not made a single sustained effort to secure changes to the CAP. I remind the Minister of what the right hon. Member for Suffolk, Coastal (Mr. Gummer) said when he was in the right hon. and learned Gentleman's post. Speaking in 1993, after the MacSharry changes that had been discussed in the Council in 1992, he told the House that the reformed common agricultural policy was
"designed on what Britain wanted."
In the CAP reform negotiations, he added,
"there was no single major element of our negotiating list that we failed to secure in those negotiations."—[Official Report, 25 March 1993; Vol.221, c.1228.]
As one of his first acts on becoming Minister of Agriculture, Fisheries and Food, the right hon. and learned Gentleman announced the outcome of the Government's review group, or think tank, on the CAP. I welcome some of what the Minister said this afternoon, but his is a deathbed conversion after 17 years of failure to tackle the real faults and weaknesses in the CAP.
The objectives of the CAP are set out in article 39 of the treaty of Rome. That treaty has been in place for 39 years. The intergovernmental conference was an opportunity to set new objectives for the common agricultural policy—objectives that reflected the needs of the industry and the needs of rural areas throughout the European Union as we enter the 21st century. It is probably a matter of regret to many hon. Members on both sides of the House that the Government have made no attempt to seize the opportunity offered by that conference.
The significant item of new expenditure in the common agricultural policy in the forthcoming year will be support for the beef industry, which is needed as a result of the
982
crisis. We recognise the need for that support. Some has already been put in place by the Government, and more will be needed through the common agricultural policy.
The House will clearly remember the Secretary of State for Health reporting to us on 20 March 1996 that the Spongiform Encephalopathy Advisory Committee had advised the Government that there was a new strain of Creutzfeldt-Jakob disease, and that BSE was the most likely explanation for the 10 cases of the apparently new strain. The Minister of Agriculture 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.]
Without doubt, the market for beef and beef products collapsed in the United Kingdom and throughout Europe. On 27 March, the imposition of a worldwide ban on UK beef exports was confirmed by the European Commission. On 1 April, the Minister went to Luxembourg offering the huge 30-month slaughter scheme—the slaughter of cull cows and of cattle over 30 months. He came away with an obligation to devise an additional slaughter scheme, but without even securing a timetable for the lifting of the European Union ban.
On 29 April, the Minister presented a proposal for an additional slaughter programme to the Council of Agriculture Ministers. He came away from the Council with an obligation to strengthen his slaughter proposals—again without even a timetable for the lifting of the European Union ban.
Last week, the European Commission agreed that it would recommend to the European Union veterinary standing committee that the ban on tallow, gelatine and semen be lifted. Labour shares the Government's commitment to the complete lifting of the ban on British beef and beef products, and I am sure that the Minister will acknowledge that any lifting of the ban on those three products will affect relatively few businesses and jobs compared with what is at stake in the context of the overall ban on beef and beef products.
The Minister has had to operate against a background of incredible behaviour on the part of his Cabinet colleagues. It has been widely reported that the Foreign Secretary has written to the Prime Minister demanding stronger leadership in relation to the BSE crisis, and that, in the context of the crisis, the Prime Minister has used language that I cannot repeat in the House of Commons about his European Union counterparts.
Then, of course, we had the threat of a trade war—a threat that lasted 24 hours before the Deputy Prime Minister was scuttling between the television studios to explain to people that the trade war threat was off, and that the issue would have to be resolved by negotiation; he repeated that statement on Monday in the House of Commons.
As the Farmers Weekly editorial said,
"government ministers have yet again made"
Britain a
"laughing stock".
If Ministers really believe that such behaviour is helping us to secure a lifting of the ban, they have taken collective leave of their senses.
It is obvious that failure to execute policies in this country properly will have done nothing to restore our standing in the European Union; that standing will not be

983
restored until the Government get a real grip on BSE. We must restore the confidence of our consumers—progress has been made in that regard—and we must restore the wider confidence of the world in British beef.
Sir Jim Spicer: The hon. Gentleman just said, "until the Government get a good grip on BSE." What would he do that is not already being done at the initiation of SEAC and all the scientific advice that we are given? Would he go in for mass slaughter, like the French?
Dr. Strang: No. We set out our eight points, which we believe should be implemented; I shall paraphrase them later. We set out clearly in the late 1980s and early 1990s—it is all on the record in Hansard—the actions that should have been taken. It is unquestionable that, if we had implemented the policies and proposals recommended by the official Opposition since BSE was identified in 1986, we should not have been in the position that we are in now. That cannot be denied.
At home, the 30-month rule, in the eyes of most people, remains in chaos. I do not think that many Conservative Members who met farmers earlier today recognised the description of the slaughter scheme that the Minister gave us earlier. The scheme was drawn up by the Government at the end of March and was taken to the Council of Agriculture Ministers meeting in Luxembourg on 1 April. According to the Ministry press release of 16 April, the programme was due to come into operation on 29 April. Here we are, on 15 May, more than six weeks after the scheme first came to light, and it is still not properly in place.
When the Government were drawing up the scheme, they must have been aware of the capacity of our rendering plants. They must have been aware that that would be a constraint on the throughput.
I say to the hon. Member for Buckingham (Mr. Walden)—I am not sure whether he is still in his place—that it is no use the Government trying to wash their hands of this. It is no use blaming the industry—whether the farmers, the abattoirs or the markets—or officials, or the intervention board. This is a huge operation. Ministers took the decision to implement a huge slaughter scheme, and they have responsibility for ensuring that it is executed properly.
The only possible interpretation of the minutes of the last Council meeting is that the Government are obliged to strengthen their proposal for an additional selective slaughter scheme to help eradicate BSE.
One of Minister's problems has been convincing our European counterparts that we have the facilities to trace the animals most at risk of BSE. I come to the point that the hon. Member for East Antrim (Mr. Beggs) made. Northern Ireland has a superb animal identification system. The Minister's task would have been made much easier if the Government had acted on Labour's proposal six years ago and established a similar identification system in the rest of the UK.
Traceability will be the key to getting us out of this crisis. Most hon. Members have probably received representations stating that technology is available to set up a national cattle database. I should be grateful if the
984
Government would give us the response to the proposals being made by National Milk Records, or any other body, for the establishment of such a system.
Rev. Ian Paisley: I am sure the hon. Gentleman heard the question I asked the Minister. Does he agree that, as cold storage is now available in Northern Ireland, it should be used to allow Northern Ireland to get on with dealing with this matter?
Dr. Strang: Yes, we support that. Indeed, I think the Minister acknowledged that the Government were going down that road. There is obviously some disappointment that he spoke about six weeks. From what the Minister said on previous occasions, we were led to believe that it might be possible to bring that additional cold storage into operation sooner. No one disputes the fact that the priority must be to slaughter those animals as soon as possible. That obviously involves, ultimately, rendering all animals and incinerating all remains of the specified bovine material and the other parts of the carcases. I assume that the Government are committed to that.
Confidence in British beef will be restored only when all measures necessary to keep the BSE agent out of our food are implemented and properly enforced. Labour has set out proposals to restore confidence in the safety of beef, to keep the BSE agent out of our food, to improve the epidemiology of BSE, to increase consumer awareness and to improve the role of Government.
As the Minister will be aware, one of our proposals concerned the encouragement of quality assurance schemes—an issue of interest to Northern Ireland, Scotland and other parts of the United Kingdom. We want quality assurance schemes to be supported, because we want consumers to know where their beef comes from and how it was produced. The Prime Minister, in his ignorance, condemned the proposals, but I am pleased that the Minister said on 3 April that the Government would go down that road for cattle over the age of 30 months. I must put it to him, however, that, six weeks later, farmers of high-quality and late-maturing animals are becoming increasingly frustrated by the lack of progress.
As the Minister knows, we also believe that there should be a full investigation of the fact that 67 per cent. of BSE cases now occur in cattle born after the ban on ruminant-derived protein in ruminant feed: 67 per cent. of cases in the first quarter of the year were among such cattle. The right hon. and learned Gentleman told the House last week that there had been a continuous flow of contaminated feedstuffs to cattle after the feed was banned, and he said that that was why the rules had been tightened as recently as April this year; but he has said that he does not agree that we should look into the cases of cattle born after the ban. It is short-sighted of the Government to refuse to investigate those cases.
Mr. Douglas Hogg: It may help the hon. Gentleman to have the figures. On 7 May, BSE had been confirmed in 26,798 animals born after the introduction of the feed ban in July 1988. Of those animals, 82 per cent. were born in the second half of 1988 and in 1989. A total of 3,481 infected animals were born in 1990, 1,220 in 1991, 100 in 1992 and one in 1993.
Dr. Strang: I take the Minister's point, but the peak incidence of BSE is in cattle four to five years old. I dare

985
say that cattle often become infected when they are under six months old, but in most cases the symptoms are not detectable until they are four or five years old. As the Oxford study published last week confirms, two thirds of current cases are of animals born after the feed ban was introduced, and that will continue.
An investigation of the younger BSE cases—cattle born after the ban—may well reveal that a number of animal feed mills were failing to keep the BSE agent out of our animal feed after the feed bans were in place. The Government are already committed to an additional selective slaughter programme; identifying those feed mills and their customers may well enable us to have a more closely targeted selected slaughter policy. Improving our ability to identify the cattle at greatest risk of BSE will enable us to have a bigger impact on reducing the number of confirmed BSE cases in the future. That would certainly do the United Kingdom no harm when it comes to convincing our European counterparts that BSE is under control, and that the ban on our beef should be lifted.
There are already some important lessons to be learnt from the BSE crisis. The first is that deregulation, under-regulation and delay are entirely inappropriate in matters of public health. BSE was officially identified in 1986; the House is aware of the Government's subsequent record—a record of delay and under-enforcement. There was a 20-month delay after BSE was identified before farmers had to destroy all suspect cases; a delay of two and a half years before the Government said, in June 1989, that they planned to keep the most infective offal out of human food; and a further seven-month delay before the ban was fully implemented throughout the United Kingdom. Farmers were not fully compensated for slaughtering BSE cattle until February 1990. The Government have admitted that under-compensation for the previous 18 months deterred farmers from declaring suspect cases.
Some hon. Members who follow these matters may remember that, in last year's agriculture debate, I warned the House of the implications of the cuts that had been made in the number of public servants responsible for keeping our food safe. The second lesson that must be learnt from the current crisis is that regulation to protect public health must be effectively enforced. The Government will recall that they have a very poor record in regard to enforcing BSE controls. In September 1995, 48 per cent. of slaughterhouses visited were found to be in breach of controls designed to keep infective offal out of human food. This March, 4 per cent. of slaughterhouses and 17 per cent. of rendering plants visited were still in breach of those controls. Eight feed mills were recently found to be in breach of the ruminant protein ban to keep BSE out of animal feed.
Mr. Hogg: Let me make two points. First, it is true that there was a failure in respect of feed mills, but that preceded 29 March, when the new regulations were introduced. I am sure that the hon. Gentleman did not wish to suggest otherwise. Secondly, I think that the hon. Gentleman will accept that, since the beginning of this year, nearly all the failures, however regrettable they may be, have been very minor.
Dr. Strang: I am grateful to the Minister for raising the first point. It enables me to make it clear that at no point have I suggested that contaminated feed is now reaching our cattle, following the bans introduced at the
986
end of March and the beginning of April. I take it that those bans are achieving their aim. As the Minister will appreciate, I am referring to contaminated feed that reached our cattle after the imposition of the bans six years ago.
I take the Minister's point about enforcement; I accept his assurance that there have been improvements. I know that he has called people in, and has been clamping down. Much of what I am saying, however, relates to decisions and failures on the part of his predecessors. There is no doubt that they were responsible for those decisions and failures. BSE was identified in 1986; if significant damage has been done to the health of the human population—and let us hope that no damage has been done—it was done in the 1980s and into the 1990s, depending on the extent to which the controls were enforced.
Let me return to an issue of which I made great play in last year's debate, with the Minister's predecessor. I refer to the attack—that is the word for it—that successive Governments have mounted on the state veterinary service. The number of people employed by the service has fallen by about a third since the present Government came to power. It has been rationalised and re-rationalised, and some of its work has been privatised. I believe that there were 25 veterinary investigation centres in 1979—I am not referring to the central laboratories—and that we are now down to 13.
The veterinary service is crucial. BSE is currently the major livestock disease, but there have been livestock diseases in the past and, with the single European market and the movement of cattle and other livestock into the United Kingdom from eastern Europe in particular, it is vital that we rescue—I use that word deliberately—our state veterinary service. It is hard to believe that, when we left office, our veterinary service was probably among the best in the world. Now, it is a shadow of its former self, and I appeal to the Government to act.
The third lesson to be learnt is the importance of research. We need a strong research base, capable of long-term work to deal with problems such as BSE. The current BSE-CJD crisis throws new light on the importance of our publicly funded research establishments. The short-term contracts encouraged by the Government cannot be beneficial to the crucial work being done on BSE and CJD, or, indeed, to any other research. Furthermore, the prior options review—the programme for selling our research establishments—must now be abandoned. Surely the Minister would not want to put the units that are responsible for investigating BSE and CJD through the uncertainty and upheaval that the review entails.
There is no escaping the fact that BSE and CJD will be with us for a number of years. Long-term research needs to be done by scientists who are not constantly looking over their shoulder for the next job.
One of the most important scientific tasks is the establishment of a live test for BSE. The Minister will be aware of widespread reports that the Ministry of Agriculture, Fisheries and Food has hindered the development of a live test. If it transpires that it has, that will represent an unforgivable breach of its duty to protect animal and human health.
Mr. William Ross: Would the hon. Gentleman support further research to try to determine whether the primary

987
cause of the present epidemic of BSE was sheep scrapie or bovine scrapie, as there still seems to be some argument about which one it was? If the answer is bovine scrapie, our concerns about the transmission of the disease across species will be greatly reduced.
Dr. Strang: The hon. Gentleman raises an interesting point. It is still an open question. I have heard Ministry of Agriculture, Fisheries and Food vets defending the argument that the epidemic was definitely caused by scrapie. I see the Minister nodding his head—perhaps he agrees that we cannot be certain that the starting point was scrapie in sheep. A strain of BSE in cattle may well have multiplied for reasons that have been discussed—notably, the inadequacy of the rendering process. Whatever the cause, there is some concern that the agent can jump species—there is a belief that the disease may have spread to the cat population through pet food. We cannot rule out the possibility of the agent jumping species.
It is important to recognise that, when the scientists advised on the most likely explanation for the 10 new cases of CJD in young adults—the disease normally occurs in older people—it was purely on the basis that there was a BSE epidemic and a large number of people were likely to have eaten infected beef or beef products before the offal ban was put in place in 1989. There has been no evidence as yet to show that CJD in humans has been caused by eating contaminated beef and beef products. We still do not know whether the BSE agent has jumped species and is the cause of CJD in the human population.
Mr. Ian Bruce: To keep the debate on an all-party basis, will the hon. Gentleman confirm that he still stands by the Labour party's policies set out in 1975 and 1979—particularly those on farming and the nation? The hon. Gentleman and the Labour party were then encouraging the intensification of our beef and dairy industry. Members of the Labour party seem to be making many remarks suggesting that intensification and the use of concentrated foods were mistakes. I should be grateful if the hon. Gentleman would tell the House whether the intensification of feed was the right policy.
Dr. Strang: I am not quite sure that I follow the hon. Gentleman, but I shall try to help. There is no doubt that, if we want to produce reasonable quantities of milk and achieve reasonable productivity from dairy herds, there is a role for concentrated feed, but I suspect that there is general support throughout the wider community—reflected in the House—that, as far as is practically possible, we should use more extensive agricultural methods. Indeed, we should encourage organic farming, as the Government are doing.
Only a couple of weeks ago, I was privileged to open a new demonstration farm that linked the environment and farming and encouraged integrated crop management and less use of fertilisers and pesticides. There is a consensus that, while we need aids to production, it is desirable to minimise their use. There are many lessons to be learnt about recycling protein and the use of meat and bone meal. We are clearly learning the hard way.
There are important European aspects of the beef crisis. We are not uncritical of our European counterparts, and we want the ban lifted, but the Government have failed to
988
represent us effectively in Europe. We shall vote against the Government tomorrow because they have failed to represent our interests in Europe, they failed to act responsibly and with due diligence after BSE was identified in 1986 and they signally failed to get to grips with the crisis that followed the Ministers' announcements on 20 March of a possible link between BSE and CJD.
The Government have failed on three counts, which is why we shall vote against them tomorrow evening. I appeal to all hon. Members who agree with our criticism of the Government to join us in the Lobby.
5.45 pm
Sir Jim Spicer: It is natural, and I suppose unavoidable, that our debate today and tomorrow will centre largely on BSE and the iniquitous ban imposed by our so-called European partners. Most of my remarks will relate to beef and the action that we should take to restore prosperity to the beef industry and its allied trades.
It might be of interest to hon. Members if I broaden the debate and say a word about dairy quotas. The beef ban and problems relating to beef are here today and will hopefully be gone at some point in the future, but the milk quotas have been in place for a long time. The hon. Member for Edinburgh, East (Dr. Strang) said that he had been in the House for 26 years; I have been here for only 23 years, but I have a clear recollection of the run-up to the imposition of quotas and I know what happened between 1974 and 1979. The worst period was just after the ill-fated and unhappy—indeed unholy—alliance between the Liberal party and the Labour party, when the Liberal party agreed to maintain Labour in power. It was in 1978 that the damage was done to our dairy industry and the knock-on effect carried through to the quotas.
The Labour Government were in power in 1978. They were not facing an election, and they said that they had a long-term programme to support agriculture. In 1978, milk production increased in the United Kingdom by 4.7 per cent., in the Netherlands by 7.2 per cent., in Ireland by 12.4 per cent. and in Italy by a staggering 18.3 per cent. The key point is that in 1978 and 1979 it was clear to anyone who knew anything about agriculture and what was to happen in the future that there would have to be some form of control over milk production.
Mr. George Stevenson: While the hon. Gentleman is seeking to apportion blame for the milk quota, will he recall that in the autumn of 1983 the then Government were encouraging, through grants and money, the extension of milk production? Then, in April 1984, the Government presented the same people with a 9 per cent. across-the-board cut.
Sir Jim Spicer: I am grateful to the hon. Gentleman because he has raised the very point that I was about to make. In 1978 and 1979, the Government were actively discouraging increased milk production. In 1979, the first Conservative Minister of Agriculture, Fisheries and Food—now Lord Walker—was appointed; he immediately realised that we had to push up milk production in this country so that we would be ready when milk quotas were, inevitably, imposed. Of course, he gave every encouragement to us. [Interruption.] The hon. Member for Newcastle-under-Lyme (Mrs. Golding) may laugh. She was not in the House at that time and I do not think that she understands anything about milk production.
Mr. Robert Hughes: Will the hon. Gentleman give way?
Sir Jim Spicer: Perhaps the hon. Gentleman will allow me to pursue my line of thought and then I will give way.
By 1983, as a result of all the investment and encouragement in farming, our milk production was increasing dramatically—[Interruption.] I do not know which side of the European debate the hon. Member for Aberdeen, North (Mr. Hughes) was on at that time, but it was the European Commission which imposed the quota. We finished up with a much lower percentage of milk than France, Germany, the Netherlands or almost any other country. The blame for that small quota rests squarely on those who, between 1974 and 1979, did not increase milk production in the way that it could and should have been increased. We are debating the common agricultural policy and this is the time to try for a fairer quota. I hope that the Government will do that.
My next topic relates directly to the BSE crisis. Cull cows are being kept on the farm, and that will continue for another three or four months. Those cows are not dry, which means that our production may be slightly above quota. In any logical organisation—I presume that the European Union is logical—someone would allow an extension of our quota by about 5 per cent. to help our dairy farmers over a difficult period.
The Minister was right to say that until 20 March our farmers had had three marvellous years. I have never known a time when my farmers were not whingeing about almost anything. If it was not the weather it was something else and always there were problems. We must face the reality of exactly what happened on 20 March. First, the SEAC report was leaked to the press and was immediately printed in the Daily Mirror. The hon. Member for Peckham (Ms Harman) put down a private notice question at 12.15 and the Government had no choice but to make a statement that afternoon. They were pushed into that. That is why there was no consultation in Europe—[Interruption.] I wish that the hon. Member for Newcastle—under—Lyme would either stop giggling or leave the Chamber. She is not adding to the debate in any way. Perhaps she is enjoying herself. The scare headlines were followed by the French ban and the European ban was next.
Mr. Jon Owen Jones: Is the hon. Gentleman suggesting that the shadow Secretary of State for Health was acting improperly in tabling a question about potentially the greatest health scare this century?
Sir Jim Spicer: Certainly not. The SEAC recommendations and those of the chief medical officer were right and proper. As the Minister said, although he is the Minister for Agriculture, Fisheries and Food, his prime concern has to be the health of the nation. But for that private notice question, direct contact could have been made about the problem. It is not a Conservative, Labour or Liberal Democrat problem, but one that affects us all. I would have hoped for consultation rather than exploitation of the Daily Mirror story.
Mr. Ian Bruce: Perhaps my hon. Friend is being generous to the hon. Member for Peckham (Ms Harman). I hope that Opposition Members will read the issue of Hansard in which the hon. Lady said that it was
990
"the Government's reckless disregard for public health"—[Official Report, 25 March 1996; Vol. 276, c. 712.]
that caused the BSE crisis. Such words were one of the reasons for the Commission's ban on British beef.
Sir Jim Spicer: We all remember exactly what happened at that tragic time. Our farming community is suffering the consequences of all that happened over those two or three days.
The ban must be lifted, and every effort must be made to persuade the European Union that its continued imposition is damaging not only the British beef industry and British agriculture, but agriculture across the board. I know that such efforts are being made.
Mr. Robert Hughes: I am genuinely seeking information. When did the Secretary of State for Health or the Minister of Agriculture receive the SEAC report? Did it suddenly arrive on the Daily Mirror news desk before Ministers had seen it? It seemed from ministerial statements that Ministers had digested it thoroughly. If they had had it for even a few days before it leaked to the press and had made no effort to consult the Commission and had not understood its importance, the charge of incompetence can be levelled at them and not at my hon. Friends.
Sir Jim Spicer: Sadly, I am not a member of the Cabinet, but I understand that the report was discussed in Cabinet that week and it was decided that something would have to be said that week. But these matters were condensed and the irresponsible leak to the media for a good headline in the Daily Mirror played its part.
Mr. Robert Hughes rose—
Sir Jim Spicer: I am sorry. I will not give way because many hon. Members wish to speak.
We must persuade the Community to lift the ban, which is damaging agriculture throughout the Community. Many people seem to think that the lifting of the ban will automatically lead to a resumption of beef exports, but it will not. Another way will be found to block exports or some politicians will continue to frighten their populations. The chances of our getting a sizeable amount of beef back into the European Community is negligible, and that is sad because we worked hard to build up that market.
Before the ban came into effect, about 30 per cent. of the beef consumed in Britain came from the European Community. Action to shift the balance towards our own beef industry could be concentrated in that one area. We could cut that 30 per cent. to 10 per cent., which would almost balance the loss of our exports to Europe. There would be equilibrium. The cull cows that would leave the food chain account for a further 15 to 20 per cent. Even allowing for a fall in beef consumption, we would be in a much stronger position to rebuild our home base. In my view, we should concentrate on that.
How would we do it? There are two ways. Many people have called on the Government to take dramatic action and to ban the import of beef from Europe. I ask the Minister whether it is possible for us to do that on health grounds. My right hon. Friend the Minister of Agriculture has said that the way in which we treat our beef makes it

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much safer than beef that comes into the country from Holland, France or Belgium, where we know that they have BSE. Should we not say that we will introduce a ban until such time as those countries introduce the safety measures that we have introduced in relation to removing the brain and the spinal cord?
Mr. John Sykes: Did my hon. Friend read an article in the Daily Express—it was sent to me by one of my farmers from Whitby—stating that poisonous chemicals or growth hormones are still being injected into Spanish cattle, French cattle and Italian cattle against the law and that that beef is being eaten by people in the European Community? Is that not just as bad as the alleged atrocities relating to BSE? On that ground alone, should we not ban foreign beef coming into this country?
Sir Jim Spicer: I could not agree more. I believe that the time has come for us to retaliate—[interruption.] Inevitably, we hear an outcry from the Liberal Members.
Mr. Tyler: If the hon. Gentleman has been listening to the Minister, to the President of the National Farmers Union, to the Prime Minister and to the Deputy Prime Minister, he will know that that is ridiculous talk. He is delaying the day that we will get rid of the ban. The words that he is using today may discourage President Chirac—should he dare to read anything that the hon. Gentleman says—from releasing us from this ridiculous ban.
I ask the hon. Gentleman to consider one other thing. He rightly emphasised the need for consultation. Can he explain why, in the two days before the announcement in the House of Commons to which he has referred, the Minister of State was in Brussels—in the Council of Agricultural Ministers—but did nothing to consult our colleagues in Europe?
Sir Jim Spicer: The hon. Member for North Cornwall (Mr. Tyler) scares me—I frighten very easily. I will say what I want to say in the debate and I will deal with the British people because I know how they feel and I know that the hon. Gentleman and his colleagues are out of touch. They do not want to take any action. There is nothing to stop the Government demanding from other countries the same standard of beef as we have in this country. Why should those countries not deal with the offal in the same way?
Several hon. Members rose—
Sir Jim Spicer: No, I will not give way again—I shall finish my speech because many other hon. Members wish to speak.
Rev. Ian Paisley: Surely the hon. Gentleman will give way to me.
Sir Jim Spicer: Yes, I will.
Rev. Ian Paisley: I am sure that the hon. Gentleman has read with great interest that there has been an outbreak of this disease in a herd in the Irish Republic. Is he aware that that herd was slaughtered and put into the food chain?
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Does that not back up what he is saying—that we should be careful about bringing in meat from the European Union because they are not keeping up the proper standards themselves?
Sir Jim Spicer: I am delighted that the hon. Member for North Antrim (Rev. Ian Paisley) is present today and not in the European Parliament. That is another way in which we can approach this and something that the Government might consider doing. It is up to the general public to play their part. They have the power of their purse to demand the sale of British beef. They have the right to say to shops and restaurants, "If you will not sell British beef, we will go and buy it somewhere else". If some shops and restaurants do not sell British beef, plenty of other places will. In that context, I am delighted to have seen a press release stating that Asda is to ban all foreign beef. That is a step in the right direction.
The Members of Parliament from Dorset and all the candidates from Dorset wrote the following open letter:
"The recent beef episode has not been good for this country. However, it has graphically shown just how many people in Dorset are involved in the farming industry. It has further demonstrated just how critical farming remains in the fabric of our country's life and, most particularly, of our rural life.
Now that all the facts are known and it is confirmed that beef is safe for us all to eat, and certainly much safer than imported beef, it is perfectly right and proper for the general public to show their support for our farmers by insisting that British beef, and only British beef, will be available for sale. If any shop or restaurant cannot give such an assurance, then our advice is to go elsewhere and buy British."
I hope that that campaign will be taken up by all hon. Members and that they will all write similar letters to their constituents—it would not even cut across Liberal sensibilities.
I know that some hon. Members are a bit squeamish about picketing—I am not talking about violence, but about handing out leaflets and signing complaint forms—but that is a good way to do it. Only yesterday, one of my hon. Friends said that he had signed seven complaint forms in a McDonald's in one day. I am going to try to beat that record and sign 25. We can all go in and we can all sign for British beef.
This process works. It has worked with Wimpy, which has responded to public demand. We have been asked to lay off McDonald's because it may come round, but I do not think that it will. I do not think that Burger King will come round either, unless and until we put pressure on it. I will not eat a McDonald's burger until the company lifts its ban on British beef—and I certainly will not go into a Burger King even after that. McDonald's had better watch out, because I used to eat there quite a lot. The hon. Member for North Cornwall shakes his head; Liberal Members are always squeamish and they want the soft option, but there is no soft option on this.
Mr. Tyler: Will the hon. Gentleman give way?
Sir Jim Spicer: No, I will finish my speech. It will be a long haul for us to get back to where we were before 20 March, but it can be done if we all play our part. Let us announce that British beef is the safest in the world and let us eat only British beef and beef products, at least for the next few years. I am delighted to see the

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Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food on the Front Bench. She has done a lot over the past few weeks.
Dorset farmers have raised the following four points with me. First, we have to think about the problem of casualties. They are mounting on farms and something has to be done. That issue is uppermost in the minds of many of the people in the Gallery. My farmers care about their casualties and they want something done, and quickly.
Mr. Deputy Speaker (Mr. Michael Morris): Order. The hon. Gentleman has been in the House for many years and he knows that the Gallery does not exist.
Sir Jim Spicer: I apologise, Mr. Deputy Speaker. If people from Dorset are present in the House today, they will be extremely concerned about the situation in relation to casualties. Secondly, why is intervention not working? Why is not more beef going into intervention? My farmers cannot understand it—it is an escape route and more farmers could and should be using it.
The third issue is more staff. If we have an emergency—if we are spending an extra £1 billion over the next year or so—we should get decent staff. We need people who can answer a telephone intelligently and not pass farmers from one person to another. Finally, I refer to improved communications. Sending out circulars is one thing, but an occasional letter should be addressed to each farmer and signed by the Minister. That would be marvellous, and I believe that it done with computers as they are today. As we move forward and pick up on the number of cattle being slaughtered, that is something that we should do. And why not challenge the quality of imports?
I conclude on a happy note for Dorset. A slaughterhouse in my constituency—Normans—was removed from the list of abattoirs for some reason and therefore did not make the short list of 21. However, the Minister of State told me this afternoon that it will be reinstated in the list as from Monday week. That is a great boon to all the farmers in Dorset and, above all, to a marvellous slaughterhouse which has operated successfully for many years.
6.9 pm
Mr. George Foulkes: I am grateful to be called to speak in the debate not least because, if you, Mr. Deputy Speaker, had called the Liberal Democrat spokesman, the hon. Member for North Cornwall (Mr. Tyler), to speak immediately after the hon. Member for West Dorset (Sir J. Spicer), the simmering feud between the Conservatives and the Liberal Democrats in the west country could have erupted into a major conflagration. There has been one fire in the Palace of Westminster today and we do not want another.
Mr. Tyler: I must explain to the hon. Gentleman that I had beef for lunch, so I am feeling rather red-blooded and I reacted to the outrageous suggestions by the hon. Member for West Dorset.
Mr. Foulkes: I think that the hon. Gentleman's reactions predate lunchtime today. I am also grateful to be called in the debate as I am proud to represent a large rural constituency with extensive farming interests. The Ayrshire beef and dairy herds have the best reputation in the country.
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My colleagues who represent Ayrshire constituencies and I met a delegation of Ayrshire farmers who were part of the deputation that lobbied Members of Parliament today. We had a useful discussion and we learnt how strongly those farmers feel about the present situation. My colleagues who represent rural areas—the numbers are increasing on this side of the House and there will be many more after the next election—and I have emphasised to our colleagues who represent city constituencies that not only farmers but thousands of workers down the line are affected by the crisis.
Mr. Marlow: The hon. Gentleman said that many of his constituents are concerned about the present situation. How will they react to the news that the veterinary committee meeting in Brussels has risen without resolving the issue of gelatine?
Mr. Foulkes: I am grateful to the hon. Gentleman for making that point. My constituents will be deeply disappointed by that news, but I do not think that they will be surprised.
Thousands of workers in the slaughtering, rendering, meat-processing and haulage industries will be affected. Those in the equipment manufacturing and supplies industries will suffer also as farmers who are uncertain about their future cut back on their purchases. Some workers in those industries were laid off initially without wages or benefits. They will be sadly disappointed by the way in which the Minister of Agriculture dismissed them today with a wave of his hand. It was as though they did not matter—but they are suffering also.
The farmers and my other constituents contend that the Government's attitude has been characterised by dithering, complacency, confusion and by chaos. Although the Government's announcement might have been precipitated by a question from this side of the House—the hon. Member for West Dorset said that the Government intended to make an announcement anyway—they had been aware of the problem for some time. They made no preparations prior to the announcement: they did not assess the likely reactions or consequences and had no plan for dealing with them.
There is general concern also about the Government's blundering ineptitude in the negotiations. The Minister of Agriculture does not have the best reputation for tact and diplomacy—we have seen him at work in other contexts—and I think that that exacerbated our difficulties within the European Union. The Government have now introduced a selective cull and, as my hon. Friend the Member for Blackburn (Mr. Straw) said, we welcome the principle behind it. However, the cull was introduced before the appropriate measures were in place. Hon. Members on both sides of the House have levelled criticisms, questions and challenges at the Government regarding continuing problems with red tape and bureaucracy.
Rev. Ian Paisley: Is it not amazing that the slaughter should go ahead without any undertaking from Europe that the ban will be lifted when the cull is completed?
Mr. Foulkes: That is a very good point. I believe that we could have been granted that concession if our negotiators had applied a little more intelligence and capability. I shall return to that point later.

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The legacy of delay and dithering dates back some time. Bovine spongiform encephalopathy was identified in November 1986, Ministers were informed of it in June 1987, and in 1989 the Agriculture Committee found that the Government had reacted too slowly regarding the specified offal ban. There are many other examples of the Government's dithering, lack of urgency and complacency in dealing with the problem.
However, we must not dwell on the many mistakes of the past, but we must try to sort out the problem and help those who are suffering. The trade ban is affecting Scottish farming particularly badly, as my hon. Friends know—I consider the hon. Member for Angus, East (Mr. Welsh) to be an hon. Friend in this context at least.
Beef exports are worth £500 million to the United Kingdom, of which £120 million comes from Scotland. Much of Scottish farm production focuses on the export market and three out of four Scottish farmers are involved in beef production. Some 50,000 cattle on Scottish farms are awaiting slaughter and it will take more than a year to get rid of the backlog. We face a particularly difficult problem in Scotland and in Northern Ireland.
Slaughterhouses have also suffered badly. Many operations have ground to a halt, with workers often receiving no wages or benefits. Slaughterhouses which deal with 800,000 cattle a year and upon which many thousands of workers depend are now operating part time. For instance, in Sanquhar they are working a two or three-day week—if they are lucky.
The Ayrshire delegation emphasised the fact that the crises has caused a slump in the market for clean cattle. Cattle that were fetching 150p per kilogram before the crisis now sell for only 80p per kilogram. The tragedy and the irony is that that is less than the 85p per kilogram that is realised by cull cattle. The market has collapsed completely and that is creating tremendous problems for farmers.
The meat processing and bakery industry—which is particularly important in Ayrshire—processes 12,000 tons of beef annually and it has been hit badly by the crisis in confidence. Sales fell dramatically at the start of the crisis and sales in Scotland are now only 50 per cent. of their pre-crisis levels. Road hauliers have been similarly affected. Four out of five vehicles involved in meat transportation are off the road and 80 per cent. of lorries that transport meat are no longer working. Many companies are close to bankruptcy. A road haulage section which employs 1,500 people is losing nearly £5 million per month. The crisis cannot continue.
I have received dozens and dozens—maybe scores—of letters since the crisis began. I have had hundreds of telephone calls and meetings with farmers. Mr. Buchanan from Lendalfoot has written to me, saying:
"Our investment programme has been immediately halted, no further expenditure can be made at this time. All livestock farming enterprises are in the same position. The wheel has stopped turning!"
We must start the wheel turning again. The crisis is having a physical and a psychological effect upon the health of those affected. Another of my constituents—I will not mention his name—wrote to me, saying:
"I had to go to the doctor because I was suffering from depression, I am now on medication".
Farmers and others are also in a difficult situation financially.
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Our top priority must be the lifting of the ban. That will be achieved by reasoned argument, clever diplomacy and the proper deployment of scientific information, not by bluster, blackmail, the threat of retaliation or by a trade ban. That would only make the situation worse, as the hon. Member for North Cornwall has said.
Mr. Jon Owen Jones: My hon. Friend is making a good point on retaliation. How would it benefit farmers, especially mixed farmers, in his or anyone else's constituency to engage in threatened retaliation that affects the beef and other markets? I know from family experience that many farmers in my part of the country are farming lamb and expect to sell much of it to France. How would it help our farmers if there were a trade war with Europe on other farming produce?
Mr. Foulkes: My hon. Friend is right. Once such a trade war starts, it is a difficult to stop. It escalates and can affect many more innocent people. I am not a Euro-sceptic, but I can understand why they may be getting frustrated. To use this issue, however, to advance their Euro-scepticism is dangerous, short sighted, selfish and irresponsible.
Mr. Andrew Welsh: Does the hon. Gentleman agree that the priority is to breach the blanket European ban, whether on gelatine or tallow? I notice that the veterinary committee has adjourned until Monday: it wants more detail. The breach, however, must take place, whether on those items or on specialist herds from Northern Ireland or Scotland. We must breach that blanket ban as part of a step-by-step approach to getting the whole industry on the move. It does not matter where it comes. We must get that first breach.
Mr. Foulkes: I agree with the hon. Gentleman and I think that he agrees that it should be done by argument, by scientific information, by diplomacy and by political pressure, but not by threats.
Every week we read in the press that the Minister hopes that the ban will be lifted and then it never is. That also creates problems. The false expectations that the Minister raises are unhelpful; almost as unhelpful as when he said, in the first weekend of the crisis, that 4 million cattle would have to be slaughtered. He is part of the problem, not part of the solution. More hon. Members should realise that. They may not do so soon, but they will.
Intervention must be brought into play as soon as possible. On 29 March, I wrote to the Secretary of State for Scotland proposing that on behalf of my constituents, who had made the suggestion but, six or seven weeks later, there is still no effective action. It is typical of Ministers' attitude. They pooh-pooh suggestions, saying, "We don't need to do that" and move only under intense pressure from Members of Parliament, the industry, the media and others.
As I said in an intervention, the Prime Minister promised that had he would cut red tape to speed up the process, but nothing has happened. Because of technicalities, farmers have huge problems getting cattle into disposal. They travel hundreds of miles and find that they cannot get cattle even into intervention because of a small technicality. That red tape must be familiar to hon. Members representing rural areas. Farmers in my constituency complain to me about not just that, but many other matters. The red tape is no better—in fact, it is worse—in this instance.

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Even worse is that only 50,000 tonnes have been allowed for intervention for the whole European Union. It is wrong and a scandal—I say this not to attack the Germans, but to advance my argument—that 25,000 of those tonnes should go to Germany and only 1,200 to 1,500 should go to the United Kingdom. The scheme was designed to discourage intervention and to reduce the beef mountain—that was part of the strategy. That is not appropriate for the current bovine spongiform encephalopathy crisis.
Mr. Garnier: Did I hear the hon. Gentleman correctly? Did he say 1,200 to 1,500 tonnes to Britain or did he mean 12,000 to 15,000 tonnes?
Mr. Foulkes: No. I am glad that the hon. and learned Gentleman has said that because, when I met a delegation of farmers, they said that the figure was 1,200 to 1,500. I said, "Surely you mean 12,000 to 15,000" and they said no. That was astonishing. That was a helpful intervention. The hon. Gentleman usually is most helpful.
Mr. Garnier: Yes, I am. Is it not the case that 1,500 tonnes were taken in the last bidding round?
Mr. Foulkes: No. I ask my hon. Friends perhaps to confirm that, but that is certainly my understanding of the position.
I do not want to go on too long. I have already made the case on behalf of my constituents, who are suffering. Now is the time for swift action to deal with the crisis, which demands not the Government's sluggardly attitude, but the most positive action. Today, the delegation from the National Farmers Union for Scotland said that the Prime Minister must take action. I hope that, when he talks to President Chirac today, he will, on every occasion, try to persuade and to use arguments to achieve some movement on the ban.
Although short-term measures are important—and I have been arguing for immediate measures—we need a long-term strategy. While we are dealing with this crisis, we must not forget that strategy. It is about time, to use one of the Minister of Agriculture's phrases earlier, that Ministers started to work with the grain. The prickly, tetchy approach that the Minister takes from time to time does not give confidence. It is only if we have that confidence and if there is confidence in the Minister that the industry will recover. To be honest, that confidence will come first only with a change of Minister, but finally only with a change of Government.
6.25 pm
Rev. Ian Paisley: We are discussing a matter that is of grave concern to the farming community throughout this United Kingdom, but it is of greater concern to the parts of the United Kingdom that depend on agriculture and on the employment that flows from agriculture. The Northern Ireland economy is agriculturally based. Agriculture is the largest employer. Agriculture-fed ancillary industries are by far the largest industries in Northern Ireland. Therefore, if our agriculture economy is flawed, fractured and broken, Northern Ireland's whole economy will break down completely.
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It is amazing that parts of this United Kingdom are a step ahead of all Europe in relation to preventing bovine spongiform encephalopathy and its spread. I met the European Union Agriculture Commissioner with two colleagues from Northern Ireland and with farming industry representatives. We asked him: "What would Northern Ireland have to do to come up to the standard prevalent throughout the rest of the European Union?" His answer was interesting. He said, "You have nothing to do because parts of Europe are not as far forward as Northern Ireland or parts of Scotland." The European Union Agriculture Commissioner was admitting that parts of the United Kingdom are further ahead in taking good and effective steps against BSE.
What do we do to get the ban lifted? I agree with the intervention by the hon. Member for Angus, East (Mr. Welsh), who said that we must breach the ban in some way. This is the way in which we can breach it. We are not going to achieve a wholesale lifting of the ban.
In regard to the rendering of certain products, today, the European Union has not lifted the ban and it is going back for more information tomorrow. So we should work on those parts of our country that have a good reputation and are further ahead than even parts of the European Union.
Groups from Europe came to look at parts of the United Kingdom. When they returned, they reported that there was no doubt that Northern Ireland, parts of Scotland and parts of England were well ahead in the matter. Why cannot we start with those parts? Why cannot the Government say that we should lift the ban in such parts? That is what happened with swine fever in Germany.
There is a European law about such action, which we put before the Commissioner. One of their own laws states that a line can be drawn around any area of any country where there is animal disease. If that were done, areas where the disease is not prevalent could proceed. Why cannot that be done now in the United Kingdom? That is where the pressure must be exerted. It is blatantly unfair that parts of the United Kingdom, which, as I have said, even the Commissioner admits are ahead of parts of Europe, should be held to ransom until it is possible to lift the entire ban. The House and the Government should be concentrating on that.
We in Northern Ireland are very disappointed that we do not even have the help of the Secretary of State for Northern Ireland. He makes pleasing speeches and tells the farmers how good they are, but when it comes to something practical to save our economy, he says that it cannot be done and that we must all hang together. I do not want to be anti-English, for I am not anti-English, but I must say that if the whole of England had an advantage over Scotland, Wales and Northern Ireland, all the Englishmen would be on their feet asking to be allowed to use it, and more power to them. When I was elected to the House 26 years ago, I was told, "You know, Ian, this is an English House of Commons." I have learned that through the years.
There is a way in which to get rid of the ban. As the hon. Member for Angus, East said, we should breach the ban. We would then be able to progress bit by bit. Even if we got back to where we were before, we would have to make up a lot of leeway. If the ban were lifted today, it would not mean that our agriculture would be back on the road, that all the people who have become unemployed would be re-employed or that all the people

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who have gone out of business would have some chance again. Our agriculture enterprises are in a sorry and sad state today.
I was not satisfied with the Minister's reply to my point that Northern Ireland had cold storage available. It could be opened tomorrow. Why cannot we therefore go ahead, slaughter the beasts and put them into cold storage immediately? Why must we wait for six weeks until all the United Kingdom can take part in the scheme? Every place in the United Kingdom that has cold storage should make it available now. Will the Minister assure me that when I go back to Northern Ireland I will be able to say that the scheme can go ahead?
What about the beasts being fattened on farms? Farmers know that the beasts are worth nothing to them, yet they have to feed and take care of them. The farmers in my constituency have rung an emergency line, but they have been told that their beasts cannot possibly be killed and that it is not known when they can be killed. There will be 40,000 cattle slaughtered in Northern Ireland under the scheme, but that number cannot be handled. Certainly, the renderers in Northern Ireland cannot handle that number because we are short of such facilities. What do we do?
I understand that the Northern Ireland Office has tried to find out whether the beasts could be rendered in some part of Europe. They were to be sent to Denmark for rendering, but that was not possible. We are in an impossible situation. The only way that I can see out of it is to slaughter the beasts, put the carcases into cold storage and deal with them when the renderers are available. Farmers who have lobbied the House today and farmers from other parts of the United Kingdom to whom I have talked say the same: "Open the cold storage and slaughter the beasts."
I want to make a plea about intervention, which has already been raised. Why cannot we have a larger intervention scheme? Why cannot the young bulls that are not allowed to be included in intervention be dealt with? The farmers are asking for all that. With all due respect to my former colleague in the European Parliament, the hon. Member for West Dorset (Sir J. Spicer), farmers do not want to receive a personal letter. They do not want any communication but that which says, "Bring your beast. It will be slaughtered. You will get your payment for it." They do not want any red tape; they want action. They are not asking for what cannot be done. Such action could be taken.
The Minister must get a move on. The crisis did not happen yesterday. It is going on and on and we should ask ourselves how much headway we have made. We have made certain headway, which is welcome. We welcome everything that has helped the farmers, but we have reached a logjam, and in some way it must be broken.
Mr. Cash: Would the hon. Gentleman like to know that it has just been announced that the veterinary standing committee has turned us down? Does he agree that the logjam to which he has just referred is absolutely outrageous and that the Government must take sufficient action, including the suspension of payments? [Interruption.] It is all very well for Opposition Members to chunter on, but they are doing absolutely nothing to improve the position.
Rev. Ian Paisley: We have already heard that and I have already commented on it. I am sorry that the hon. Gentleman was not present when I did so.
The parts of the United Kingdom that the commissioner admits are ahead of the rest of the European Union must breach the ban. We will not lift a blanket ban. Anybody who thinks that some day we will wake up and the entire ban will be lifted is wrong. It will not happen that way. We should use what brain power God has given us to try to achieve a breach.
I attended a meeting over which Lord Plumb, a colleague of the hon. Member for West Dorset, presided. It was an anti-Scottish, anti-Welsh and anti-Northern Ireland meeting. It was to tell Europe that we are all standing together. Some of my friends from other countries in Europe said that if Lord Plumb carried on like that the ban would never be lifted. But if we identified parts of the United Kingdom that have done everything that they have been asked to do and are even ahead of parts of Europe, and we argued that under the European law we are entitled to breach the ban, we would go forward.
Mr. Welsh: Given the hon. Gentleman's experience in Europe, does he not think that the heart of the problem is that the Government simply do not know how to negotiate in Europe? If they negotiated properly, they would achieve exactly what he is setting out.
Rev. Ian Paisley: The hon. Gentleman knows that I am not a European sceptic—I am anti-Europe and fight my seat on that issue. I believe that when one is in Europe one needs to learn how to milk the cow and get the cream, even if the cow is killed afterwards. All I am saying is that I have learned that Europe does what one asks it to do and then one can do anything.
Does any hon. Member believe that all the member states of the European Union dot the i's and stroke the t's of European law? Not one does, but they say that they do. It is time that the British Government were like Nelson and turned a blind eye to certain things and sailed to victory. That is where we have failed. If we breach the ban, we will move forward.
Arguments about tallow and other things are insignificant when our agricultural industry is going down the road to total ruin.
What do we say to the lorry man who says, "I have built up my business in transporting carcase meat, and now it is all over. I am finished. I started with one lorry; I now have 20 lorries on the road. I gave employment to 20 people—all sacked, with no compensation and no nothing"? Those are the people we should be thinking about, and the only way that we can help them is to get this ban lifted.
I ask the Minister: please, do something about the current logjam. The Government do not need to ask Europe about some matters—they can take action now. Hon. Members have today mentioned people who have been able to sell their meat, but they are selling it at a loss. They have lost. The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) mentioned some prices that have been paid, and the people selling have made a loss. Those people must be taken into consideration because they are running their businesses at a loss, and it will catch up with them.

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The Government must take in hand all these matters. The House, farmers and the people of the United Kingdom are looking for action, and they must have it. The Government can delay no longer.
6.40 pm
Mr. Paul Tyler: The hon. Member for North Antrim (Rev. Ian Paisley) will be surprised to hear that I am delighted to follow him—because I am not an Englishman, I am a Cornishman. I have at least that sense of identity to share. I also share very much his sense of the devastation that has been caused to the rural economy, to the rural community and to a huge number of totally innocent people. People have lost their jobs and livelihoods through absolutely no fault of their own. That is true in every part the United Kingdom.
I agree very much with what the hon. Member for North Antrim said in his concluding remarks, about the need to remove some of the blockages, which is a matter that is entirely in the hands of the Agriculture Minister. Clearing them does not depend on negotiations in Brussels or anywhere else on the continent, but on the Minister and his team. The very positive debate that we had on Monday—some hon. Members who were present for it are in the Chamber today—showed not only a recognition by Back Benchers on both sides of the House but an explicit acknowledgement by the Minister of State that he holds in his hands the power to remove some of the worst problems that now face the industry.
In that debate, one or two hon. Members seemed to be under the illusion that all the problems had been resolved or that they could all be put down to some wicked Eurocrats across the water. I think that it would be appropriate if I were to read for their benefit the brief that has been given to Conservative Members for the south-west in preparation for today's National Farmers Union lobby. They were urged to
"ram home just how chaotic and frustrating the present situation is, and the need for the Government to get it sorted quickly."
As the hon. Member for North Antrim said, it is a question of "action this day", and we have already had 56 days too many since the announcement that precipitated the crisis.
To be fair, the Minister of State acknowledged his responsibility and took great trouble to try to respond to the many concerns expressed on both sides of the House on Monday. I am particularly disappointed that the hon. Members for Macclesfield (Mr. Winterton), for Newark (Mr. Alexander), for Taunton (Mr. Nicholson) and for St. Ives (Mr. Harris) are not in the Chamber now, because I think that they would repeat the criticisms of the Minister's handling of the cattle disposal scheme, which have been expressed again in this debate.
The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) and the hon. Member for North Antrim are entirely right: the industry has been devastated and, with it, great tranches of employment have been wiped out. Many of those businesses will find it extremely difficult to recover.
While it is true, as hon. Members have said, that the export ban is of critical importance, and although I endorse the view that we have to seek step by step to have it removed, it is also true that the activities of our own Minister and our own Government can wipe out so much of that great industry if we are not very careful. If and
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when the ban is removed, a great deal of the industry will simply no longer exist to take advantage of the export potential that will be reopened to us. That is especially true of Scotland and Northern Ireland, which have—we must admit it—been one step ahead in this matter. I shall come back to that point later in my speech.
I am glad that the Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food, the hon. Member for Tiverton (Mrs. Browning) is in the Chamber. I hope that she will not, as she did on Monday, adopt a tone of aggressive personal attack, because there is across the Floor of the House a sensibility of the severity with which this problem has hit the rural community. It was not appropriate to spend precious moments on ill-directed and inaccurate personal attack.
There were two points on Monday might which were not addressed, and I therefore make no apology for raising them now. In her reply to Monday's debate, the Minister made no reference to the questions raised on both sides of the House as to whether any sort of contingency plan had been in place in the Ministry. As hon. Members have said in this debate, even if no such plan was in preparation before last November, the scare that happened in that month made it quite clear that, sooner or later, we might face this problem. If that is true, it was a scandal to have no contingency plan in place to deal with rendering capacity, for example.
I hope that the Minister will tell us in her reply whether there was a plan, whether the plan that we now have is it, and, if so, why it is not working. I hope that she will also tell us why the Minister of State initially said that he had the renderers' complete co-operation, bearing it in mind that, as I understand it, some 90 per cent. of the total rendering capacity belongs to the same commercial group of companies. There were not many people to deal with, yet, when it came to the crunch last week, we found that the 70-odd abattoirs that apparently had arrangements with the Ministry, the intervention board and the Meat and Livestock Commission were found not to have the renderers' agreement. The number of abattoirs therefore dropped at the weekend to 21 and, as I told the Agriculture Minister in my intervention, I have today been informed that not even those 21 have clearance from the renderers.
It is totally unsatisfactory that in this type of crisis Her Majesty's Government appear to be beholden to a commercial interest of that nature and to be held over a barrel.
In the debate on Monday, the Minister gave no indication whether the concerns expressed by hon. Members on both sides of the House—by the hon. Members who represent rural areas—about the proposal for a selective slaughter policy, in addition to the 30-month cattle disposal scheme, had been brought to any sort of fruition and whether they had been discussed in full with the industry or with the European Commission.
It is of critical importance to recognise that the 30-month scheme is a non-selective scheme. It is indiscriminate by its very nature, which is one of its problems. We want to have a mature beef assurance scheme so that cattle that mature later can be exempted and maintained for the purposes for which they are intended—they are, of course, particularly good for the prime beef market.
Mr. Ian Bruce: I am always rather confused by Liberal Democrats who say they do not believe in personal attack

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and then go on straight in and make a personal attack. I wonder whether the hon. Gentleman would like to put straight the record on his speech on Monday, when he accused the Government of choosing the 30-month scheme rather than saying that the Government were responding to a scheme proposed by the food industry and the NFU?
Mr. Tyler: I am grateful to the hon. Gentleman for asking that question. If he will read my speech, he will find that I explicitly answered that point, which has also been referred to in this debate by the hon. Member for Carrick, Cumnock and Doon Valley.
In a television interview on the Sunday before the NFU presented its proposals, the Agriculture Minister referred not only to the possibility of a mass slaughter scheme—he mentioned millions, as the hon. Member for Carrick, Cumnock and Doon Valley said—but to the possibility of a slaughter based on 30 months. Up to that point, there had been no mention of a slaughter policy based on 30 months. The Spongiform Encephalopathy Advisory Committee's recommendations were based on the suggestion that deboning should take place for cattle of more than 30 months, which is quite different. That is not a massive slaughter.
Mr. Bruce: What about the NFU?
Mr. Tyler: If the hon. Gentleman will read my speech—[Interruption.] No; the hon. Gentleman clearly cannot read. I reported accurately the catalogue of events. On the Sunday, the Agriculture Minister made his statement on television. On the Monday, the Minister met the NFU, as did I and my right hon. Friend the Member for Yeovil (Mr. Ashdown). That proposal was presented after the Minister had already floated the idea. So the Minister first introduced that suggestion into the public domain.
If there is going to be an additional and selective cull, there are three absolutely essential preconditions. First, that cull must be firmly rooted in the scientific advice on which the Government are claiming to act. It must therefore be related to identification of any possibility, or scintilla of possibility, as the Minister of State has said, of exposure to potentially contaminated feed. That must require a means of ensuring traceability and a national registration scheme. As the hon. Member for North Antrim has rightly said, Northern Ireland may be one step ahead, and we will have to introduce such a scheme area by area. It is also true that some parts of Scotland are further advanced in the introduction of such a scheme. Hence the importance of the questions that I have asked in recent weeks about the possibility of animal-to-animal or maternal transmission. If that is even a minor route for infection, we must have a policy to deal with it; otherwise the scientific base collapses.
Whether that cull is to cover the rumoured 40,000 cattle or more, the Government must certainly insist on selection according to proven risk. They should not operate some haphazard or random scheme.
The second precondition is that the cull must be accompanied by a cast-iron guarantee of full European Union compensation. As we know, the present scheme triggers just 30 per cent. in net terms, as a result of rebate arrangements negotiated by the former Prime Minister,
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now Lady Thatcher. That means that the cull would not result in British farmers receiving 60 per cent. or even 70 per cent. compensation, as has been suggested. If we are to have a selective cull, and if it is to apply across Europe, we cannot be the one country in the Union that receives less compensation for our farmers than that offered to others. They must be given 100 per cent. financial support.
The third essential precondition is that such a cull must lead to immediate agreement in the Council of Agriculture Ministers on a timetable for the removal of the export ban. I accept, as other hon. Members have suggested, that its introduction may take some time, but it must be a precondition of any agreement to an additional cull. As several hon. Members have rightly said, that agreement will take place at Government level in the Council of Ministers. The support for such an agreement is already evident from what the Minister has said and what many others have heard from the Commission.
Mr. Jon Owen Jones: Could the hon. Gentleman explain to the House and to me in particular how some of those preconditions can be met according to anything like a realistic timetable when, as far as I am aware, the medical and veterinary knowledge is such that risk assessments cannot be made? I agree that those preconditions are desirable, but I cannot see how they are achievable according to anything like a reasonable time scale.
Mr. Tyler: The hon. Gentleman will have to wait for the Minister's reply, because she and the Minister have said on a number of occasions that the veterinary committee basically accepts the thesis on which we have operated. If the scientific judgment is that we are correct, it follows that it will be possible to agree a timetable. I do not suggest that agreement on immediate removal of the export ban is probable, but a timetable towards that end is not an unrealistic expectation.
Sir Michael Spicer: I am not sure whether the hon. Gentleman has heard the latest news [HON. MEMBERS: "Yes, we have."] Well, it seems that everyone has heard it. Surely that news cast some doubt on the hon. Gentleman's arguments and those advanced by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). They have argued that quiet diplomacy should be adopted and that agreement should be reached according to rational scientific argument. The scientific committee has specifically turned down a request for such an agreement, when there is manifestly no scientific reason for doing so. Surely that goes against their argument.
Mr. Tyler: The hon. Gentleman has obviously not been listening to the debate, but I have, and because of that I have not heard the precise details of the latest news. As I understand it, however, the veterinary standing committee has adjourned its discussions until Monday to await some further information. It has not turned down the application. The Minister can confirm that later.
I hope that we all agree that the existence and our membership of the EU institutions makes possible an orderly progress towards lifting the export ban. Imagine how long it would take in bilateral negotiations to remove a ban when 40-odd countries hold it against us? I hope that the Minister will comment on the decision-making process that would be necessary were that to be the case.

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Suppose, for example, that we had to have one-to-one discussions with the 25 countries that banned the import of British beef before 20 March, let alone the 25 countries outside Europe which have adopted that ban since that date. That makes a total of over 60 countries, including those in the European Union. If we were not actively party to the decision-making process of the European Union we would have to enter into bilateral discussions with all those countries, which would be quite impossible.
Such matters are usually dealt with by consensus and, in extremis, by qualified majority voting. If we were dependent on a veto in those discussions in Europe before we could make any process, we would be in even greater difficulty.
The farming community is looking for some clear indication of where we are going. It needs to know the target and where is the light at the end of the tunnel. The farmers from all over Britain who lobbied us today are desperate about the way in which their industry has been devastated by recent events. Of course, it was badly affected by the original announcement, but even more so by the eight weeks of dither and delay as Ministers have sought to get a grip on what has happened. Those farmers need to know about some targets. For example, will it be possible to give a date after which no animal can be expected ever to have been exposed to contaminated feed? Perhaps that would mean an animal born after 1 April this year, or even 1 July this year. Such an announcement would mean that farmers could see an end to their problems.
One west country farmer said to me this afternoon that he felt that "We are plagued with cows that won't sell, grass that won't grow and a Government that won't do its job."
Normally, I would wish to speak at some length about reform of the common agricultural policy, but I know that many hon. Members wish to speak, and those comments will have to wait for another day.
It is clear that most hon. Members accept that it is the Government who must take the lead to remove the burden of devastation that lies across the land at the moment. That cannot wait for decisions to be made elsewhere, nor does it have to wait for such decisions. On Monday night the Minister of State was good enough to acknowledge that. I hope that hon. Members on both sides of the House recognise that it is in their hands to release that burden from people who simply do not deserve to have it thrust upon them.
Mr. Douglas Hogg: On a point of order, Madam Speaker. It may be for the convenience of the House to know that the standing veterinary committee has suspended until Monday. Good progress has been made today. I am grateful to the Commission for its proposal to lift the ban on gelatine, tallow and semen. I am also grateful to President Chirac and the French Government for their help. A number of other member states have now indicated their support. Some technical issues need further clarification, and I hope that the Commission's proposal can be adopted on Monday.
Dr. Strang: Further to that point of order, Madam Speaker. We are grateful to the right hon. and learned Gentleman for providing us with that information. It must be a considerable disappointment that the Commission's recommendation, albeit modest, was not even voted upon today. Does he agree with the Opposition that it is vital that
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at the meetings of the Council of Agriculture Ministers and the standing veterinary committee, which are to be resumed next week, we should get a clear demonstration of progress from the European Union, because we must get the overall ban lifted? We are merely talking about three products, which represent a minority of jobs.
Several hon. Members rose—
Madam Speaker: Order. I cannot allow a debate on a point of order, but I know that those on the Government Front Bench will have heard the request from the Opposition spokesman, and no doubt those matters can be dealt with in the wind-up speeches or in tomorrow's debate.
6.58 pm
Sir Michael Spicer: I cannot resist making a brief comment on that announcement from my right hon. and learned Friend the Minister of Agriculture because it seems extraordinary that even the modest proposals of the Commission, which are supported with scientific argument, do not find a ready acceptance in a scientific committee. It has been suggested by several Opposition Members that the argument should be conducted solely on the grounds of science, yet one suspects that politics is playing a greater part than one might, at first glance, have imagined. It is clearly a disappointment and I hope that the matter will be put right speedily on Monday.
The hon. Member for North Cornwall (Mr. Tyler) said that he did not intend to talk much about the future of the common agricultural policy. I hope that the House will forgive me if in my brief remarks I speak about almost nothing else. My right hon. and learned Friend the Minister for Agriculture was right to begin by saying that one cannot talk about the agriculture industry without talking about the CAP. That is true not only in general but in the specific context of the crisis in the beef sector.
My right hon. and learned Friend also said that there is a need for urgent reform of the CAP. In saying that, he followed in the footsteps of Minister after Minister over the past 20 years. I have to absolve the Labour party from that charge because it would seem from the speech of the hon. Member for Edinburgh, East (Dr. Strang)—perhaps there will be other official speeches on the matter from the Labour party—that it is not concerned about reform of the CAP, which he did not mention. That must call into question Labour's motives, and the validity of its arguments, in calling for a vote at the end of this debate. If the Opposition have no alternatives to suggest for the future of agriculture, what would we be voting on? That is a phoney position that does them no good, but it is one to which we have become used. They have no alternative to offer to the CAP. Several Opposition Members have talked about strategy and generalities but nothing specific has been forthcoming. I suspect that they would not want to reform the CAP because they would want more of it—more centralisation, more protectionism and more taxpayers' money. That is the meaning of socialism, especially in economic and agricultural affairs.
My right hon. and learned Friend the Minister said that he wanted agricultural protection decoupled from production. He wanted a market-driven system and he wanted the argument that the status quo is not sustainable

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to be accepted. However, the status quo is precisely what we have got in the form of the appalling waste in our agricultural industry and the bizarre fact that we have fields that people are paid not to produce food in. Sometimes we have mountains or lakes of food, but, as my hon. Friend the Member for West Dorset (Sir J. Spicer) said, on other occasions we have shortages. We have quotas that distort the position and intolerable waste that costs our taxpayers an increasing amount. The cost is running at about £6 billion a year on the agriculture industry alone, £2 billion of which is paid by our taxpayers to support not our industry but those of other countries. So much for changing the status quo.
If we consider how the status quo has evolved in the past two or three years, it is clear that the situation for the consumer is also intolerable. Every man, woman and child in this country effectively pays £250 per year more in food prices than they would have to were they able to benefit from world prices for agricultural produce. That is not just bad for the taxpayer and the consumer, but for the producer.
Hon. Members who represent agricultural constituencies and meet their National Farmers Union representatives regularly know that they believe that that situation is not sustainable. The agriculture industry rightly calls for security so that it can plan future production. If it has to plan production on the basis of gross distortions and massive injections of public funds—especially those going into other countries' pockets—and with consumers having to pay vastly too much because of the food mountains and set-aside fields it cannot be good for the long-term stability of British agriculture and production.
There are two basic problems with the CAP that must be addressed. First, we cannot for ever continue to run an industry by intervening in its price structure unless we are prepared to accept permanent distortions between supply and demand. There must be a better way to support agriculture, if that is what we want to do, than by interfering with the price mechanism, which inevitably causes distortions in supply and demand. It is the intervention in the price system that causes the great problems on the international front. It is not only that the industry is suffering domestically as I have described; there are vast international repercussions from the way in which it is being run.
A distorted, protectionist industry of the sort thrown up by the CAP is very bad for the developing world. The enormous tariffs of the CAP are often ignored. We have to pay twice as much for, say, New Zealand butter inside the boundaries of the CAP as we would if we were able to buy it at its genuine market price. That factor applies across the board to goods produced by developing countries. The CAP is bad for the poorer countries and for the rest of the world.
Tariffs are a serious problem. Much of the revenue that comes into the coffers of the European Union is dependent on moneys drawn from the tariffs. About a quarter of all moneys that come to the Union are derived from tariffs. The EU therefore has a vested interest, quite apart from its interest in protectionism, in maintaining a tariff structure around its agricultural production. That is one reason why the EU argues in the councils of the world, especially in GATT but also in the World Trade
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Organisation, for protectionism. The EU is one of the last bastions of protectionism—that was certainly true during the Uruguay round—because it is motivated not only by the philosophy of protectionism but by the revenues derived from it.
Mention has been made of the effects of the CAP on EU enlargement. My right hon. and learned Friend the Minister argued that enlargement to include the east European countries that desperately depend on getting their products into a protectionist Europe would have implications for reforming the CAP. One could argue that point the other way round by saying that one reason why Europe is so slow to allow those countries to join is precisely because of its fear that the CAP will be fundamentally affected. Of course, under the present way of doing things, it would.
The price distorting element is one major problem of the CAP, another is its pooling nature. Why should Britain put money into a central coffer when one third of it—£2 billion—is taken out to pay other countries for which we as politicians representing our constituencies in this Parliament have no responsibility? Why should 85 per cent.—once one has taken into account the rebate lost—of all the moneys that the European Union kindly allows us in the case of the BSE crisis come from our own taxpayers? Why should we go through the process of cycling money through a bureaucracy, wasting it as we go along, in order simply to fulfil the requirements of the CAP?
It was pointed out earlier that common policies applied in different circumstances have different effects. The milk quota is a good example. The common policy on milk quotas had a different effect in Italy from in Britain where, from time to time, it has been extremely detrimental. We must deal with those two specific problems: price distortion and common pooling.
If we are to support agriculture—I suspect that it would be a common position in the House that British agriculture in many of its facets requires taxpayers' support—we should do so directly rather than through the price mechanism. That is the kind of reform that is needed.
Secondly, if taxpayers' money is to be used, the House of Commons and the British Government, and the Governments of other countries, must have a greater impact on the decisions about how that money is to be raised and spent. I cannot see how one can avoid, particularly in the context of spreading to eastern Europe, eventually returning to some system of national control over agricultural spending within an agricultural policy.
The frustration expressed on both sides of the House about the present system and the present beef crisis comes about largely because we have no real power. Different hon. Members have spoken about different ways of dealing with the matter. One hon. Member says we should be rational, another that we should be much tougher and another that we should use retaliatory measures. All have the common theme that we are dealing with a power which is outside our control. We are not even sure about the extent of our influence. Even when it comes to scientific arguments we are not sure whether we will have any influence. We shall be waiting over the weekend to see whether rational arguments will work on that limited front. However, we do know that the ultimate decisions are not being taken as a direct response to our views and the votes of the House. They do not count. That is why there is no point in having a vote on the matter.

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If we are really concerned about our constituents and our agriculture industry there must at some point be a recognition that we must regain some greater say, some greater influence, in the direct expenditures that we make or do not make—as we decide—on our agriculture industry. That will be good for our consumers, taxpayers and, above all, our agriculture industry.
7.12 pm
Mr. Alan W. Williams: I want to make a few comments on the effects of BSE in my constituency. I have a rural seat, which is relatively sparsely populated. I claim to have more farmers in my constituency that any other Labour Member, and probably more than any Conservative Member as well. Farms in Wales are generally small family farms, and are, in my area, because of the grasslands, dairy, beef and lamb. Therefore, the crisis that has unfolded in the past few weeks has hit my constituency as badly as any. The livelihoods of individual farmers are at risk. They do not know what has hit them, and they cannot see any quick way out of the problems.
In addition, the crisis has had knock-on effects for farm suppliers, whether of feedstuffs, fertilisers, tractors, or cars. There is a substantial multiplier effect. A couple of weeks ago, I visited a factory in my constituency which makes sheds for farmers and constructs them throughout England, Wales and Scotland. Before the crisis, it had a good order book and employed 55 people who worked masses of overtime, each worker working 50 or 60 hours a week. It has had to make several of its staff redundant because of order cancellations, and is down to 40 staff and no overtime, and, effectively, down to half its previous turnover.
The first key point to make about the crisis is that the farmers themselves are not to blame. I am convinced that it is due to the animal feedstuffs. Back in 1989, I read the Southwood report and went through the alternative hypotheses. Like Professor Southwood, I was persuaded that contaminated feed is the primary cause of BSE.
The responsibility for that lies with the Government, who, in 1980, deregulated the animal feed industry, allowing lower temperatures and the scrapie virus thus to be transformed into BSE. It has come as a deep shock to consumers that animal feed contains recycled dead animals, chicken manure and such products. That is part of the consumer boycott.
This morning, I read a press release dated 9 May about animal feed contents which the NFU in Wales sent to all Members of Parliament this week. It says:
"The NFU has long held the belief that animal feed contents should be freely available to farmers when making purchasing decisions. We have been both disappointed and angry that Government refused to introduced a statutory declaration of contents when pressed by the NFU in the mid-1980's—the tragic consequences of this inaction are now all too apparent."
Farmers, in buying their animal feed, cannot check what is in it, and the Government refuse to introduce the necessary legislation. Therefore, farmers are not guilty of the awful crisis that has come upon the industry, so they deserve full and proper compensation for the huge losses that they are now incurring.
Mr. Ian Bruce: Has the hon. Gentleman seen the announcement from the United Kingdom Agricultural
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Supply Trade Association that, at long last, it has decided to do what any sensible person would do, which is to publish what it is putting into the feed? Surely that is the responsibility of that organisation and the feed manufacturers, rather than the Government by regulation.
Mr. Williams: I should be delighted if all animal feed manufacturers did that voluntarily. But if we go back to the farmers and the NFU, the pressure was there 10 years ago to introduce exactly what now may be happening voluntarily.
During the past four or five weeks, I have been appalled by the way in which blame for the crisis has been directed more and more at the European Community, as if it were a European problem. BSE is very much a British invention and a British disease—indeed, it is a Conservative Government disease. The Government's figures for the incidence of BSE worldwide show that the total number of cases in Britain is 161,663, while the total for the rest of the world is 383—a difference of a factor of 400. Switzerland has 205 cases because it imported animal feeding stuffs made in Britain in the 1980s. All the other figures are very small. France has 13 cases, Germany has four and Italy has two. We keep hearing the appalling untruth that other European countries have BSE. They do, but a tiny number of cases. We have 161,000 cases—it is a British problem.
Today, we have been lobbied by some 300 farmers from all across Britain, who have been organised by the NFU. Some 30 or 40 of those farmers came from Wales. I wish to remind the House of something that happened in Milan last Wednesday which was under-reported. The BBC "Nine o'clock News" broadcast a report of a demonstration by 150,000 farmers in Milan—that shows their feelings about the crisis.
There has been a 50 per cent. fall in demand for Italian beef in the Italian market, and no compensation has been paid to farmers. Italy has had two cases of BSE, both in cattle imported from Britain. We try to blame Italy and Germany for our problems, but we have created problems for them. We should go to the European Union negotiations in Brussels with an air of great humility, contrition and remorse. It is our problem—we have devastated the European beef market, as well as causing great problems in our own.
There is no quick solution to the problem, and I have been appalled by the talk in the House of the possibility of retaliatory action. That will only multiply the crisis. We cannot simply ban European, Argentine or American beef because of alleged hormones in it. I find it contradictory that the very people who are advocating such a course of action are, at the same time, advocating taking on the European Union in the European Court and challenging the legality of the ban. We should not up the stakes.
My hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) said today that we must sit at the table—for weeks on end, if need be—with our European partners and go through the scientific evidence that SEAC has studied with other countries' veterinary experts and Health Ministers. If it takes six weeks or six months to lift the ban, so be it. We must move forward by way of civilised discussions and rational consideration, and human health must be the priority.
Our European colleagues have made it clear that, if the ban is to be lifted, we must show that we have a series of measures aimed at eradicating BSE. That should have

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been our aim in 1986 when the disease was discovered. Had the Government followed the course pressed upon them by my hon. Friends the Members for South Shields (Dr. Clark) and for Caerphilly (Mr. Davies)—who is in his place—and by other Opposition Members during the debates in 1988, 1990 and 1991, we would not be in this appalling mess now.
There is now general agreement about the culling of dairy cows as they end their economic lives, as it is older animals that contract BSE. Taking them out of the food chain is a rational and sensible first step. This afternoon, those of us who met the farmers—I am sorry that the Minister did not take part—were made aware of the chaos in the few weeks following the introduction of the culling scheme. I was told that, in Wales, it is only in the past four or five days that any kind of slaughter has take place, and the figure is now up to about 90 a day. There are only two abattoirs involved, and there are no rendering facilities in Wales.
I am not clear what will happen to the carcases following the slaughter. Some 20,000 cattle a week are to be slaughtered, but, in an article in Farming News on 2 April, a spokesman for the Meat and Livestock Commission said:
"At present, we only have capacity for 2,000 a week."
What will happen to the carcases? That is a real problem, and it appears again that the Government have not thought it through. We must expand the cold storage capacity, but that is a temporary measure. Although it allows slaughter to take place, it does not affect the final disposal of the carcases. One of my concerns is that the Government will simply introduce landfill, and the farming community certainly does not want that. There could well be serious environmental problems if that was done.
I was told by farmers today that, following the chaos of the past two or three weeks, the stories that appeared in the press have carried to Europe, and have provided no help in terms of lifting the European ban. Our infrastructure and style of government are so appallingly inept that problems and bottlenecks are created. Unless we show that we can govern this country responsibly and achieve what we set out to achieve, no one will have confidence that our beef is of a high quality.
The Minister went to Brussels on 15 April to propose the slaughter of 40,000 selected animals—it is not clear how those animals most at risk were to be identified. But the right hon. and learned Gentleman's proposal was turned down as inadequate. Some 40,000 out of a livestock of 12 million cattle amounts to one third of 1 per cent., and we will not convince Europe by offering one third of 1 per cent. of our cattle for sacrifice.
I hope that the Government are working on a selected slaughter policy in close consultation with our European partners. But in France, Ireland, Italy and Germany, when a case of BSE is confirmed, the whole herd is slaughtered. I would not advocate that, as it would mean that 90 per cent. of the animals killed would be perfectly healthy. There would be appalling logistical problems and knock-on effects in other parts of the dairy industry.
It is clear that it is as urgent now as it always was to develop a test for BSE in live animals. We advocated that during the 1990 debates. Dr. Harash Narang, a Newcastle virologist, was sacked for trying to develop this very kind
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of test. I remember my hon. Friend the Member for South Shields (Dr. Clark) opening a debate in 1990 with the story of the appalling persecution of this distinguished scientist, simply for wanting to develop a test for BSE in live animals.
The Government simply did not want to know. BSE was to be swept under the carpet, but six years later it has come back to haunt us.
Dr. Harash Narang is still working on a test, and the Government have set up a small company, Electrophonetics, which is also trying to develop a test. The same goes for a company in Macclesfield. In the United States, the National Institute of Health in Maryland, near Washington, has come up with a test for CJD in live people. It is a complicated test involving a lumbar puncture. It may not be useful for cattle, but it points the way to developing a test for BSE in live animals.
If the Government were really serious about eradicating BSE—Germany, France and Italy would be—they would implement a crash programme in which, over the next three months, MAFF would sponsor every research scientist with expertise in this disease in an attempt urgently to develop a test for BSE in live animals. It could then be available by the end of the summer. All cattle could be tested, and any carrying traces of BSE could be slaughtered. After another three or six months, all animals could be re-tested, and within two or three years the disease could be eradicated.
The Government should also sponsor research into the link between BSE and CJD. Over the years, they have tried to pretend that there is no conceivable risk of any such link. The Minister for Health used the word "inconceivable" last November. It is clear now that such a guarantee should never have been given—there was always the danger of the disease jumping species. About 200 cats have died of mad cat disease, and about 20 species of animal have contracted spongiform-like illnesses from eating meat contaminated by BSE.
Until the early 1990s, such research work was a no-go area for the Government. In a parliamentary answer dated 10 May, I was informed that the budget allocated by the Department of Health and the Medical Research Council to CJD's possible links with BSE used to be less than £1 million a year. Of course, it has now been stepped up. A failure to invest more earlier has therefore resulted in a cost of £1 billion a year from now on.
We need to continue discussions of the evidence with our European partners to determine how great or trivial this risk of jumping species may be. We do not know at present.
Mr. William Ross: I thought I heard the hon. Gentleman say a few moments ago that about 20 species of animal have contracted BSE-type diseases from eating meat. Given the dangers of inaccurate language in this debate, would he care to reconsider his words? Is he referring to eating muscle, or to eating brains and other parts in which the BSE prion is found?
Mr. Williams: I am grateful for the hon. Gentleman's interruption. As soon as I had said it, I realised my inaccuracy. Some of the animals to which I referred accidentally contracted the disease by consuming whatever is in their diet of beef products; most of the

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others were in laboratories in which their brains were injected with the virus to see whether they would develop the disease.
The Southwood committee and the Labour party in 1990 advocated beginning work on the risk of primates contracting BSE, both by consuming beef and by being injected. The work, however, was never done, because the Government did not want to know.
As I say, we still do not know the extent of the risk of the disease jumping species. This morning, I carefully read a document prepared for parliamentarians by the Parliamentary Office of Science and Technology. Three or four pages of this excellent 12-page document are given over to the risk of transmitting CJD. Hysterical figures are sometimes quoted in the popular press, but this careful academic analysis offers no real conclusions or solutions, and does not tell us the size of the problem.
On 20 March, 10 cases were announced. The Observer of 28 April listed another nine cases that had come to light in the past few weeks. Last week, I asked the Government how many confirmed and suspected cases there now were. They told me of 11 confirmed cases, but chose not to give any figure for suspected cases. My feeling is that there could be 100 or even 1,000 cases in the next few years. The media have carried figures as high as 100,000. If they are true, we are entering an appalling nightmare. My belief, for what it is worth, is that hundreds will be involved. I have told farmers in my constituency to be resilient as more and more stories of cases of the new strain of CJD come to light.
If it proves, in 10 years' time, that only 1,000 people have contracted the disease, I will agree with what the Minister for Health said a few weeks ago. If he had £100 million to hand, he said, he could save far more lives than that with preventive medicine. A thousand people are not many compared with the numbers who die of lung and breast cancer and heart disease, for instance.
It appears, then, that, because of a loss of customer confidence, we have been driven to a policy of slaughtering all cattle that would otherwise have gone into the food chain at the end of their lives, and compensating farmers for that will result in a bill of £1 billion a year. The tragedy is that that money will be spent for very little health gain, and that relatively few people will ever die of CJD.
The Government's blundering ineptitude throughout the past 10 years, in ignoring the problem and not tackling it—not doing research on transmission and so on—has caused the crisis. Their ineptitude has caused the appalling crisis of confidence, the difficult relations with the European Community and so on. We are paying the price for a decade of extremely bad government. [Interruption.] If the hon. Member for Ribble Valley (Mr. Evans) wishes to intervene instead of making sedentary remarks, I shall be happy to give way.
It is very sad that the farming community—my constituents—are in deep despond as a result of a problem that should never have run out of control in the way that it has. The bills for this piece of appalling misgovernment will fall, for years, to an incoming Labour Government.
7.40 pm
Mr. Nicholas Baker: If the hon. Member for Carmarthen (Mr. Williams), who I believe is a distinguished scientist, can make a speech based on so
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little attention to the scientific evidence and containing so much mere speculation, I am not surprised that, when he asks his farmers to be resilient, they look the other way.
It is undoubted that the BSE crisis has affected the beef industry and the rural community in a way that it is hard to underestimate. Our beef producers found themselves engulfed in a forest fire. I shall say a word in a moment about why it came about.
My right hon. and learned Friend the Minister for Agriculture, Fisheries and Food and my right hon. Friend the Secretary of State for Health had no alternative but to publish the evidence of SEAC as they did, but the way in which that evidence has been used and treated by others deserves a moment's attention.
No one could seriously argue that my right hon. and learned Friend's package is not an adequate and appropriate response to the situation. It has contributed, and is contributing, to the greater confidence in British beef, the results of which we are witnessing. I am delighted to welcome Asda's decision tonight to sell British beef in its shops.
Another factor in the package was the close consultation with the National Farmers Union at all times. The suggestion that such a package could be worked out in two minutes, or even in days, is an insult to the drama and gravity of the situation and fails to recognise what our farmers face.
I do not accept that the crisis was foreseeable or that the package should have been prepared and held in a drawer in the Ministry of Agriculture, Fisheries and Food, as the hon. Member for North Cornwall (Mr. Tyler) appeared to suggest. Had such a package been prepared, the criticism that sinister moves were afoot, that full scientific evidence was being withheld by the Government and that further measures were necessary would undoubtedly have been levelled from the Opposition Benches—to some extent understandably.
The crisis was unmeasurable, and nothing that has been discussed in the debate could lead anyone to think that it was measurable or other than unpredictable and irrational, but it was magnified by three factors.
The first factor was the way in which the national media covered the matter. Like ghouls, they switched their excessive and unbalanced three pages per edition from one tragedy in Scotland to BSE, and savaged everyone involved as much as they could in search of damage resulting from the crisis. As a result of the way in which the media handled the matter, they infected their European colleagues. That led to the second factor in the crisis—the European and worldwide ban.
Mr. Gordon Prentice: Will the hon. Gentleman give way?
Mr. Baker: I shall make some progress, if I may.
The European and worldwide ban has undoubtedly had a dramatic effect on consumer confidence. I add my support to the efforts that my right hon. and learned Friend the Minister of Agriculture is making to have the ban removed. As long as there is progress in the negotiations, he is right to proceed with them.
The reasoning behind the bans is unscientific, as was the hysteria that gave rise to them. The bans have, ironically, helped bring about a drop in beef consumption

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which in many European countries is greater than in Britain. The damage to those countries' beef industries must be enormous. I welcome the progress that my right hon. and learned Friend announced earlier on the three-product ban that seems to have been made in the continuing negotiations. I hope that that mini-ban will be concluded on Monday, when we find out the result of the scientific committee's deliberations. The bans were born of hysteria, bred out of continental media by the British national media, and their removal is in the interest of all the countries concerned.
The third man—or, dare I say it, woman—among the factors contributing to the hysteria was the hon. Member for Peckham (Ms Harman). I am sorry that the name of Peckham, which I once hoped to represent, should be tarnished in that way. I deplore the principle that political points should be scored and attacks made on the Government by attacking an institution such as our beef industry. My hon. Friend the Member for South Dorset (Mr. Bruce) reminded us of the words that were used on that occasion, which undoubtedly did much damage in the community at large and to our beef industry.
Mr. Prentice: Will the hon. Gentleman give way?
Mr. Baker: I am sorry. I know that many others wish to speak, and I do not want to be distracted at the moment.
My hon. Friend the Minister of State is playing a directing part through his daily industry meetings, as he explained to us. He should not hesitate to bang heads together when necessary. He has no absolute control, as some hon. Members would like, but he has influence, and he controls some of the purse strings and has licensing powers. He should use those powers boldly where necessary. He does not have large bodies of administrators with the power to spread an expensive bureaucracy over the problem, which some hon. Members would like, but the hard-pressed beef industry is entitled to expect the co-operation of the entire community at this time of need. I hope that, in due course, my hon. Friend will visit the west country, but his first duty remains to get this package up and running, which it has started to be, we are pleased to hear, in the past 24 hours.
It is no use complaining that the Government do not control the beef industry or the farming community generally. Of course they do not, and only the Labour party might want them to. All members of the farming community have a part to play, and I hope that the urgency of wide, effective co-operation will be understood by all those involved.
The NFU team in Dorset is doing well in co-ordinating advice, information, complaints and the concerns of their members, which we Members of Parliament for Dorset have done our best to communicate along the channel. I pay tribute to the work of the NFU in my constituency.
I shall give a small example of the way in which the community in my constituency is helping. There is a very good small abattoir at Sturminster Newton, which is empowered only to deal with the calf cull. Instead of insisting on its normal terms of trade—payment in two or three weeks—it is paying on the nail to all farmers who bring their calves for the cull. I recommend such co-operation to the community at large.
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One producer who is prominent in my constituency has illustrated how, on sales on 2 May and 9 May of prime beef cattle from his clean herd, the entire profit has gone. That picture is reflected by other beef producers. He has sold his cattle at a loss. Ironically, if they had all been over 30 months, they would have fetched more money and his loss would almost have disappeared. I hope that my hon. Friend the Minister of State will consider ways of helping beef producers in that situation—and, indeed, other parties in the food chain. I understand that profits on food sales are currently level and steady; those other parties have at least some responsibility for giving assistance.
I should like briefly to mention some matters that concern our constituents. Some were referred to by my hon. Friend the Member for Dorset, West (Sir J. Spicer) in his excellent speech. The first, which is urgent, is casualty slaughter; the second is the working of the intervention system, which might well be used more than it is; the third is a greater slaughter capacity in our part of the world—I was pleased to learn that capacity is to be expanded in west Dorset—and, finally, there is the position of producers of clean beef from cattle aged under 30 months.
I am certain that the way forward is to continue to ensure that British beef is the safest in the world, not to be afraid to articulate that, and to mobilise support in every quarter. Like my hon. Friend the Member for Dorset, West, I want consumers to understand the quality and advantages of British beef. Let retailers and restaurants supply British beef, and I—along with some of my hon. Friends—will continue to try to promote the campaign by consumers.
The battle for confidence is being won. It is a battle that is vital to the future of our excellent beef industry.
7.51 pm
Mr. Dafydd Wigley: I am glad to be able to contribute to the debate, because I represent a rural Welsh constituency where the sheep, beef and dairy sectors are important and because two of my constituents have died from CJD. That brings the matter into focus. I shall talk about the current crisis later; first, however—as this is a general European agriculture debate—I shall deal with wider matters.
We face a challenge. There is a need for renewal, and a need to help young people to feel that there is a future in agriculture and that it is worth entering the industry. We need to help farmers to retire from an aging industry by devising appropriate schemes. Special assistance is also needed. At the next meeting of the Council of Ministers, will the Government propose additional help for beef farmers, perhaps through a flat-rate supplement to the beef special premium and the suckler cow allowance throughout the European Union? The Government have the power to top up the allowance by £21.41, and I ask them to use that power. Other member states do so. That would at least allow us a more level playing field.
There is also the environmental dimension. I was appalled when, launching the new Environment Agency in Bangor on 27 March, the Secretary of State for Wales did not refer to the central role that farmers play as guardians of the countryside. Environmental schemes need to be adapted in Wales. I recall that, when the common agricultural policy was reformed in 1992, environmental schemes were introduced as

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"accompanying measures" to encourage environmentally sensitive farming. All farmers have been subject to the CAP reform, but only some in Wales have had access to environmental schemes such as the Tyr Cymen and environmentally sensitive area schemes. We should now be given voluntary, comprehensive access to schemes for environmental enhancement: that would help Welsh farmers through a difficult time.
We face a number of changes. There are the changes in the general agreement on tariffs and trade, with further World Trade Organisation negotiations lasting until 1999, and the European Union is to be enlarged. We shall need to ensure that financial resources are targeted properly. We often hear the Government speak of that in other contexts. Those resources should be targeted to support the farmers who are most in need, and to maximise the number of viable holdings. Such a strategy would be good for the rural economy.
The Ministry's performance over the past two months can only be described as abysmal: if it were in the private sector, all its members would have been fired for crass incompetence. Vulnerable small farmers in Wales are having to pay the price, as, indeed, are farmers elsewhere—and not only farmers, but those employed in abattoirs, processing and the transport sectors. We have heard about that from other hon. Members.
First, the Ministry and the Department of Health failed to co-ordinate a coherent response following the announcement of 20 March. The Government also failed to get our European Union partners on side before the announcement and to announce a package of measures on the same day, which would have avoided some of the market panic that has taken place. Secondly, it was scandalous that, having decided to go for the cull of cattle aged over 30 months, the Government did not work out the detailed methods of operation. Furthermore, after the scheme had been decided on and slaughter locations and pick-up points had been specified, it was discovered that the list was spurious because, apparently, of a lack of rendering, transport and freezing capacity. All three of those excuses were given during Monday night's debate.
My constituency, Caernarfon, contains a small company, Cwmni Cig Arfon—a new, modern abattoir. Last Thursday, the intervention board told the company that it was on the final list of 20 companies that would slaughter cattle over 30 months. On Friday morning, the Welsh Office vet gave the company the details of the procedures that should be followed, and the other necessary information. He said that only five abattoirs in the United Kingdom would be allowed to slaughter the cattle, and that it was one of the five. The company was, of course, very pleased. On Friday afternoon, a farmer telephoned the Welsh Office help line and was told that there were two slaughterhouses in Wales, in Caernarfon and Abergavenny.
By Saturday morning, the story had changed. The company was told that it was not clear whether it was on the list. On Monday of this week, it was told that it was definitely not. When the company asked for an explanation, it was told, "We got the wrong place in Wales." That sums up the whole saga. Only one word can adequately describe such a chain of events: "shambles". I believe that the derivation of that word has links with slaughterhouses; it is clearly living up to its etymology.
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The abattoir in Caernarfon went to the trouble and expense of trying to establish arrangements to take cattle aged over 30 months quickly, but to no avail. The only explanation that I can find is that the renderers, not the Government, are in the driving seat, and are being allowed to overturn Government decisions with impunity. Ministers may claim—and I acknowledge the point—that the renderers are the bottleneck and therefore have the whip hand, but that was known as long ago as March, when the issue was first addressed. It was recognised then that the renderers were likely to be the bottleneck. What was done at that initial stage to bring greater rendering capacity, or at least incinerating capacity, on stream, or to devise a strategy to deal with the animals? That might have taken weeks, but if urgent go-aheads had been given in March, we would be that much closer to a solution—two months closer, in fact.
What was done to bring back into use, on an urgent basis, the frozen store capacity that is available? I understand that there is considerable capacity under the control of the Ministry of Defence. I have the impression that the Government were themselves frozen into a posture of total impotence, and were not prepared to interfere with the free market to which they are so dogmatically attached. I also have the impression that there was no overall command or co-ordination of the efforts to overcome the logistical problems. Even at this stage, I call on MAFF and the Welsh Office—who are generally, although not tonight, the invisible partners in this whole sorry charade as far as Wales is concerned—to set up proper co-ordinating machinery. The Minister's assurances to the House about the prospects of progress in Wales, given only last Monday, have been shown to be worthless.
Mr. Cynog Dafis: May I remind the Minister that, in my constituency, rendering capacity is currently idle, but is capable of taking 1,000 animals a week? The plant involved was operating until recently; if it could be returned to operation expeditiously, it would prove extremely valuable in a large area and could take animals from adjacent slaughterhouses that were originally to be designated as appropriate places for culled cattle.
Mr. Wigley: The figures that my hon. Friend has quoted put what is happening into perspective. The present capacity of one of the two slaughterhouses to be identified in Wales—in Abergavenny—is only 100 animals a day. The other location that has been identified in the first minimal list that has been given the go ahead is Gaerwen in Anglesey. Although it was named on Monday as one of the slaughterhouses where progress would be made this week, so far no slaughtering has occurred there because no rendering capacity has been made available to remove the corpses. From what I have been told, there will be no such slaughtering in Gaerwen this week. The first week of the programme, which was announced only last Monday, has clearly failed.
This week, not one slaughterhouse in north Wales is acting as the Government said it would. Apparently, we shall have to look to Shrewsbury, over the border from mid Wales, but it is taking only a small proportion of its animals from Wales and is giving priority to its normal list of customers. I understand that the slaughterhouse in Shrewsbury—which was to be Wales's salvation—has

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been offered 2,000 animals this week, and has accepted 35. The programme, which was sold to the House on Monday as a coherent answer to the problems, is breaking down. Farmers face uncertainty and there is no coherent leadership.
As my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Dafis) said, that problem exists in north Wales because Gaerwen is not operational, while in Dyfed there is no slaughtering capacity. That is absurd, because there are at least three slaughterhouses in Dyfed ready to begin—Oriel Jones in Llanybydder, Dewi James in Cardigan and TWM Meat of Felinfoel, Llanelli. TWM Meat has arranged cold storage, but it is not in the scheme, which makes the mind boggle.
On Monday, the Minister said that the slaughter rate for England and Wales would be 18,000 this week. On the basis of what we have experienced in Wales, that figure seems grossly optimistic. Even if the rate of 18,000 a week were achieved, it would take months, perhaps years, to eliminate the backlog that is building up. If further culling is demanded, there will not be a hope in hell of carrying it out on the basis of what is currently being provided.
The Government's inability to develop a successful slaughter programme has left farmers with animals that are more than 30 months old. They would normally have been sold. They are still consuming fodder that should have been available for younger animals. That difficulty is compounded by a late spring and a low growth rate. Farmers are having to buy more feed to keep their animals alive because they cannot be taken on for slaughter. They therefore face higher costs although their income is lower than expected owing to the price reductions. As a result, they face a cash flow crisis.
There are financial implications for many farmers. Most farms in Wales are small; we are talking about subsistence farming, not fat cats. Many are small family farms where the family depends on family credit to survive. The price for animals taken to market is running at about 103p per kilogram—as against an expected price of 125p, or perhaps 130p for a good animal. That difference—of 20p per kilogram—makes the difference between survival and failure for many farmers. They will have worked for nothing over the winter as they will not get back what they have paid out, and they will be unable to pay their bills.
It was not until last Thursday that farmers in my constituency received their first letter from the Welsh Office or the Ministry of Agriculture, Fisheries and Food telling them what had happened—seven weeks after the crisis broke. I do not expect the Minister to write 30,000 letters in his own hand, as was suggested earlier in the debate, but there has been a breakdown in communications, which has compounded the uncertainty felt by the industry.
Many problems have been compounded by a partial understanding arising from lack of information. The Minister will be aware that three large supermarket chains in the United Kingdom have said that they will not take any meat from abattoirs involved in selective culling. That is a disgraceful attitude and it could undermine the Government's programme. When the Minister winds up
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the debate, will he say what the Government will do to try to knock sense into the directors of those companies that are taking such a stupid approach?
We all need to convey the message that we recognise the quality of the beef that we are producing and know that it is completely safe to eat. On that basis, the ban should be lifted. I am glad that my county council, the new Gwynedd county council, was the first authority in Wales to lift the ban in schools and at least give parents and schools a choice.
Those who advocate the culling of whole herds, as has been suggested in some quarters, are speaking nonsense. No one can claim that BSE moves laterally between live animals in a herd, and it makes no sense to cull a herd. To cull a whole herd because one case of BSE has occurred would be nothing short of a witch hunt such as that which occurred during the second world war. Then, if the resistance killed a German soldier, the SS would shoot 100 innocent men from the town or village. It would be just as senseless to cull a whole a herd because there had been one instance of BSE. The Nazis adopted that approach to teach a lesson to potential resistance activists, but it is nonsense to suggest that cows will be frightened into not catching BSE if such action is taken against them. It is more likely that, in those circumstances, farmers will be frightened to admit that they have BSE on their farms, which would be serious. The culling of entire herds would destroy the Welsh dairy industry at a stroke and I urge Ministers to resist any such suggestions.
The 30-month rule is inflexible. It is difficult to identify the date at which an animal reaches 30 months of age because full records may not be available. Vets tell me that they can identify a 33-month-old animal from its tooth development, but not a 30-month-old one. Different breeds mature at different rates. Many argue that some breeds take up to 36 months to reach the same stage of development as others reach at 30 months. The scheme needs to be flexible. I know that a consultation document has been produced, and I urge the Government to introduce flexibility into the scheme. If they do not, farmers will be tempted to fatten cows to go to market earlier than usual and the meat quality will suffer, which will not be good for the industry in the long term.
The approach being taken is scientifically unfair. One of my constituents, a farmer, has never had a case of BSE. He breeds his own suckler herd and feeds them on silage and home-grown barley. He has still had to slaughter a perfectly fit 30-month-old animal, which seems crazy. Some hon. Members and some of the mindless media try to project the problem as one created by the European Union. A few moments ago, an hon. Member rushed into the Chamber thinking that he had bad news from Brussels; there was joy on his face as he proclaimed the bad news to the House. It is nonsense to take such an approach. Sadly, the United Kingdom, not its European Union partners, has suffered 160,000 cases of BSE. Individual states, not the Commission, are taking the hardest line. If we were not members of the EU, those states would still take a hard line and we would not receive the 70 per cent.—or whatever the net figure is—financial contribution towards the cost of compensating farmers. We would have to negotiate with each and every member state bilaterally. To blame the EU for our predicament is scapegoating of the worst xenophobic sort. To threaten retaliation against the EU is mindless and can only worsen the farmers' plight.

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Discussions this week in the Select Committee on Agriculture, whose members are visiting some of the other member states, give reason to believe that the French Government are willing to see a step-by-step lifting of the ban. The announcement in mid-debate by the Minister is a material indication of what is happening in today's negotiations in Brussels. If agreement on this matter is to be achieved, it will be by diplomacy, not by the ranting of the loony right, which will only undermine the prospects for an end to the ban.
I emphasise the danger of escalating the war of words with the European Union. The main market for Welsh lamb is the EU. Consignments of lamb have already—wrongly—been blocked in Italy and Spain. It is to be hoped that those are isolated incidents and that they will not become a pattern, but if the vicious anti-EU propaganda continues to pump out of the Chamber and out of London's press, there could be a real danger of escalation that goes beyond beef products. July is the critical month for Welsh lamb sales, and if the European market is poisoned by that time, not by BSE but by the venomous speeches of little Englanders in this Chamber, there could be a devastating knock-on effect on the sheep sector in Wales.
I shall now deal with the knock-on effect on the dairy sector. Will the Minister confirm that, following the BSE crisis, section 3J of the intervention board milk quota guidelines, which deal with temporary reallocation following herd movement restrictions, will come into play? Will he also confirm that additional quota will be given to milk producers who are likely to exceed their existing quota as a direct result of the restrictions that are being placed on them? I should be glad of a statement in the Minister's winding-up speech—or one tomorrow—on that matter, which could have a material effect on a creamery in my constituency.
I issue a warning on an associated matter. Ministers said a short time ago that we may import beef from third-world countries to keep pie factories going. In view of the controls on British herds, we should be assured that imported animals are from BSE-free herds; that they are not being given hormones that are banned here; and that the meat has not been affected by the over-use of organophosphates such as for tsetse fly control. If our farmers are rightly shackled by rules and regulations to protect the consumer, the consumer has every right to expect the same protection in the context of meat from other parts of the world. If that does not happen, the consumer will be in danger of going out of the UK frying pan into an even worse, unknown global fireplace.
Consumers need full information on the contents of the food that they buy. The farmer also needs information on the content of animal feed. Consumers and farmers need detailed background information about beef for consumption. The national milk records organisation has proposed a national cattle database which would certainly improve traceability and would make the management of disease much easier. I ask the Government to pay attention to that proposal.
The Minister said that he had some sympathy for those who have lost their jobs. He probably has: his job is on the line. In view of the total failure of MAFF and the Welsh Office to create a viable system to cope with the BSE crisis and the culling programme that the Minister devised, I call for the creation of a co-ordinating executive body, possibly based on the intervention board, to take
1022
control of the culling programme. The Government have badly let down the farmers through sheer incompetence. It is time for resignations. If they are not voluntary, the House should insist upon them.
8.13 pm
Mr. Peter Temple-Morris: Obviously I do not agree with the hon. Member for Caernarfon (Mr. Wigley) about the Government and the Minister of Agriculture. However, I say without reservation that it is a pleasure to follow him. As he knows, I was born in Wales and I have some knowledge of the importance to Wales of farming and of its small farmers. On the other side of the border, I represent some 800 square miles of English farming territory.
I am grateful to the hon. Member for Caernarfon for referring in some detail to the slaughtering capacity in the border area because that makes it easier for me to make a point more quickly than would otherwise have been the case. Herefordshire has no operational, designated abattoir. One has been designated, Williams of Weobley, but having been designated, it cannot be serviced by the renderers. As we all know, that is the major part of the problem. I join hon. Members in spurring the Government on to increase rendering capacity and to move the beasts through the abattoirs by increasing cold storage capacity.
My 800 square miles of border country has many farmers, some of them small, and livestock producers. It is the home of the Hereford breed, and perhaps that says it all. My farmers, in common with those of other hon. Members, have had a dreadful time. Many of them may be ruined and more will go out of business as a result of what has happened, which is far from over. My meetings with farmers have led to fairly vigorous exchanges, but farmers generally have been calm and reasonable in the face of the problems that they are trying to deal with. A tribute is due to them and to the National Farmers Union and the Country Landowners Association for the quality of their leadership in a difficult situation.
The nation has to hang together in dealing with our friends in Europe, but our farmers need to see a way ahead and they need to be kept afloat during these bad times. They are grateful for the assistance that has already been given, but there may be a case for more. I shall specify those areas in which further help is needed and concentrate on the prime beef producer, the person who is not picking up a milk cheque but whose livelihood is being grossly undervalued by the market and who receives no subsidies. Before coming to that, I should like to deal with three issues.
First, the country has contributed to the making of the crisis. We had an emergency on our hands, and from it we have created a first-class crisis for beef producers in all parts of the United Kingdom and in Europe. I am not referring to the Government, but to the beginnings of the crisis. The press leak to the Daily Mirror, which my hon. Friend the Member for West Dorset (Sir J. Spicer) mentioned, about the SEAC meeting in Edinburgh was quite deplorable. That led to a chain reaction and the general press treatment of the matter was equally deplorable.
In the media, the issue was sensationalised and dramatised and matters that would have better put moderately were put in an extreme way. The dear old foot and mouth photograph from, I think, 1967—showing

1023
hooves sticking in the air as cattle were burned in the fields—was trundled out and printed in the tabloids yet again.
I would be the last to criticise the scientists who have carried out valuable work, but some of them have little media experience. By and large, what they said on the media was cut into soundbites. One scientist gave the nation the impression that it faced a first-class general epidemic, which was about as unhelpful in this difficult area as anything could be. My final criticism—which is directed into the past although it is necessary to say it—is that there was a panicky and somewhat irresponsible immediate reaction by the representatives of some consumer organisations. They could not get on "Newsnight" quickly enough to condemn the entire British beef industry and to give the nation the impression that it would never be right or safe to eat beef again.
I am pleased that the good citizens of Herefordshire did not succumb to that panicky reaction. In fact, on the Friday and Saturday of the week of the initial announcement, some supermarkets had the good sense to lower the price of beef and their shelves became bare quite quickly. I believe that the British people have a sound reserve of calm and good sense.
Mr. Dalyell: The hon. Gentleman is referring, partly, to the work of the neuropathogens unit in Edinburgh. I agree with him about the press. However, to be fair to the scientists concerned—one or two of whom are my constituents—they thought that they were doing a speculative, serious scientific job and they had absolutely no notion as to the purpose for which their work would be used. They are careful and serious people. I agree with a lot of what the hon. Gentleman has said.
Mr. Temple-Morris: I hope that I did not give the hon. Gentleman the impression that I was getting at those people. I was referring to the way in which certain comments were reported. Their work is both valuable and vital. The way in which that work was allowed to come into the public domain and the way that it was treated thereafter—mainly by the media—are far more at fault than one particular comment by one particular scientist.
Mr. Dalyell: One of the tragedies in all this is that those people were working on small animals—I wish the Minister would listen to this—as the Government had curtailed funding for the follow-up research that should have been done on the bigger animals.
Mr. Temple-Morris: I am pleased that I have allowed the hon. Gentleman to make some points to the Minister; I hope that he will now allow me to complete my speech. Secondly, there is no need for undue party politics in this issue—fortunately, it has not been abused in this debate. It is perfectly proper for the Opposition parties to criticise or make suggestions about things that are within our power to accomplish and to improve. However, when it comes to an approach to Europe, any criticism that might be made about approaches being in the wrong direction will be taken up by other European Ministers for agriculture who, for one reason or another, want to block us or to impede our progress. I welcome the spirit of the debate.
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The third general point is that there is no need for Euro-bashing in this matter. It is quite insane. If we want the help of an organisation—without which we would be in a much worse mess—we should not attack it. These sorts of odd threats have crept into the media, coming from the usual anonymous commentators who abound in these corridors, and they are most unhelpful and do a lot of harm.
We have had two rather dramatic entries into the House by harbingers of misfortune. They have no doubt spent the entire evening watching the Press Association tape to be the first to regale us with the bad news. They regaled us by way of intervention and then left the House. Thanks to the Minister of Agriculture, we know that they got it utterly wrong.
Mr. Tyler: I agree with the hon. Gentleman about the two carrion crows who came into the House at such speed and disappeared again. When it is the usual suspects, Ministers from other Governments will not take much notice of what they say. The Conservative Governments of France and Germany must be aware that there are some curious people on the Government Back Bench. The chairman of the 1922 Committee—the right hon. Member for Shipley (Sir M. Fox)—has adopted the attitude that we have to bludgeon our colleagues in Europe into submission. Does the hon. Gentleman think that that approach has been helpful?
Mr. Temple-Morris: I cannot be seduced into having an internal debate at the behest of the hon. Gentleman. The chairman of the 1922 Committee is well known for his plain speaking Yorkshire views, which are often robust and, on occasion, do not have the quiet diplomacy of which other hon. Members are more capable.
I refer to the beef producer. We have heard a lot about the ban and about slaughtering capacity. I shall concentrate on the plight of the pure beef man, particularly the small producer. As I have already said, such people do not receive a milk cheque to get through this crisis. The under 30-month prime beef producer is selling into the market and, so far as I can see, he is taking a 20 per cent. loss on his beasts and the delays are causing more losses. The whole situation has become a disaster.
There is a need for some sort of top-up or deficiency payment in this area which can taper off as the market improves. I understand that this is happening and that the Government will approach the Commission in May in an effort to get European involvement in the scheme. We must have a scheme quickly. If we are to have any hope of getting European help and involvement, there must be British involvement as well.
Mr. Beggs: Does the hon. Gentleman agree with me that the top-up must apply to heifer carcases as well as to steer carcases? All subsidies are currently directed towards steers.
Mr. Temple-Morris: I thank the hon. Gentleman for pointing that out and I agree with what he has said—in fact, I shall adopt it as part of the case that I am urging on the Government at the present time.
I refer to the more than 30-month prime beef producer. This is another area and it affects the same people. These people are obviously grateful for the 25p per kilo top-up.

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However, one of the most tragic aspects of this tragic situation is that we are dealing with some of the nicest beef in this country. I refer to the specialist herds—Northern Ireland and Scotland have already been referred to in this regard. We need to have progress there. As part of the partial approach to lifting the ban, it would seem to me that that is a good candidate to lead in on.
The first matter is obviously gelatine, tallow and sperm. That avenue is open. From what my right hon. and learned Friend the Minister of Agriculture has said, the news there is not necessarily bad and it could be good. I should have thought that specialist herds would be dealt with next. In the meantime, we need to secure the support of the Commission and the support of the Government for further help in this area for those people.
There are other areas of general additional help. One that has not been mentioned is a generous approach to European Union discussion about increases via the beef special premium and the suckler cow premium. These are areas in which help can be given. So much for the limited aspect that I wanted to approach—I hope that I have not unnecessarily taken up the time of the House. I conclude by saying that the economic, financial and political ramifications of this crisis are very considerable. We need to progress with all due speed, and that progress has to be perceived by the public as well as being proclaimed by us.
8.29 pm
Mr. George Stevenson: The hon. Member for South Worcestershire (Sir M. Spicer) referred to the need to discuss the common agricultural policy. Today many hon. Members have concentrated on the BSE crisis but they have not referred to the common agricultural policy. The hon. Gentleman went on to comment about the waste, inefficiency and ineffectiveness of the CAP, and I agreed with many of his views. I shall concentrate my remarks on the common agricultural policy and, in that context, refer also to the BSE crisis.
The hon. Member for South Worcestershire lost me when he tried to blame the Labour party for the Government's failure to put down a motion upon which we can vote. I part company with him on that point because I fail to see how that is the Labour party's fault. I do not follow his logic. We parted company again when he implied that he wanted to remove the CAP altogether. The Labour party wants to see it reformed fundamentally.
I think that it is relevant to refer to the BSE crisis in the context of a debate about the common agricultural policy. I believe that the application of the common agricultural policy over the past 25 years has led to some serious problems. The CAP has adversely affected our agricultural environment: it has promoted risk-taking in the pursuit of maximum output and maximum profits. I do not suggest for one moment that farmers and producers have not had some good and some lean times over the years. However, I argue strongly that the common agricultural policy ethos is to produce as much as one can as quickly as possible in order to maximise profits. Inherent in that ethos is the real risk that shortcuts will be taken.
At the end of his speech, the hon. Member for Caernarfon (Mr. Wigley) referred to the consumer. People the length and breadth of this country and in many European Union countries believe that the common agricultural policy has put the interests of the producer before those of the consumer. The correct balance has not been achieved.
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In July 1992, the right hon. Member for Suffolk, Coastal (Mr. Gummer) in his then capacity as Secretary of State for Agriculture, Fisheries and Food came to the House and claimed that the reformed common agricultural policy was good for the taxpayer, the farmer and the consumer. I shall briefly examine the validity and the accuracy of that statement.
Is it good for the taxpayer? In 1992—the year that the then Secretary of State made the statement to the House—the guarantee section of the common agricultural policy cost European taxpayers £24 billion. The anticipated cost of the same section in 1997 is some 40 billion ecu—or £31 billion. Between 1992 and 1997, the cost of the guarantee section of the common agricultural policy will increase by £7 billion. So much for it being good for the taxpayer. I cannot detect any sign—other hon. Members may be able to—that the remorseless increase in the budget will be mitigated effectively.
Many hon. Members have urged us not to be party political in the debate. However, I must put on record the fact that those massive increases in common agricultural policy expenditure were agreed, step by step, by the same Government who said in 1992 that the deal which they had fought for and achieved in Europe was good for the taxpayer. That point must be underlined.
The remorseless increase in expenditure cannot continue: this year it has increased by 10.7 per cent. over last year. I can think of many education authorities that would love to have a 10.7 per cent. increase in funding. How can the country justify that expenditure? Brussels has put up its hand for an expenditure increase of almost 11 per cent. this year while, at the same time, the Government turn around and tell the people of this country—including the researchers—that there will be funding cuts. That approach is not consistent, it is wasteful and it will not allow us to meet our objectives.
In discussing issues of cost and what is good for the taxpayer—who is also the consumer—we should note that in 1992 the Commission anticipated that the total cost of the reforms would be some 2 billion ecu over and above the 1992 budget. According to my calculations, that is about £1.3 billion. Those costs now total £7 billion. I accept that some of the costs may be attributed to enlargement, but we cannot argue away the massive increases in the cost of the CAP to which the Government have systematically agreed year after year.
Is the common agricultural policy good for the farmer? In opening the debate—or by way of intervention—the Minister of Agriculture said that farmers are better off today than they have been for many years. My hon. Friend the Member for Edinburgh, East (Dr. Strang) responded by saying that the Minister's statement might have been credible if it had been made before 20 March, but that in the present circumstances it was an insult to producers.
Let us examine how the common agricultural policy has benefited the farmers. It is true that incomes have increased across the board. They vary between sectors; they always have. Is that increase due to some deliberate Government policy? Did Ministers sit down and consider ways in which farmers' incomes could increase within the common agricultural policy? The answer is no. Farmers' incomes have increased largely because of the devaluation that was forced upon the Government in Sept 1992. That was the most significant factor to affect farmers' incomes. If the Government wish to claim credit for the increase in

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farmers' incomes, they cannot shy away from the fact that destruction of their economic policy forced devaluation and increased farmers' incomes. The Government cannot have it both ways.
The other reason why farm incomes have gone up is that there has been an increase in world prices, especially in cereals.
Year on year, it is costing the CAP £1.3 billion to cover the cost of devaluation. It has faced that cost since 1992 and it continues now. Farmers know that incomes that have been increased as a result of a destruction of Government policy and because of devaluation, and that a policy that depends on contributions of that magnitude are no basis for the future that they dearly want to see secured. We should all agree with them. It is important that we recognise that.
World prices have increased to such an extent and the CAP is such a nonsense that—I am not sure whether this is widely known—the European Union is taxing cereal exports to meet world demand. How crazy can it get? We are putting taxes and levies on imports. Because of the CAP, when we have an opportunity to export, we put taxes on those exports because of the demands of the CAP. That is absolutely ludicrous.
It is not an exaggeration to say, therefore, that when we present that scenario to farmers—they know it better than any of us because they live with it every day—and we say, "This is the future", we insult their intelligence. They know that that basis is no way to determine the future of agriculture.
The third area is the consumer. I want to relate my comments on that to bovine spongiform encephalopathy. I run the risk of being accused of using hindsight and of apportioning blame. I want to avoid that if I can, but for the Government to suggest that their actions since the early 1980s have not contributed to the disastrous fall in consumer confidence defies logic and belief. Who deregulated the animal food processing industry?
Mr. Ian Bruce: Has the hon. Gentleman read the two papers that the hon. Member for Peckham (Ms Harman) waved at hon. Members because, if he has, he will know that that is a nonsense of a charge?
Mr. Stevenson: I did say that I stand to be criticised, but I hope that my comments—if the hon. Gentleman will listen to me a little longer before he makes his charges—will show that I have a real point to make here, without apportioning blame.
In relation to the Government, two important elements run all the way through the issues that arose in the 1980s. The first is—I repeat—that there was a deregulation of the industry, which resulted in concerns being expressed by scientists that those measures ran the risk of not effectively destroying the agents that could have contributed to the problem.
Mr. Alan W. Williams: The Southwood committee was set up by the Government in 1989 to consider the origins of BSE. It reported at length. I read that report at the time and it concluded that the 1980 deregulation and, in particular, the lowering of temperatures in the rendering process caused—
Mr. Ian Bruce: It was not deregulation.
Mr. Williams: It was deregulation. It allowed industry to maximise its profits and to choose its own temperature. That lower temperature caused scrapie to turn into BSE.
Mr. Stevenson: I am grateful for that intervention, with which I concur. Again, so that I am not misunderstood—I have touched the sensitivities of some Conservative Members—I am not seeking to apportion blame, but to string together a series of events that took place in the 1980s that lead to serious concerns about what the Government did and did not do.
Mr. Gordon Prentice: Just to nail this point once and for all, is my hon. Friend aware that page 13 of the Library paper on BSE, published today, says:
"The generally accepted explanation for the occurrence of BSE is that it followed a change of process in the rendering industry away from the use of chemical solvents, in a process which required a high temperature to drive off the chemicals, to another continuous process."
Mr. Stevenson: I am aware of that and I am grateful to my hon. Friend for his intervention, which has adequately answered that of the hon. Member for South Dorset (Mr. Bruce).
Mr. Ian Bruce: Will the hon. Gentleman give way?
Mr. Stevenson: I will not give way again. I wish to make some progress. The point has been adequately answered.
Mr. William Ross: As was rightly pointed out by the hon. Member for Pendle (Mr. Prentice), there was a change in process from batch treatment to a continuous treatment. Do any other countries in Europe still use the batch treatment? Is that treatment still dealing with the problem not only of the BSE prion, but of other diseases such as salmonella?
Mr. Stevenson: I do not claim to be an expert on agricultural and rural affairs in the United Kingdom and therefore I cannot answer hon. Gentleman's question. I apologise for that, but my remarks were dealing with what happened in the United Kingdom.
Mr. Welsh: The hon. Member for East Londonderry (Mr. Ross) knows the answer.
Mr. Stevenson: He probably does and he will probably tell me later.
The second element that runs through what happened in the 1980s is a growing perception that the Government were never in control of the position, no matter what they did. I recognise that perception and I do not blame our European counterparts for having it. Between 1986 and 1988, there were two and a half years of inaction. Some people argue that the reason why the Government took no action in that time was that they hoped that the matter would go away, and they wanted to cover it up and protect the producer. I am not sure whether that is true, but it is a serious concern that many people have and it is not good enough for the Government to stand up time after time and say, "It was nothing to do with us."

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On the issue of the 50 per cent. compensation, the Government were told at the time what would happen and it proved to be true. They were told that, some people, if faced with a marginal decision, would send their animals to market rather than face a 50 per cent. reduction in the value of those animals. It was as inevitable as night follows day, but, for 18 months, the Government took not a blind bit of notice. The Government then had to increase the compensation to 100 per cent., which they were told they would have to do in the first place. By then, whatever damage was to be done, had been done.
Throughout the 1980s, we were consistently told, "Do not worry. This cannot be transferred from one animal species to another." I do not know whether it can or not. I am not a scientist; I have read what scientific information is available. I know, however, that BSE has been identified in other animal species. The Government said, "Do not worry, it cannot be transferred from one animal species to another", but the fact is that it can. That affected consumer and public confidence.
Then the Government rightly said—I have not seen any conclusive scientific evidence to the contrary—that, given that the disease had occurred in other animal species, even though they thought that it could not and said that it could not, we should not worry because it could not affect humans. They said that time and again. I do not have to remind hon. Members that, not so many weeks ago, the same Government said that there was a new strain of CJD and the most likely cause of it was infected beef. The point that I am making, without apportioning blame, is that no time during that crucial decade of the 1980s, were the Government in control. They reacted to situations rather than being proactive.
When one puts all those factors together, is it any wonder that consumers do not believe the Government any more? If one thing needs to be done to restore consumer confidence it is for us to be frank with ourselves. The Government should be frank and not try, as the hon. Member for North Dorset (Mr. Baker) did, to give the impression that the newspapers, the European Union and the Labour party are all to blame. It seems that everyone is to blame except the people who have been in power for the past 17 years. The Government might be able to fool themselves and, on the odd occasion, fool some Opposition Members, but they can no longer fool the consumer and the public—they have been rumbled.
I began by referring to the CAP and I shall end—
Mr. Ian Bruce: Hear, hear.
Mr. Stevenson: I hear the cry of "Hear, hear", which encourages me to continue a little longer, but I realise that I may fall foul of your good self, Mr. Deputy Speaker.
There are pressures for change in the CAP, and they are building. The GATT round, which has been an integral part of the reforms and will continue to be so, the budgetary pressures in the United States and enlargement all mean that the CAP will be forced into change. It would be a tragedy if that change were forced on the United Kingdom without us having a definite and proactive input into it.
One of the basic elements that will fuel that change is the recognition of a fundamental and self-evident point about the whole tragic mess of the BSE crisis. The days when consumers were prepared to put up with agriculture
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being able to produce as much food as it wanted, be heavily subsidised and run risks to maximise income—who can deny that risks were taken which may have contributed to the present crisis—are long gone. There will be a sea change in consumers' demands. One thing that will change, which is long overdue, is that people will insist that their food is produced in a wholesome manner that never again opens themselves and their families to the sort of dangers that have played such an important part in the destruction of consumer confidence over recent months.
8.53 pm
Mr. Quentin Davies: The news from Brussels tonight seems not discouraging so far as it goes. I hope, as I think that all my hon. Friends do, that on Monday, when the meeting of the standing veterinary committee resumes, the Government are able to secure agreement that the ban on tallow, semen and gelatine can be lifted. If that is achieved, it will be an encouraging step forward and a first dividend from the very considerable effort that my right hon. and learned Friend the Minister has put into finding a solution to the problem since March. He and his colleagues are to be congratulated on that.
All of us who have faith in the democratic process and the value of a democratic assembly such as this House believe that one of its great virtues is that, as a result of open debate, eventually—not necessarily immediately, but certainly over the longer haul—nonsense and illusions can be sifted out and the truth can prevail. Public debate on issues of national importance can thereby be better informed and clearer and policy-making more effective as a result.
Some people may say that that is a rather idealistic notion. I very much cling to it and therefore feel that it is important to take the opportunity of this debate to refute clearly the extraordinary degree of nonsense that has been abroad on this subject. I noticed that, in his interview in Le Figaro yesterday, my right hon. Friend the Prime Minister asked what I thought was a very pertinent question when he inquired what the press had to do with the real world.
I would like to think that all my constituents in Lincolnshire are far too intelligent to take very seriously what they read in the tabloids and that they would not fall into the trap of supposing that they would get a balanced picture of the facts on any issue on which a tabloid is running a campaign. Nevertheless, some people might be sufficiently naive to believe what they read in the tabloids or even rely on the national dailies as their only source of information. Anybody who depended on the national press, especially the Murdoch press, the Black press or the Rothermere press, to give them anything like a clear picture of the context in which the BSE and beef crisis has been evolving would have been extraordinarily ill-served by what proudly used to call itself the fourth estate.
In my time in politics, I cannot recall another occasion on which there has been such a systematic attempt to subvert the truth and hide reality from people than the one that we have seen over the past few weeks.
Anyone who took seriously the newspapers to which I have referred and had no independent source of information on the situation would regard three propositions as entirely established and absolutely axiomatic. The first is that the

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BSE crisis and the crisis in the beef industry have been caused by the European Union or by our membership in the European Union. Secondly, they would believe as a matter of established fact that the European Union had taken the initiative in banning British beef. Thirdly, they would believe as a platitude that our membership of the European Union was a factor that made the crisis more onerous and more difficult to resolve.
Those three propositions are not only wide of the truth, they are, in every case, the exact reverse of the truth. That needs to be said loud and clear. As has already been said by several hon. Members in this debate, there is sadly no question at all but that this crisis is a British crisis. It is a British problem. I take not the slightest pleasure in recognising that fact, but it behoves us to have the courage and the honesty to face facts, uncomfortable or otherwise. Honesty and recognition of the truth, after all, are the first prerequisites in effective policy-making. Not only claims of justice and truthfulness but a pragmatic sense of how one most effectively manages a country requires us to remove from our minds any wishful thinking and to face fully the facts as they are.
The facts have been set out on many occasions. I should like to pay tribute to the paper prepared by the Parliamentary Office of Science and Technology on this matter because, of all the many bits of paper I have read on this subject in the past few weeks, it is quite the clearest and most succinct. The facts are that we have had in this country more than 150,000 cases of BSE. The country with the next highest "score", if that is the right word, is Switzerland, with 205. Ireland has had 123; Portugal, 31; France, 13; and numbers that can be counted on one's two hands have been reported in Denmark, Germany and Italy. I believe that those cases are, sadly, attributable to imports from this country or to imports of contaminated feed from this country.
So it is a British problem, and we had better face that fact. Moreover, it is a problem that has affected the beef market across the European Union. We must therefore understand that others feel that we have rather gratuitously caused them very considerable difficulties. So perhaps—rather than insult and defiance—some understanding of the problems faced by other countries might be in order, as they have found that their beef sales have fallen although they have no significant level of BSE.
It is a British problem in more senses than those that I have mentioned. I do not believe that it is fair or useful to be wise after the event, although it is always very tempting to do so. Nevertheless, there are lessons that we should learn from this sad case, to which it is now right to draw attention.
Looking back, it was extraordinary that we decided in 1988 to ban the future use of animal offal in feed for cattle, but that we did not ban the existing stock of those feeds. After all, if the offal was dangerous, presumably the stock was dangerous and should not have been used. The fact is that that stock appears to have continued to be used for some time.
There was the problem that feeds containing offal designed for other animals—pigs and chickens—somehow continued to leak into feed for cattle. That also raises issues. We then found that there have been abuses
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of the new regulations in abattoirs and feed mills—I am sure not since March, but in previous years. So there are lessons to be drawn, and we should draw them.
I am not one of those who think, even in retrospect, that it would have been a good idea to have adopted the severe French and Irish policy of slaughtering an entire herd whenever an animal with symptoms of BSE was discovered. But perhaps one could have considered an intermediate policy of slaughtering the relevant age cohort in a herd in which BSE had appeared. That would have been rather more logical. I think that the age cohort would very likely have come from the same farm or market at the same time, and might therefore have been likely to have been fed on contaminated feed at some point. However that may be, there are bound to be lessons to be learnt from this situation, and we should not avoid the responsibility of learning them.
This is also a British problem in a rather more profound and structured sense. For many years I have said in public—certainly in Lincolnshire—that it is a matter of concern that the British beef industry, which was for centuries world famous for the roast beef of England or of Scotland, in recent generations or decades has become, to far too great a degree, a by-product of the dairy industry. In this country it is extremely difficult to find genuine pedigree beef—beef from a pure beef herd, whether the old-fashioned British breeds such as Angus or Hereford, or Charolais or Limousin. It is possible, but it is difficult.
Mr. Garnier: I am grateful to my hon. Friend for giving way because I know that time is short and it is highly unlikely that I will be able to take part in the debate. I should just like to correct my hon. Friend, because if he visited Leicestershire, particularly the Welland valley in high Leicestershire in my constituency, he would find some of best beef fattening country in the land. There is plenty of good English beef to be found not too far from my hon. Friend's constituency, just across the border in my part of the world.
Mr. Davies: That is the tragedy because there are farmers who still specialise in producing the pedigree beef herds, which produce some extremely good beef. My hon. and learned Friend has just re-emphasised my point, however, because it is extraordinarily difficult for the consumer to find that beef. I am well aware that the beef buyer for the Savoy hotel group will know where to buy his beef. I am well aware that there are one or two specialised butchers who make a point of having access to specialised beef herds. It is also true, however, that for the ordinary consumer it is not possible to find such beef.
I recommend that my hon. and learned Friend should go to a butcher or supermarket in his constituency and ask the salesman, "What breed is that beef? What age is it?", let alone, "When was it slaughtered?". In many cases, he will not even get an answer to that question. Far too much meat in this country is sold by people who do not know what they are selling and bought by people who do not know what they are buying.
The butcher or the supermarket manager rings somebody up on a Monday morning and says, "Send me a tonne of beef', and the stuff arrives on the back of a refrigerated truck, it is red and it comes from some kind of bovine animal. Frankly, that is about all they know about that meat and all they expect their customers to know about it.

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That is an unsatisfactory state of affairs because a market should have proper information channels. Customers should be sufficiently demanding, should know what they are buying and have an opportunity to choose between different qualities of the product. Above all, unless the producers get some credit when they can improve the quality of their products, so that when they specialise in a beef herd, they can be certain that they will get the premium price for it, which in turn means that people know what they are buying and will pay that price, the quality of the product will deteriorate. That, sadly, is our problem.
Mr. Welsh: On a point of information, the hon. Gentleman's comments about beef and dairy herds apply far more to England, because if he wants specialist beef herds he will find them in Scotland—30 per cent. of our industry is pure beef compared with 10 per cent. in England. If the customer wants to buy high quality beef, Aberdeen Angus is only one of many excellent Scottish beef breeds.
Mr. Davies: I am well aware of the virtues of Aberdeen Angus, but it is extremely difficult to find that pure Aberdeen Angus in this country. I am told that some British butchers find that it is unfashionable because the genuine article has a slightly fatty grain in it. The fact remains that if one buys beef in Britain, the chances are that, at best, one will get a cross-bred animal. It is a by-product of the dairy industry because to get cows to lactate, one has to get them pregnant. They therefore produce calves. Those are sold on to someone who fattens them up, and then often slaughters them much too young. That beef is then often sold without being hung properly. At several different stages, the way the market works guarantees that the quality will deteriorate.
The fact is that if people are unlucky, they will just get a piece of redundant dairy cow. In most outlets it will be difficult to distinguish between the breeds. That is important because of its implications for the quality of beef in this country, which has declined—there is no question about that. If one goes to America and one orders a steak, one gets a piece of pure beef animal, such as a Texas Longhorn. In France, one can buy guaranteed pure Charolais or Limousin. In fact, France operates a system of appellation contrôlée for meat, as it does for wine, and a butcher can go to gaol if he pretends that meat is a bit of Charolais when it is a bit of a dairy cow. If one goes to Latin America, one can eat the most delicious pure beef in the world, which has had nothing to do with the dairy industry.
Sadly, that is not the case in Britain. We have to face up to that fact, which, unfortunately, plays a role in the BSE problem because no one in his right mind would feed pure pedigree beef herds on high-protein compound feeds. In most cases, there is no question of such herds having been fed on offal-based feedstuffs. They will have been grazed or fed on cereals. If it had been possible to distinguish clearly in Britain between what I would call genuine beef and the by-products of the dairy industry, a large sector of the market—perhaps especially in Northern Ireland and Scotland—would have been protected ab initio from the blight that now affects the whole industry. There are lessons—and British lessons—to be learned. We should have the courage to face them.
The second general proposition that one would assume to be axiomatic from reading much of the national daily press is that the European Union took the initiative in
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banning British beef. If one asked people on the street how the problem arose, many would say that the EU aggressively banned British beef. Many people think that it was banned because the French or the Germans like being nasty to us. Once again, that is the exact reverse of the truth.
The European Union was not the first body to ban British beef; it was the last. We have heard that some 61 countries had banned it before the European Union, many of them many years ago, including countries with which we have always had good relations such as the United States, Canada, Australia and New Zealand. They banned it five or six years ago when BSE first arose in Britain. If one thinks that it is sensible to retaliate by launching a trade war against the countries impudent enough to ban British beef, logically we should have had one with the United States for several years and we should now be having them with many other countries such as China and Russia.
Several of our European partners would have been tempted to follow those countries' lead in banning British beef some years ago—the Germans certainly wanted to—but they were prevented by European Union rules. Far from the EU having exacerbated or initiated the problem, the reverse is the case. For several years, we continued to be able to export freely to European Union countries. We would not have been able to do that had we not been a member of the EU.
The third proposition is that our membership of the European Union makes the problem more difficult to resolve or more onerous. Again, that is the exact reverse of the truth. It is a great advantage to be in the EU because it has a set procedure to address and resolve the problem. There are various protections in the treaties and, in particular, we can turn to the European Court of Justice if our partners do not seem to be acting in good faith. Those procedures have been launched and are in progress. As my right hon. and learned Friend the Minister said earlier, the Commission, the veterinary committee and so forth are being helpful. When those procedures reach a conclusion, the ban will automatically be lifted throughout the EU. That problem will then be resolved, but persuading the other 61 countries to lift the ban will take much longer. Who knows how easy that will be? The problem can be more easily resolved within the EU than it could conceivably have been outside it.
Finally, financial support will be available. We must be grateful for that at least. It will contribute towards the cost of the very necessary subsidies to farmers and to the industry. We must recognise the irony that although beef production and sales have fallen faster in other European countries than in Britain—and so the commercial damage to their producers may have been greater than in Britain—they will receive no subsidy because they have no slaughter programme because they do not have BSE. We will get subsidies at the expense of people who have been harder hit and despite the fact that they may feel that they are less responsible than we are for the origin of the crisis.
We have here a thicket of illusions and sheer lies, systematically purveyed across the country, which have made it extremely difficult for the British people to see the effects clearly and to plan ahead.
I do not want to sit down without making some positive suggestions as to how we go forward from here. First, we must restore consumer confidence. There is no point in

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simply lifting formal bans unless consumers will buy. We must persuade the consumer that BSE is out of the food chain.
I still have some problems with the idea of culling animals aged more than 30 months. Because the symptoms do not arise until some time after the age of 30 months, if one did that there would be a lower incidence of symptoms arising and established cases of BSE. But the proportion of animals in a herd which carry the BSE agent might not be reduced.
To do that, one needs to identify those animals that could have been fed contaminated feed, or, more practically, to identify those herds that could not have been fed such feed. If we could do that, I hope that we could make progress by exempting from the ban beef herds that have been reared organically or entirely grazed, perhaps on the basis of herds—or perhaps, as has been suggested this evening, we might be able to certify that animals in whole areas of the country were free of any disease. That would be a useful way forward.
Secondly, I urge on my hon. Friend—I have already done so in writing—that we introduce a proper certification system in Britain. That is badly needed. In retrospect, it is a pity that we did not have it before, but I hope we can introduce it as soon as possible. I believe the Government intend to do so in June, and I greatly welcome that.
Thirdly, I hope that some good will in the end come out of all this evil. I hope that in future we will have a better informed market and a better segmented market; that customers will be conscious of the need to distinguish between different types of beef and more conscious of the difference between beef that is genuinely raised as such and beef that is the by-product of the dairy industry; that they will once again demand that their butchers know what they are buying; that they will once again give some credit to those butchers who take the trouble to buy their animals on the hoof directly from farms or in market, slaughter them themselves and can tell them where they come from, what breed they were and when they were slaughtered; and that they will once again be prepared to give some premium to those farmers who are prepared to take the trouble to raise genuine British beef. If that were so, we may find that out of this nightmare we can re-establish the international reputation for the quality of British beef which has been so sadly eroded in recent times.
9.17 pm
Mr. William Ross: As the House knows, I own a farm, although I have not done much farming for many years. At present, my total stock consists of four hens, five guinea fowl and three peacocks. The hens at least are laying, so we are getting something out of them, but probably not at very much profit.
This has been an unusual debate, totally unlike the debate that one expects on an occasion such as this. Only the hon. Member for South Worcestershire (Sir M. Spicer) made a speech that would fit into the usual pattern on these annual occasions because he ranged over a large section of the farming community.
It was wise that at least one hon. Member did that and I would have liked to have followed him to point out that the general prospects for agriculture are not nearly as bright as
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some people have tried to paint them; that the agricultural work force has greatly diminished during the past 30 or 40 years and is still falling; that the average age of farmers is increasing which is not good; that there is now a low profit per animal per acre except for milk; and that the increase in income that we have seen, which was referred to by the hon. Member for Stoke-on-Trent, South (Mr. Stevenson), owed much more to the exchange rate and to the fact that it arose from a low level of income anyway. Sadly, the hon. Gentleman did not draw attention to the benefits that accrued when our currency was allowed to float after we were forced out of the exchange rate mechanism. That opinion may not be shared by Opposition Members now, although I am still very much in favour of it. We also have a difficulty with family farms, which are the norm and will remain so. A real family farm must produce a sufficient net income to keep two generations of a family, and that is generally forgotten. I thought that it would be worth while to draw the House's attention to those matters.
Intensive farming is perceived to be cruel and unnatural, but it arose simply because of the demand to produce the maximum amount of foodstuffs possible in our temperate climate. Anyone who has seen 500 hens in a muddy field in December or January might question the cruelty of the cage or the intensive housing systems. I have seen and worked with both methods, and I have some idea of what I am talking about—unlike very many people who complain about these matters. The changes in farming that have occurred in my lifetime have led to much cheaper food than would otherwise have been the case. Problems will arise in that area if we extend the European Union into the eastern part of Europe, where 25 per cent. of the population are engaged in agriculture. These massive questions have not been touched upon today, although they have been mentioned in Committee, and I hope that the Minister for Agriculture will read the reports of the debates.
If we are to have a competitive and market-driven form of farming, we must realise that within the western world—particularly this country—we cannot have the high levels of hygiene that we demand. The production standards as called for by the green lobby cannot be maintained, and we cannot have all the safeguards that are demanded for our food. We are failing to take into account the fact that these things cost money. If we want those standards, there will be a much higher price at the farm gate than has hitherto been the case. This is the sort of debate that we all should be taking part in. Although we want a secure food supply, we must learn that it cannot come at little or no cost. It will cost more than has been the case for a long time. The question of higher costs is built into the environmental and conservation measures that are now demanded.
Having said that, I—like every other Member—am now forced to move on to BSE, which is the issue of the moment. Germany claimed half of the 50,000 tonnes of intervention meat for May, and other places did exactly the same thing. That led to an immediate and massive scaling back in the requests made by those countries. In Northern Ireland, we asked for a realistic figure and there was no scaling back. I hope that our modest and realistic attitude will be rewarded in the future.
With regard to the 30-month slaughter scheme, at 4 May in Northern Ireland some 40,000 cattle had been offered for the scheme. The telephone lines were jammed and people could not get through. We do not know how

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many cattle are out there, but there are a lot, and there are others approaching the age of 30 months. We have a restrictive rendering capacity, with the maximum being some 1,800 a week. I understand that the number of culled cows is rising every week. There is a real difficulty.
We have an urgent need to slaughter a large number of cattle, not only because they are eating all the available food as the grass is not growing, but because they are providing a problem for the Treasury. The food does not disappear—it appears in extra weight, and every kilo that these animals put on must be paid for. The sooner the animals are slaughtered and put into cold storage, the better. It would be more economical to freeze them in a store than to let them run around, eating their heads off and putting on more weight.
I believe that the topping-up grants should continue to be paid until the surplus of steers, heifers and young bulls has been dealt with and equilibrium has been restored. The same applies to the cattle that have already been sold. Many people have had to clear out their stock because they had no food left to feed it.
I hope that the Minister will discuss the issue of young bulls this evening—it presents a tricky problem. They are not eligible for intervention or for the 30-month scheme, and those above the maximum carcase weight are also excluded. These are dangerous animals, as every farmer knows. One breeding bull is all very well, but who wants to deal with 100 of them at a time? I have worked with cattle all my life and I know that I would not want to. There is no commercial market for these cattle and they have to be removed from the food chain.
We have heard a great deal about how good Northern Ireland's system of identification is. It is indeed far in advance of any other system in Europe. The downside for farmers is that as soon as a beast appears in a terminal at a market, its history is flagged up and everyone knows precisely what contact with a BSE herd the animal may have had, whereupon the beast immediately becomes unsaleable. Hence the vital need for help.
There is also a great need to help the more than 200 BSE-flagged suckler pure beef herds in Northern Ireland; and something must be done for the BSE-flagged heifers.
This whole affair with all its ramifications has shown up one facet of farming, the beef industry, in a way that nothing else could have. All the nooks and crannies have been exposed and people have learned things about farming that they never knew before. For some time we have been urging the Government to use the systems already in place in Northern Ireland and Scotland and soon to be in place—I hope—in other regions to identify cattle that are free from BSE and to use them as a crowbar to prise open European and world markets. Once that is done, the special export refunds will come into play. They are most beneficial when it comes to exporting cattle. I hope in this respect that the Government will begin to move somewhat faster and further in Europe over the coming weeks.
In Northern Ireland, we have nine slaughtering facilities and two rendering plants, all centrally monitored by the Government. I suspect that they are more tightly controlled than similar establishments here, which are often under the control of local authorities. Ministers can make use of that fact, which shows that we are in a much stronger position than the other parts of the United Kingdom.
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Last year, Northern Ireland exported 54,000 tonnes of beef, which amounted to 28 per cent. of the UK's total exports. Taking that much meat out of the British market would help tremendously efforts to remove the glut of beef.
Time is short this evening, so I will end with a brief word about transmission of the disease. We do not know enough, but we do know—this has not yet been mentioned—that ordinary mice, when their brains are injected with BSE, contract the disease or something mighty like it. Mice into which a human gene has been spliced appear to show much greater resistance. Unfortunately, the mice live only two years, so we do not know whether the infection would eventually develop. If there is increased resistance in such mice, it suggests that the species jump must be more difficult than the general public believe. I hope that much more experimentation will go into that.
I hope that the remarks that have been made, not only in the debate but in the Select Committee, will be heeded. We need to discover whether the source of the infection is sheep or cattle.
9.30 pm
Mr. Rhodri Morgan: I say at the start, like most hon. Members who have spoken, that this is the annual debate on the common agricultural policy, but today it has in general been about BSE. There is no way of avoiding that; it is the issue of the moment.
Most hon. Members have spoken at some time today to members of the National Farmers Union lobby from England and Wales—I am not sure whether it was also from Scotland and Northern Ireland.
Mr. Welsh indicated assent.
Mr. Morgan: It was a lobby of NFU members from throughout the United Kingdom, who came to the House to talk to us, not about the CAP at large, but about BSE. It is relevant to the subject of the debate, because BSE is poisoning our relationships with our fellow member states of the European Union in a way that nothing has done for many years, at least in the agricultural sector.
We welcome the progress, albeit microscopic, that was announced by the Minister of Agriculture, Fisheries and Food in his point of order at approximately 6.56pm, concerning lifting the ban on semen, tallow and gelatine. We hope that that progress will bear fruit on Monday. If, as we hope, the ban is lifted, the farming industry will see some light at the end of the tunnel.
The debate is being held the day after the Government announced the £20 million advertising campaign to restore the feel-good factor, saying:
"Yes it hurt. Yes it worked."
That is a sick joke to most people who work in the beef or agriculture industry. They will wonder where the Government have been living for the past few years, and they will not accept that a great turnaround has occurred. I shall make no comments about other aspects of the economy, but people who work in the beef industry do not think that anything is working. They certainly do not think that the Government have effectively delivered a proper response to the BSE crisis.
The hon. Member for Stamford and Spalding (Mr. Davies), who is not in his seat at the moment, made an outstanding and brutally frank as

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we all should be when we speak in the House of Commons. He described the origins and size of the problem, the responsibility of this country and the responsibilities of other countries to co-operate with us when they feel that objective scientific evidence justifies it.
The hon. Member for Stamford and Spalding rightly said that the United States of America was the first country to ban British beef, as long ago as 1989, and that it was many years before the European Union banned it. One would gain the impression from the public prints and some speeches by Conservative Members that the European Union was the only part of the world to have banned the import of British beef, whereas in fact it did so six or seven years after the USA.
The hon. Member for Stamford and Spalding rightly said that the geographical distribution of BSE shows that the highest incidence of BSE occurs in places where the beef industry is most closely tied up with the dairy industry. That is why there is a south-west to north-east decline in the incidence of BSE. In the south-west of England and south-west Wales, the incidence tends to be quite high, but as one moves northwards towards the specialist beef-growing areas of the north-east of Scotland and Northern Ireland the incidence is less because there is a more specialised beef industry.
That puzzled many of us, but the farmers gave us a reason today. According to them, the dairy industry is savagely competitive, and consequently the feed mills that serve it are savagely competitive as well. In their search for cheaper but higher-protein feeds they undoubtedly broke the rules and used inappropriate material, and that led to the present crisis. Specialist beef producers have probably not been affected, unless they have been unlucky enough to suffer through cross-breeding or the purchasing of animals from another region.
I believe that the highest incidence of BSE in England is in Devon, Cornwall and Somerset, and that the highest incidence in Wales is in Dyfed, in the south-west corner, because rainfall and grass growth is greatest there, and because that is where the specialist dairy herds and beef herds are—the classic beef animal being a Hereford-Friesian cross that has come in from the dairy industry, and whose mother and grandmother are more likely to have consumed the high-protein bonemeal pellets that were used in an attempt to drive up the protein content of milk.
Mr. Beggs: There is no evidence that the problem can be transferred from mother to calf. The hon. Gentleman is right, however, to suggest that more compound feedstuffs will have been used to finish cross-bred cattle.
Mr. Morgan: I was not referring to the possibility of maternal transmission. That is an entirely different issue, which is still the subject of experimentation at Weybridge. I hope that the Minister, or other Ministers tomorrow, will be able to tell us more about that experiment; I asked about it today, but my questions were not answered. The issue is dear to my heart. I hope that the experiment will be completed, and that Ministers will tell us the results when they have them—in the summer or autumn, I believe.
The problems of south-west Wales have been mentioned, and I want to concentrate on Wales. We have already heard several speeches about Welsh agriculture,
1040
but I am sure that many of the points that I shall make have parallels in other parts of the United Kingdom. A big question is how well the Government have handled their new policy on the slaughter of cattle and their removal from the human food chain. The farmers told us today that they had concluded that the Government did not have a clue what they were doing. They go over to Europe and tell people there that they are introducing a scheme, but weeks later the scheme has not been introduced; yet they expect Europe to take it on trust that such and such a slaughter policy is being implemented arid that cattle are already being removed from the food chain. We know, because our farmers are telling us, that that has not happened. Weeks later, a huge backlog has built up on farms of animals that have not yet been processed through a scheme that the Government are trying to persuade Europe that they have introduced.
If our farmers do not trust the Government's ability to implement a scheme in the time scale that they promised, consumers in Germany, France and other European Union countries cannot be expected to have faith in their capacity to implement it. We know that it is not working in this country.
Today we were given a letter from the Minister of State—the only agriculture Minister who is not in the Chamber now—listing the slaughterhouses that would participate in the scheme to remove cattle aged over 30 months from the food chain. It is difficult for us to have much faith in the information, at least as regards Wales. Three abattoirs in Wales are listed, but the National Farmers Union told us today that one is not participating. Geographically, the abattoirs are quite well distributed, but the one that apparently will not participate is located in the area which contains most of the cows that will need to be processed. One is in Gaerwen in Anglesey, which is a fairly important area, and one in Abergavenny in Gwent, near the English border; that, too, is a fairly important area.
The most important area, where almost 70 per cent. of the cows are stacked up on the farms and no one knows what to do with them, is Dyfed in south-west Wales. That area has the highest concentration of BSE outbreaks; we need to take urgent action. We have been told that Oriel Jones in Llanybydder, which has been mentioned, is not participating in the scheme. How much credence is the House to give to the letter from the Minister of State? If we cannot place our trust in it because the slaughterhouse that should be serving 70 per cent. of the cattle is not participating, although it is listed, what are our colleagues in the Council of Ministers supposed to make of it when they look for suitable reassurances? That below-par performance from the Government is consistent with the pattern of performance that we have seen since the beginning of the saga.
Mr. Douglas Hogg: While it is perfectly fair to criticise the Government, I hope that the hon. Gentleman will take into account the possible impact on Europe of inaccurate remarks. As I said earlier, today more than 4,000 cattle have been slaughtered. I hope that we shall soon be slaughtering 18,000 or so a week in England and Wales. It is important not to misunderstand those facts.
Mr. Morgan: I was reporting what the NFU in Wales had told me and other Welsh Members of Parliament today. We were told that the three slaughterhouses in

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Wales—it appears to be only two—had slaughtered a cumulative total of 225 cattle. There are many cattle in Wales; there are 70,000 in the backlog—55,000 of them, we understand, in Dyfed, where there is no participating slaughterhouse. I am therefore not exaggerating the likelihood of there being serious problems; I am simply giving the figures that were provided to us by farmers' representatives, based on their knowledge and the information that they had been given by the slaughterhouses.
I hope that the Minister will refer to the fact that we have no rendering capacity in Wales; we understand from the NFU that there is no such capacity and there is only one incinerator. The incinerator in Haverfordwest in south-west Wales cannot be served by a local slaughterhouse. There are logistical problems in getting cattle to two slaughterhouses in south-east Wales and north-west Wales, then into England for rendering, then back down to Haverfordwest in the extreme south-westerly corner of Wales for incineration. That process will pose big problems for the country roads of Wales throughout the summer. I hope that the Minister can give us some reassurances on that point.
There has been a breakdown of trust in general between the farming industry and the Government. There is also a breakdown of trust between the farmers and the feed mills. The farmers believe that the feed mills poisoned their cattle and caused BSE when the changeover from batch production to continuous feed occurred. At that time, much material was being processed at below the proper temperature and no one did anything about it; it was not regulated or stopped. The farmers believe that it is essential to restore a measure of regulation into the feed mill industry. Until six weeks ago—March 31—it was still possible for infected feed to be introduced from chicken feed, which was still allowed to contain the specified bovine offal. The offal in chicken feed and pig feed was coming—via the same lorries and feed mills—into the food being fed to dairy cattle. That problem has now been solved, but it should have been solved six or seven years earlier.
Why has it taken the Government so long to move towards using the available cold storage that is not in use? What proposals are there to reactivate the redundant slaughterhouses that have been closed in the rationalisation process and thus increase the slaughtering capacity? Are we still in the hands of the rendering industry? Is it setting the agenda for the Government and causing the agriculture industry and the other by-product industries to suffer until it gets its act together?
Will the Government tell us what is to happen about traceability? Will there be a scheme similar to the one in Northern Ireland so that we know exactly when beef animals were slaughtered, what farm and herd they came from and their cross or whatever else needs to be known? Using the Northern Ireland standard of traceability would be a good starting point and would help to restore confidence to the British consumer and to our partners in the European Community. People would know that the Government were not merely talking about solving the problem but were implementing measures—not just planning them—so that when the Minister goes to Brussels and says, "This is what we intend to do next week," it actually happens at that time.
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There has been a series of delays, prevarications and dithering. A breakdown in confidence is apparent throughout agriculture over the Government's handling of the issue. That is why we shall seek to divide the House tomorrow on the issue of how badly the Government have handled the BSE crisis.
9.45 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): The debate has been good in some parts and not so good in others. I am glad to have this opportunity to speak in a debate that was opened so excellently by my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food. In the circumstances, his was a measured speech. I can speak from close experience of his skill and ability and his energy, enthusiasm and emotion. He has fought tenaciously and diplomatically for our best interests in Europe. I know that, because I was alongside him in Luxembourg at the invitation of my right hon. Friend the Secretary of State for Wales.
There was not the slightest doubt that the interests of Wales were fully represented by the Minister, that it improved our representation and presentation and gave us the opportunity for immediate discussions on matters affecting all the countries of the United Kingdom. Not least, we were able to increase our activities at the margins in our contacts with member states. My noble Friend Baroness Denton of Wakefield represented Northern Ireland's interests, and my noble Friend Lord Lindsay had Scotland's interests to the fore. The fact that we have not completely succeeded is not failure. Progress is being made in the context of responses by the Commission and member states, and is a demonstration of the sheer magnitude of the problem of this unjustified ban.
If my right hon. and learned Friend the Minister of Agriculture's opening speech was excellent, we were all greatly disappointed by the hon. Member for Edinburgh, East (Dr. Strang), whose speech might have been more typical of a Scottish Grand Committee, because it seemed to be a north-of-the-border long lament. He made much of this not being the sort of debate that he wanted, and that there was something wrong with the motion. As the hon. Gentleman and other hon. Members know, today is not the only opportunity we have had to debate this matter. The hon. Gentleman could have had a debate on it during an Opposition day if he was so impatient.
If the issue is so important to the hon. Member for Edinburgh, East where was his real contribution? I listened carefully for any positive remarks. He reiterated what he has said at other times and on which there is wide agreement—that it is important to pursue the issue of traceability and the quality assurance scheme. He rightly spoke about what has been done in Northern Ireland but, essentially, it was the typical, negative contribution that we hear so often from the Opposition, especially from their Front Bench. I noticed that the hon. Member for Cardiff, West (Mr. Morgan), who wound up for the Opposition, sought to outdo only his negative contribution.
Mr. Dalyell: My hon. Friend the Member for Edinburgh, East asked specific questions about science, and I asked the same sorts of serious questions. What are the Government doing about the prion problem and the basic science of this issue? That is a serious and straightforward question.
Mr. Jones: I shall try to answer the questions that hon. Members have asked. I know that my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, the hon. Member for Tiverton (Mrs. Browning), wants to address several issues tomorrow.
I like to think that the hon. Member for Edinburgh, East is essentially a nice man. I know that he is aware of the Labour party's problem of being irresponsible on this issue and unfit to govern in general. I prefer to think that he is a nice man, and that he has the awful spectre of the hon. Member for Peckham (Ms Harman) hanging over him—she has done so much to create chaos on this subject.
However, the hon. Member for Peckham is not the only hon. Member to have created chaos in this regard. If hon. Members doubt that, I refer them to what the hon. Member for Carmarthen (Mr. Williams) said this afternoon. The hon. Member for East Londonderry (Mr. Ross) made a necessary intervention on the hon. Gentleman and reminded him to be more temperate in his language, as it was being recorded in Hansard.
I hoped that, when the hon. Member for Carmarthen spoke about the multiplier effect, he would be as conscious as I am of the situation in west Wales and what has happened there as a result of the Sea Empress disaster. Indeed, I imagined that he would be the type of person who would want to put the sticker that I have in my hand on the back of his car. It states, "I'm still eating British beef." I obtained the stickers in west Wales last week from the Pembrokeshire Women's Farmers Union. They are now being displayed on my official car and on my private car. I hope that all hon. Members will take the opportunity to hit home that message.
The hon. Member for Carmarthen talked about the Government going to Europe with contrition and remorse. It was then that I realised that he was being unrealistic. He said that the Government should do that if they were serious about eradicating BSE—in fact, it would be a disservice to the farming community and to Britain in general. My hon. Friend the Member for North Dorset (Mr. Baker) was being sarcastic when he described the hon. Gentleman as a distinguished scientist. When the hon. Gentleman told the House about the number of farmers in his constituency, I thought that his remarks would benefit the Conservative candidate there. He brought home the way in which the Labour party is writing off the rural vote in Wales—and the rural vote elsewhere in the United Kingdom.
Mr. Tyler: Could the Minister spend a few minutes answering the real questions asked by a number of Conservative and Opposition Members instead of indulging in this ridiculous knock-about stuff? I have received a message from an auctioneer who covers Cornwall who said that, this afternoon, he was told by St. Merryn Meat, the local abattoir, that instead of being able to take the cattle it was intending to take, it has had its allocation cut by 300 by the intervention board and the explanation it has been given is that an abattoir is going on-line in Wales. If this is not evidence of yet more confusion today—which is what hon. Members on both sides of the House have been putting to Ministers—what is it?
Mr. Jones: If the hon. Gentleman had not spoken at such length, I would have been able to answer more of the questions asked by hon. Members.
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The hon. Member for Caernarfon (Mr. Wigley) was concerned about the labelling of feed. I confirm that the United Kingdom agricultural supplier trade association has said that major feed compounders will switch to full ingredient listing at the earliest opportunity. I hope that the hon. Gentleman will welcome this initiative, which was mentioned by my hon. Friend the Member for South Dorset (Mr. Bruce).
I shall now refer to the test for BSE. I am advised that Dr. Narang has not published details of his test, nor has he shown its validation by publishing it in a scientific journal. He has not given us any details of the test. However, we are in discussion about providing him with samples so that he can provide an independent demonstration of whether his test works.
The hon. Member for Carmarthen also talked about the deregulation of rendering. The Government did not relax regulations on rendering meat and bonemeal for feed—the decision was taken by the renderers when the consequences of what appeared to be a technical change could not have been appreciated.
Mr. Welsh: Will the Minister give way?
Mr. Jones: The hon. Gentleman has not been present during most of the debate. However, I shall give way.
Mr. Welsh: Is there a test for contaminated foodstuffs? Will the brains of slaughtered cattle be analysed to establish hard evidence of the pathological nature of the disease so that it is a basis for policy and for customer confidence?
Mr. Jones: As I said earlier, the matter is of particular interest to my hon. Friend the Member for Tiverton, who wants to deal with the Weybridge experiment—as it was referred to by the hon. Member for Cardiff, West. As there are only six minutes remaining to me, I must make some progress.
Sir Michael Spicer: The important question of vertical transmission has been raised once or twice during the debate. I understand that important work is going on at Weybridge, but there is other important work as well. It is becoming increasingly difficult to get hold of herd book data—genealogical data—held by the Government. Will my hon. Friend have a word with our hon. Friend the Member for Tiverton (Mrs. Browning) to find out whether there is a problem and whether research in that difficult area is being impeded by officials withholding information? My hon. Friend may not wish to answer the question now, but perhaps our hon. Friend will respond tomorrow.
Mr. Jones: I have been in conversation with my hon. Friend during the day, and she has told me that the work at Weybridge has been accelerated. She has also heard my hon. Friend's comments.
The hon. Member for Edinburgh, East apologised that he could not stay to hear all of my speech. I thank him for agreeing with my right hon. and learned Friend that no contaminated feed is reaching cattle and that compliance is now very good. The hon. Gentleman knows as well as anyone that it is important that the situation is not undermined by the sorts of irresponsible comments that some of his colleagues make occasionally. It is

1045
important for confidence here and in Europe—a point emphasised by my hon. Friend the Member for Stamford and Spalding (Mr. Davies), who also apologised for his inability to remain to hear the winding-up speeches.
The hon. Member for Edinburgh, East said that he shared the Government's commitment to lifting the ban on British beef and beef products. He asked about the prior options review of research establishments. It is perfectly proper that Government-owned scientific laboratories should be reviewed from time to time. No decisions have yet been taken regarding the animal science establishments that deal with BSE and CJD, and the reviews of those laboratories are not due to be completed until July.
The hon. Member for North Cornwall (Mr. Tyler) brought some life into his exchanges with my hon. Friend the Member for West Dorset (Sir J. Spicer) when he told us that he was red-blooded today. He admitted that he had eaten beef—I am delighted to hear it—but I can only imagine that it must have been the rarest of fillet steaks to put red blood into his veins when it comes to matters European. I am glad that he also endorsed the step-by-step approach to lifting the ban.
The hon. Gentleman inquired about the selective cull policy. It has been put to the Commission and we have made it clear that we took that decision in the context of discussions about lifting the ban. As my right hon. and learned Friend said, we have released a consultation document about a mature beef scheme. The consultation period ends on Friday and, naturally, we shall also discuss our proposals with the Commission.
I was very impressed by the concerted action taken by hon. Members who represent Dorset constituencies. There were strong representations from my hon. Friends the Members for West Dorset, for North Dorset and for South Dorset (Mr. Bruce). I understand the indignation expressed by my hon. Friend the Member for West Dorset regarding the hon. Member for Peckham. He was correct to remind us of the actions of the last Labour Government in discouraging milk production.
Mr. Morgan: I have a question about the slaughterhouses. Does the Minister think it wise that
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designated slaughterhouses should deal, on different days, with special cattle under this scheme and with their normal trade? He knows that the supermarkets object strongly to that practice and that they are leaning on the slaughterhouses not to operate on that basis. Does the Minister believe that that is a sensible way forward?
Mr. Jones: I shall deal with that point and with the other issue raised by the hon. Member for Caernarfon. There are presently 96 abattoirs and 213 markets. The scheme began on 3 May, but, because of the constraints of rendering, we had to restrict it initially to 40 abattoirs. The limitations of rendering capacity pose a logistical challenge in administering the 30-month scheme. However, we do not believe that the arrangements are adequate in certain parts of the country.
I am particularly concerned about the situation in west Wales, and we are seeking urgent improvements to the arrangements in that respect. I understand that the abattoir at Gaerwen, Anglesey will begin culling animals from next Monday. There is also provision at Abergavenny and we are served by Shrewsbury.
The hon. Gentleman and the hon. Member for Caernarfon referred to reports that retailers are refusing to buy meat from abattoirs that are operating the 30-month scheme. I am aware of those reports. The daily meetings held by my hon. Friend the Minister of State are designed to deal precisely with such concerns. It is important to remember that we introduced the 30-month scheme in response to a request from retailers. We must now make it work. The scheme's rules, with the Meat Hygiene Service's strict controls, are more than adequate to ensure that only meat from animals under 30 months old reaches the consumer. If the reports are true, I hope that retailers will think again on the issue.
Finally, many hon. Members have said that we should retaliate against other member states if the export ban is not lifted. The Government's objective is to lift that unjustified ban on cattle, beef and beef products in the single market and third countries. We are working hard towards that end and some progress is being made. Premature retaliation is much more likely to hinder—
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

University Funding (Yorkshire)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Knapman.]
10 pm
Mr. Barry Sheerman: I tabled a motion for the Adjournment to draw the House's attention to higher education, especially to the universities in Yorkshire and Humberside because, like many Members of Parliament, I have had an increasingly interesting dialogue with members of the university community throughout the region I represent, especially with those at my local university of Huddersfield. I have had discussions with not only the vice-chancellors, but staff, the Association of University Teachers and all the unions whose members work on university campuses in the nine universities in Yorkshire and Humberside. Increasingly, they drew my attention to something that I in part already knew: the dire position that universities find themselves in.
To put that in context, our university system is one of the most successful aspects of our national life. It has been enormously successful historically, and, compared with our main international competitors, our higher education provision is very successful, but society has dramatically changed over a short period of years. To show that, I need say only that, just before the last war, only about 1 per cent. of people went into higher education; in the 1960s, when I was a student at the London School of Economics, the figure was just over 3 per cent.; and today it is 30 per cent. There has been a dramatic change in higher education in a short period.
Most of that boost of change has come in the past 25 years. I am not making this a strongly party political point, but fast growth has occurred since 1979, in the period of this Government. It would be silly to deny that that expansion has taken place, but it would take place in any society, and under any Government who were faced with the challenges of global competition. Increasingly, this country has had to learn that becoming globally competitive and creating wealth successfully is achieved by the pursuit of knowledge and by turning out highly skilled, highly educated, highly trained people, who can turn their hands to the most innovative processes we know.
There has been a catastrophic decline in the demand for less skilled and unskilled people. As a small boy, I would cycle past a factory, and it would have a sign saying, "Hands wanted", as though brains need not apply. We do not see such signs at a factory gate today.
There is an emphasis on knowledge and higher education. Our university system is the keystone of a wealth-creating society that provides the highly qualified personnel who make us a competitive nation. Our universities have responded magnificently to the need for a highly educated population, the rapid expansion of students and a very fast changing university world.
There are more than 100 universities in the country, and, as I said, nine in the region of Yorkshire and Humberside. Universities dominate whole communities as they never have before. In the old days, there was one major employer in most towns and cities. These days, with the emphasis on small and medium enterprises, the main employer in most towns and cities—and in my constituency—is the university, with its enormous
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complex of buildings in the centre of the town. It is the largest source of wealth in the town, brings more money and jobs into the town, and is certainly the focus of highly qualified individuals. In Yorkshire and Humberside, one in seven professionals work in universities. That is a large number, which has an important effect on our economic, industrial and cultural life.
There are more than 100 universities, and they are enormously important to our well-being and the future of our towns, cities and regions. They are critical not only in the traditional way of providing good education, teaching, tuition and research, but increasingly in the way in which they have responded to the challenge of a proactive relationship with the local community in every sense, and have aided urban, cultural and certainly industrial regeneration. Where that relationship works well—whether in Cambridge, Warwick, Huddersfield, Leeds or Sheffield—it has produced new ideas, innovation, new jobs, new companies, and guaranteed a future for our constituents.
Anyone who has been part, as I have, of a group looking at what our country will be doing for a living in 20 or 25 years' time—in the year 2020, along the lines of the Hamish McCrea book of that name—knows that the university will become not less important or have the same importance, but will grow exponentially in significance. The future well-being of our constituents depends on that.
I said that I wanted to concentrate on universities in Yorkshire and Humberside, because there are problems for our universities. Up to now, I have told a rather good story of expansion, growth, more people undergoing higher education, partnership and the university's dominating role. The background has been a determined and increasing squeeze on resources flowing into the university sector over the past 10 years.
There is no doubt that, in that time, there has been an enormous increase in students but a very small increase in staff. The resources devoted to each student has been squeezed. I would be the last to say that there was no room for economy, and any Government would have expected economies in higher education institutions that take so much of the national cake and national wealth.
On any criteria one can mention—productivity, effort, use of available resources—the universities have performed better and more imaginatively. When I visit them, time and again I see what they have done to maintain standards and quality, not only of the students but of research and of everything else they do, at the same time as increasing the number of students. That can go on for too long.
There has been an increasing feeling in the university community that there can be no further cuts or squeezes on the resources allocated to students and staff. That is a fact. The salaries of university personnel have recently been worse than those for any other profession, even for architects.
I should have declared an interest at the outset because I am still a member of the Association of University Teachers and was a university teacher, "when"—as I sometimes tell some of my constituents, who smile wryly—"I worked for a living." I sometimes think of what has happened to university salaries since I left teaching in 1979. If one extrapolates the salary I was on then, and

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had salaries stayed at that level, university teachers would today be doing very well. The fact is that they have done very much worse.
We can go only so far before we stop getting the right quality of people coming to university, staying on into postgraduate research and then entering the teaching profession. That is the truth, and it is very worrying when one speaks to any vice-chancellor in the land about recruiting and retaining good quality graduates and entrants to the profession. The problem is growing.
The backdrop to the problem is the most recent Budget, because it represented a cut too far. The cuts announced by the Chancellor amazed everyone. I was in the Chamber for it, but I did not realise quite how deep the cuts were. Their depth became apparent in the few days after the Budget.
To do justice to the Chancellor, I do not think that he knew quite what he was doing. I have known him for a long time, and I know that he has a very positive attitude to higher education and is very interested in the university sector. I do not believe that he would consciously have done what he did in the Budget last November, but that he misunderstood what he was doing because of the way in which the facts were presented to him by civil servants and by people in the Treasury. I do not think that he would otherwise have made those cuts.
I should be grateful if, in his reply, the Minister of State will tell us whether he understood how punishing those cuts would be when the Budget was debated, whether he wanted that level of cuts to be made, or whether he fought his corner. Did he know what would happen with, for example, a 30 per cent. cut in capital spending?
There has been not only a new £657 million cut in universities' budget, but a cut of 30 per cent. in capital spending. The Chancellor suggested that that could be made up with funds from the private finance initiative. The fact is that 70 per cent. of that capital spending is used for building maintenance and minor extensions to buildings, and to buy new equipment and new technology. That expenditure is the very stuff that keeps a university running, and it is not the type of expenditure that is appropriately funded by the PFI.
Our universities are very positive about using the PFI. They have long used private finance in a range of building programmes. But the fact is that every vice-chancellor I have spoken to in Yorkshire, Leeds, Bradford, Huddersfield, the Leeds metropolitan area, and—last night in the House—Hull has said that it is not an appropriate way in which to use the PFI. A catastrophe is about to happen in higher education in our country, and that is not an exaggeration.
We have reached the point where teachers can no longer teach and researchers can no longer undertake research, and put their hands on their hearts and say, "We are maintaining the traditional high-quality education of the British university system." One cannot do that without the necessary tools. One cannot even respond to requests from the Chancellor and his colleagues to use modern technology in teaching, and thus reduce the cost of teaching, because one is prohibited from buying the new technology that would deliver that modern teaching.
Overseas students provide 10 per cent. of the income of British universities. They represent an important part of every university budget—for example, they provide £6 million for Bradford university. If that money was
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lost, any of our universities would be in great trouble, and the Chancellor and the Department for Education and Employment would be deeply disturbed. The provision of higher education is subject to global competition, and those making that choice are knowledgeable. Once there is a feeling that our standards are not being maintained, those countries that send so many students here will quickly switch their choice.
I have spoken to university personnel who go around the world doing the marvellous job of selling our courses. They tell me that our tough competitors from Australia, Canada and America are telling people not to send their students to Britain because the quality of education is not as good as it used to be. I am emphatic that that quality has been maintained, but I do not believe that it will be possible to guarantee that as a result of the latest swathe of cuts.
That is why it is so important to ask the Minister to use his influence to reverse the cuts announced in the November budget. He should restore the funding dedicated to capital spending and declare that there will not be another cut next year, followed by another the year after that.
Those cuts have been announced against the backdrop of a freeze on long-term planning for higher education, because Sir Ron Dearing is not due to report until after the next election. I do not agree with my party's philosophy, because I do not believe that we can fight the general election with a significant element of our economy in cold storage. Everyone is saying that we should wait to hear what Dearing says. I think it is healthy for those in a democracy to say vigorously, Dearing or not, that we have to have an expanding, healthy and wealth-creating higher education sector. I must demur from party policy on that.
I should like to conclude by citing a few examples of what the cuts mean to the universities of Yorkshire and Humberside. The higher education institutions of Yorkshire have lost £15.2 million in real terms in their Higher Education Funding Council income for 1996–97; Bradford university has been the hardest hit with a 5.8 per cent. cut; and Leeds faces the largest cash cut of £2.91 million.
According to the economic multiplier used in the work of Professor lain McNicol, who has calculated the impact of cuts on Scottish higher education, the combined effect of the cuts will be a loss of £27.35 million in economic output, and 749 jobs from the Yorkshire and Humberside economy. That reveals how important and disastrous those cuts will be to our local economy.
It is not only the economies of Yorkshire and Humberside that will be dramatically affected by the cuts but that of whole country. We will kill the goose that lays the golden eggs. That is a nice old cliché, but we need greater investment in the university sector to boost new activities such as partnerships with the private sector and to help turn out more highly qualified undergraduates and postgraduates. That is where we will get our professionals, innovators and entrepreneurs. If we do not, we can give up against the competition, because our competitors around the world are investing vigorously in higher education.
The Minister and I both know that there are some hard choices to be made in higher education. Comparisons with Europe show that higher education does not do badly in its share of the cake, but we get the balance wrong. I would be the first to admit that the balance in Britain means that students get too much of the cake and

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institutions too little. Whichever party is in government after the next general election will have some hard choices to make about how to meet that challenge.
I suspect that it is inevitable, as night follows day, that we will adopt some sort of income-related loan scheme. When students have finished their education, are in employment and have reached a reasonable level of income, they will start to pay back what their country has invested in them.
I have tried to be honest about the challenges we must face, and I hope that the Minister will respond in an equally positive way and say that he will work with the vice-chancellors and university staff to pressure the Chancellor to draw back from the cuts that have been set in hand before it is too late.
10.21 pm
The Minister of State, Department for Education and Employment (Mr. Eric Forth): I congratulate the hon. Member for Huddersfield (Mr. Sheerman) on obtaining this debate on what we would readily agree is a most important subject. I welcome much of what he said. He speaks with knowledge and experience of the sector, as was clearly shown by his remarks.
I join the hon. Gentleman in welcoming and acknowledging the success of the higher education sector in several respects in recent years. He referred to the domestic and international success of our universities, which are widely known and understood. We are somewhat in awe of the way in which the higher education sector has responded to the challenge of the huge expansion in the number of students, from about 3 per cent. of the relevant cohort in the 1960s to some 30 per cent. now. He was kind enough to acknowledge that higher education expenditure per pupil is as high in Britain as it is in most European countries.
I was slightly intrigued when the hon. Gentleman expressed his preference for an income-related loan scheme, because we already have one—the student loan scheme. To use an over-used and misunderstood expression, it is an income-contingent scheme in the important sense that our graduates do not start to repay the money they have borrowed until their incomes reach 85 per cent. of the average, which is in line with the much-vaunted Australian scheme. The repayment period is not much different from that in Australia. I mention that to illustrate that we are not much out of line with international experience.
I do not want to be tempted too far down the route that the hon. Gentleman boldly took when he hinted that he wanted elements of tuition fees to be paid by students as well. That is a debate still to come, and one which will rightly be led by the Dearing committee of inquiry.
I can understand the hon. Gentleman's frustration about that, but the truth is that the Government set up the committee of inquiry with the Opposition's full support. We have not had a proper, systematic, impartial review of higher education and its role in society for a generation now, since Robbins. There is a consensus that that is the right thing to do.
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Where I begin to part company slightly with the hon. Gentleman is when he suggests that somehow higher education is the sole custodian, and should be the sole deliverer, of our requirement as a competitive trading economy to develop our skills and knowledge. That was the implication of what he said.
Of course higher education has a key, crucial and central role in that, but not an exclusive one. We must look increasingly to further education, to the development of technical skills, to modern apprenticeships, and to the range of different qualifications that we will increasingly have to offer not just our young people but people of all ages in the lifelong learning context.
Although universities will obviously have a key and important role to play in that, it will not be to the exclusion of the other important elements in the education process—our schools, sixth forms, and further education colleges—which do such a marvellous job and which will increasingly be asked to dovetail with what higher education is doing.
Sir Irvine Patnick: As my hon. Friend is more than aware, it was after a meeting with the vice-chancellor of the university of Sheffield when I heard of his concerns that I facilitated a meeting with my right hon. Friend the Secretary of State for Education and Employment, at which my hon. Friend was present. Have any further meetings taken place on that, and is anything being done to allay the fears that the vice-chancellor expressed at that meeting?
Mr. Forth: I thank my hon. Friend for arranging and facilitating that meeting, which was important, and which took place at a key time in the period following the Budget changes to which the hon. Member for Huddersfield referred.
I can assure my hon. Friend that there are on-going discussions with the Committee of Vice-Chancellors and Principals—so ably led by the vice-chancellor my hon. Friend brought to see my right hon. Friend the Secretary of State—in order to cover the points that the hon. Gentleman made about the concerns that I well understand in higher education, following the somewhat dramatic changes in the Budget last November; in order to identify the true impact of those changes and, in particular, to what extent the private finance initiative can effectively replace the reductions in taxpayer funded capital expenditure; and to identify them sector by sector, institution by institution, and often, where relevant, faculty by faculty.
The hon. Gentleman was right to point out that we cannot expect the PFI in a uniform sense to step in and deal with every contingency in the same sort of way. There will be a real difference in the extent to which the PFI can effectively replace taxpayer funding, particularly on the capital side.
Mr. Richard Caborn: When that exercise has been carried out, if the cuts that have been explained by the vice-chancellors are as draconian as they say, will the Chancellor revisit the whole question of the cuts that were announced in the 1995 Budget?
Mr. Forth: I shall not pre-empt or try to guess the outcome of the discussions and the investigations. I am

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not sure whether Opposition Members are making a spending commitment and saying in terms that, were there to be a Labour Government, that Government would fully restore the level of taxpayer funding that existed before. It is a fair question. There is no point in creating a great fuss about cuts or reductions without saying what one would do about it.
We are now looking, with the CVCP and the institutions, at the extent to which the PFI can step into the breach and make good the changes that have been made. That is bound to vary enormously from one institution to another. But it is incumbent on Opposition Members—not tonight, but at some time in the future—to say what they think should or could be done in the context of the constraints laid upon them by their hon. Friend the Member for Dunfermline, East (Mr. Brown).
Mr. Sheerman: But is not the real problem the fact that, when one caps university entrants and says, "No more students," one is dealing with a non-dynamic
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economy in the university sector, and that makes it so much more difficult to manage the cut made in November?
Mr. Forth: When the hon. Gentleman comes on to the number of students, he is opening up all the matters at which the Dearing committee will have to look in considering the purpose, shape, size and structure of the higher education sector. Inevitably, that will bring in the appropriate size of the cohort, the proportion of the cohort, that goes into higher education and how that is funded.
I share the hon. Gentleman's view that ways will have to be found if it is in the end concluded that many more people have to go into higher education to fund that. The Government of the day will have to face that squarely. I am convinced that they will be guided by the Dearing committee in what they do, and there is no point in us today trying to imagine what that committee will conclude.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.