HC Deb 29 July 1998 vol 317 cc346-54 1.30 pm
Mr. Christopher Gill (Ludlow)

I preface my remarks by declaring my interests. My financial interests in the pig industry are recorded in the Register of Members' Interests, of course. I have initiated the debate in my capacity as president of the British Pig Association.

By common consent, the British pig industry is in a parlous state. I shall set out the industry's not inconsiderable achievements, summarise the main problems currently affecting the industry, and suggest how Ministers might help to ensure a viable future. I draw Ministers' attention to the high level of interest generated by the debate, as evidenced by the large number of pig industry representatives in the Public Gallery.

Mr. Deputy Speaker (Mr. Michael J. Martin)

Order. I would not want the hon. Gentleman to make any reference to anywhere outside the House.

Mr. Gill

I beg your pardon, Mr. Deputy Speaker.

I am pleased that, notwithstanding the awkward time of the day, many of my hon. Friends are present, including my right hon. Friend the Member for Wealden (Sir G. Johnson Smith), who has brought to my attention the problems faced by his pig producers; my hon. Friend the Member for Beverley and Holderness (Mr. Cran), who has a large pig population in his constituency; my hon. Friend the Member for Mid-Worcestershire (Mr. Luff), who is the Chairman of the Agriculture Committee and has brought to my attention the unfair competition that pig producers are experiencing as a result of the United Kingdom having higher welfare standards than other parts of the European Union; my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice), who is on the Front Bench; my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer); my hon. Friend the Member for North Norfolk (Mr. Prior), who tells me that some of his constituents are contemplating, if not already carrying out, the gassing of in-pig sows because the situation is so serious and they see no future; my hon. Friend the Member for Mid-Norfolk (Mr. Simpson), who instances pig producers losing up to £25 per head on the pigs that they produce; and my hon. Friend the Member for New Forest, West (Mr. Swayne), who has sent me correspondence from one of his constituents, who says that he is not likely to survive the present crisis beyond September this year.

Mr. Jimmy Hood (Clydesdale)

Will the hon. Gentleman give way?

Mr. Gill

No, I shall not give way, as I have much to say and little time to say it.

The hon. Member for West Tyrone (Mr. Thompson) has asked me to instance the acute problems of the Northern Ireland pig industry, which have been exacerbated by the destruction of 40 per cent. of Northern Ireland's pig slaughtering capacity as a result of the recent fire at the Ballymoney pig abattoir.

Mr. Hood

Will the hon. Gentleman give way?

Mr. Gill

No.

The UK pig industry is not a subsidised industry; nor does it want to be. One of the industry's proudest boasts is that what it has achieved, it has achieved by its own efforts. It has responded magnificently to customer demand for a consistent, healthy, lean and nutritious product. It has adopted the highest animal welfare standards in the world. It has instituted farm assurance schemes to authenticate the welfare and quality standards that customers increasingly demand. The industry itself is auditing those schemes to demonstrate its total commitment to high standards and traceability.

The UK's genetic base makes it pre-eminent in the world as a source of breeding stock, which is exported to the four corners of the globe. In spite of all the difficulties, exports of pig meat this year are likely to be twice the tonnage exported in 1993, which was 100,000 tonnes.

Until now, the pig industry has been a success story, making no demands on the public purse; making the UK self-sufficient in fresh pork and 50 per cent. self-sufficient in bacon; contributing substantially to the balance of payments; and creating employment in the countryside, in the processing industry, in the ancillary industries and in manufacturing industry. Clearly, it is in Britain's national self-interest to keep the industry going, but it is in crisis, and it needs help.

Chief among the industry's problems are the weakness of continental currencies, which self-evidently makes imports highly competitive; the high cost of UK feedingstuffs, relative to other countries that continue to feed meat and bone meal; and the burden of additional costs incurred as a result of adopting the highest possible welfare standards. I remind the House that, from 1 January next year, sow stalls and tethers will be a thing of the past in the UK, but not in continental Europe, which will put us at an increasing competitive disadvantage.

Other difficulties facing the industry are the ever-increasing costs of meat inspection and offal disposal, and the escalating cost of road transport, to which there is no alternative for the meat and livestock industry.

There are various ways in which the Government could help. They could follow the commendable example set by the House of Commons Refreshment Department. I quote from a written answer that appeared in the Official Report on 20 July, when the hon. Member for Wolverhampton, South-East (Mr. Turner), the Chairman of the Catering Committee, reported that the procurement of fresh meat and poultry will be only from sources approved under an accredited 'farm assurance' scheme".—[Official Report, 20 July 1998; Vol. 316, c. 406.] That example should be made applicable to all Government and local authority contracts.

By making all imports subject to the same feed, health and welfare requirements as domestic production, Ministers would strike an important blow for the future well-being of the British pig industry.

The Government could help further by giving encouragement to the rendering of exclusively pig offal in plants dedicated to that purpose, with the end product being exported or sold to the poultry industry, where I understand that it would be welcome. That would create value in a part of the animal which, through no fault of the pig industry, has been made worthless by the offal ban. Offal is banned from being used in animal feedingstuffs because of the problems associated with BSE, but there is no evidence of BSE in the pig herd. It is unfair that the industry is penalised because that offal cannot be used.

The Government should adopt a self-denying ordinance that neither the Ministry of Agriculture, Fisheries and Food nor any other Government Department, will impose any further cost burdens on the livestock industry, unless it can be clearly demonstrated that imports are bearing the same level of overheads.

As for transport, the new Labour Government have increased the rate of duty on diesel fuel by no less than 22 per cent. since coming into office on 1 May last year. Higher duty in this country combined with much higher vehicle licence fees than those in continental Europe mean that the cost of producing a kilogram of pork in Britain is about 2.6p higher than on the continent. That is purely on account of the higher cost of transport in the United Kingdom occasioned by higher road licence fees and the higher duty on diesel oil.

Equally important, the Government could help the industry by using their best offices to cajole and persuade caterers and retailers to sell only pork and pigmeat products that meet the high welfare and quality assurance standards of home-produced pigmeat. Given that Safeway, for example, has given an assurance that all its pork is United Kingdom-sourced, I trust that it will not prove too difficult to get other retailers to make the same commitment. I would not wish Ministers to underestimate the influence that they can have on caterers and retailers of British pork. I hope that, in responding to the debate, the Minister will undertake that responsibility.

The Government could help also by changing the legislation that prevents products being mandatorily labelled with the country of origin. Many pig producers feel strongly that it would be a great step in their best interests to see all British pork labelled clearly as British. By the same token, it would be helpful if the British public were able to see where pork was not British and from where it was imported. They could then exercise customer choice. As Ministers will appreciate, under the rules of the European Union there is no means by which that sort of labelling can be made mandatory, but it is an area that we need to revisit.

I ask the Government to leave no stone unturned in helping exporters to take advantage of whatever financial assistance the European Union provides in the way of export refunds, export restitution, export credits or whatever. That sort of help would be of positive assistance to the industry. Finally, the Government could help by initiating research into alternative uses for meat and bonemeal, and helping to regenerate the market for tallow.

With the spot price for pigs at its lowest this decade, pig producers are desperate for hope. Hope is an important thing to us all; we need to have hope for the future in whatever career we pursue. All things being equal, I have no doubt—I hope that the Minister has no doubt—that the British pig industry can compete with the best. However, if the industry is to survive, it urgently needs a signal of confidence. The alternative—I know that the message will not be lost on the Minister—is a high-welfare but decimated pig industry, and that would be in nobody's interests—not those of the country, the industry, the retailers or the consumers. I venture to suggest that it would not be in the Government's interests, either.

Pig farmers stopped producing fat years ago, but I trust that the Minister will recognise that such fat as they had on their own backs has long since gone. Previous years' profits have all been reinvested for a welfare-friendly future, in line with consumer preferences and legislation. The entire industry is now looking to see what Government are willing to do to help, and I look forward to the Minister's response.

1.43 pm
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley)

The situation facing the pig industry is a matter of concern for the Government. I think that that concern is demonstrated by the fact that I have been joined by my right hon. Friend the recently appointed Minister of Agriculture, Fisheries and Food and by my hon. Friend the Minister of State. We discussed the situation this morning. As I have said, we are concerned about the situation that is facing the industry.

The hon. Member for Ludlow (Mr. Gill) put the case for the pig industry well and knowledgeably. As he will know, it goes through periodic cycles. It is now in a down cycle, but there is no doubt that, in terms of the down cycles that it goes through, this is a particularly bad one. There is certainly major concern about prices.

The issue is not one for the United Kingdom pig industry alone. It is a European situation. Pigmeat prices have fallen by 25 per cent. on the continent as well as in the United Kingdom.

I whole-heartedly endorse the points made by the hon. Member about the UK pig industry. As he rightly says, it is an unsupported sector of agriculture. It has always operated within its own markets. It has not asked for financial support. It is a very successful industry, which has increased market share within the UK in all sectors of pigmeat. It has been very successful in relation to welfare standards.

We need to pay tribute to what has been done in the industry. The improvement in welfare standards—the phasing out of sow stalls and tethers—is being brought about by UK legislation. I know from my contacts with the industry—I have a constituency interest in the matter—that it wants to go for the highest welfare standards. It has invested at its own cost in high welfare standards, and that deserves to be recognised.

Much attention is focused on the quality of the product. It is a fact that we do not feed meat and bonemeal to pigs in the UK, while it is still legal to do so on the continent. That is something that not many people know about. It is not only an issue of high quality standards but one of high welfare standards. That needs to be recognised.

Mr. Paul Tyler (North Cornwall)

I entirely endorse the point that the Minister is making, but surely the point is that, in relation to both feed and welfare standards, the improvements that we are seeing in this country, of which the industry is rightly proud—although concerned about costs—are not only not being matched by our continental partners: they are not even moving in the same direction. Does the Minister accept that the speech by the hon. Member for Ludlow (Mr. Gill) could have been made about two years ago in that respect? The sad thing is that the previous Government never tackled the problem of the uneven playing field.

Mr. Morley

There is a great deal of truth in that. However, some continental producers have voluntarily introduced the same welfare standards that apply in the UK. They have been concerned about losing market share in the UK because of the growth of quality assurance and welfare schemes here. I shall touch on that in a moment, because I think that it is important.

I emphasise that support, and reassure the hon. Member for Ludlow—I think that he knows this—that all of us as a ministerial team, at every opportunity in recent weeks, have taken the opportunity publicly to emphasise the high standards of the UK pig industry and the fact that British consumers want those high standards. We know that. They can have those standards and support the investment that has been made by supporting the UK industry through their pockets and their buying policies at the supermarket shelves.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

Will my hon. Friend therefore lead a campaign to involve supermarkets in country-of-origin marking, which they could do, which would transform the situation and get rid of the surplus of pork?

Mr. Morley

My hon. Friend is right. I shall come to that point, because it is something which I want to address.

The issue is what we can do in supporting the industry. As I was saying, as a ministerial team we emphasise that. I recently held a press conference at the East of England show, in which I concentrated on supporting the UK industry. I drew the public's attention to the points that have been made. I spoke at a seminar on freedom food, which was attended by most of the main retailers in this country. Again, I emphasised that the standards we want to see, and the public want to see, are being maintained by the United Kingdom pig industry, but that they can be undermined by cheaper imports from countries with lower standards. Those retailers have the power to do something about that through their buying policies.

I emphasise that my colleague, Lord Donoughue, recently hosted a successful seminar with the catering industry, which is a big outlet for pigmeat in this country. We want to ensure that the seminar is not the end of our contacts with the industry, or of our efforts to promote them, but the start of efforts to encourage caterers and processors to source more pigmeat from the United Kingdom.

Mr. John Gummer (Suffolk, Coastal)

Given that the industry writes so much on menus—everything is "morning picked" and the like—will the Minister ask whether it would be sensible to make clear the ways in which British pigmeat is welfare-friendly? One in four meals are eaten outside the home, so putting that on every menu would remind diners of the advantage of eating British-produced pork.

Mr. Morley

I agree, and hope that the industry notes those comments. They also apply to British veal, which is also produced to high welfare standards.

I note the particular problem in Northern Ireland, to which the hon. Member for Ludlow referred. The fire at the Lovell and Christmas bacon factory at Ballymoney has caused extra problems for the Northern Ireland pig industry. My colleague, Lord Dubs, rang me this morning to express his concern. He is holding discussions with the industry in Northern Ireland, and is trying to assist it with that problem.

Mr. William Thompson (West Tyrone)

May I emphasise the critical situation in Northern Ireland? Many farmers cannot get their pigs away; the backlog is building up, and the pigs are getting heavier and heavier. Those farmers who can get their pigs away are getting a bad price.

Mr. Morley

I understand. The hon. Gentleman draws attention to the problem that is being faced in Northern Ireland; Lord Dubs is talking with the industry, and exploring ways in which it can deal with it.

The hon. Member for Ludlow asked me to consider a list of issues, and I shall deal with them in some detail. First, on buying policy, central and local government can have a significant impact, but they are restricted on sourcing, price and value for money by certain rules, some of which were introduced by the Conservative Government in 1988. That can make it difficult when cheaper imports are available. The hon. Gentleman will know, however, that we have already made representations to the Ministry of Defence, which is a major buyer of beef.

I am glad to report that considerable progress has been made in getting Departments to source more from United Kingdom producers. Local authorities want to do the same, within the restrictions they face. I am sure that the issue will be considered.

The hon. Gentleman mentioned applying similar standards to imported pigmeat. We want welfare, quality and traceability standards to be raised in the European and international contexts, and are pursuing those issues through the European Union. I do not think that the hon. Gentleman was arguing that we should allow imports produced at lower welfare standards to drag us down to the lowest common denominator. He would not want that, and nor would the industry, but imports are a concern in respect of competitiveness, and we take that into account.

Mr. Gill

So that there is no misunderstanding, it is far more important that we drag others up to our standards, so that we can compete on the so-called level playing field.

Mr. Morley

Absolutely—there is nothing between us on this issue. We are pursuing improved standards in the European and international contexts as well as in the United Kingdom context.

On the hon. Gentleman's third point—dedicated offal rendering—I can give him an assurance that I will take his suggestion away for discussion with officials, and within the industry, to discover whether there is any scope for pursuing it.

Fourthly, the Government have to take into account the impact of cost overheads on all agricultural sectors, and all sectors of industry. We do that in the context of our national priorities and decisions. We also support industry: we doubled capital allowances to help all producers who are making capital investments.

We take seriously the hon. Gentleman's fifth point, on urging United Kingdom-sourced meat from retailers. We meet the heads of the retail chains regularly, and I can assure him that we will raise the matter with them. We also want to ensure that there is adequate labelling in that respect. We are pursuing through the EU a new directive on labelling to achieve stronger powers on common standards, which would give consumers more information, especially about the source of meat, when they are making consumer choices.

My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) referred to labelling. At present, supermarkets can voluntarily introduce such standards and labelling. They have introduced quality assurance standards, and some have introduced freedom food labelling. I strongly support that approach, because it benefits United Kingdom producers. Although our producers can meet the high standards that consumers and retailers want, that would be undermined if cheaper, lower-quality and lower-standard pigmeat were imported after we had encouraged them to meet those standards and introduce their own quality assurance schemes through farm-assured British pigs.

That decision is obviously for supermarkets and retailers to make, but I hope that they listen to what has been said in the debate. The Government are saying that our industry has the highest standards in Europe, if not the world, and that should be recognised in terms of sourcing. Consumers need information so that they can make an informed choice and support the industry.

Promotion is an important area. The comprehensive spending review settlement will be announced today, and more money for promotion will be made available to Food From Britain. Its budget was frozen by the previous Administration, but we believe that marketing is important, and we intend to give it increased support wherever we can.

One of the most important things we can do in the short term to assist the industry is to discuss market support with the European Commission. I can tell the hon. Gentleman that we have already asked it to take urgent emergency action because of the crisis facing the United Kingdom industry—and, indeed, the European industry.

I am informed that a decision on what the Commission can do to improve market support is likely to be taken tomorrow. I hope that the announcement will bring some comfort to the pig industry, given the particular problems that it faces, and that the hon. Gentleman realises that we are taking what action we can, within the restrains under which we operate and the limits of our own powers, to support the industry.

I come back to my original point: when the industry has gone through its periodic down cycles, it has never come to the Government with its hand out. It has always invested and planned, identified its own customer base, and been successful. It has also recognised the concerns about welfare standards, and is working with us to improve welfare across the board. We recognise that it is ahead of European producers in the abolition of sow stalls and tethers; although that is a cost disadvantage, it will not be a marketing disadvantage, as long as retailers keep their side of the bargain and keep faith with the industry, which has invested and constructed itself in the way that I have described.

The attendance today of hon. Members from all parts of the House shows the concern about the problems being faced by the industry. Earlier today, I met a pig industry delegation led by Ben Gill and John Godfrey, and gave assurances similar to those that I have given to the hon. Member for Ludlow. I hope that the industry will survive this down cycle; it certainly deserves to, given its efficiency, its record and the way in which it has succeeded in the past. The people of this country can be proud of its product.

It being 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.