HC Deb 10 February 2000 vol 344 cc385-90
1. Miss Anne McIntosh (Vale of York)

What discussions he has had with the European Commission on approval for state aid to restructure the UK pig industry. [107878]

5. Mr. David Tredinnick (Bosworth)

What recent discussions he has had with the European Commission concerning aid for UK pig farmers. [107882]

The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown)

My officials and I have held several discussions with the European Commission on the difficulties faced by UK pig producers. The most recent discussions were on Monday 24 January and on Tuesday 1 February.

Miss McIntosh

I have come without my chocolate eclair—I shall save it for other purposes. Will the Minister confirm that he has spoken to the Commission, following the Prime Minister's undertaking to the National Farmer Union last week? The Prime Minister said: I do not rule out further measures to help. But it must be linked to a strategy that provides a long-term framework. I have received correspondence from the Commission that shows that the Commissioner is waiting to hear from the Minister that the type of aid—[HON. MEMBERS "Oh!"] I am prepared to put correspondence in the Library to show hon. Members that the Commissioner is on standby, waiting to help.

Pig farmers have had to replace all their units to comply with the sow stall and tether ban. They have also had to pay more than £80 million a year—more than £5 a week a pig—on a BSE equivalent tax. The Government are allowed to apply for state aids. Will the Minister confirm to the House that he has done so?

Mr. Brown

I am afraid that the hon. Lady completely misunderstands the position. Discussions with the Commission on the difficulties in the pig sector have been continuing for some time. I have been trying to find a way through for the sector, in order to keep it operating. Any room for manoeuvre that the Commission may have—although that has not yet been settled—will be in restructuring. That is rather different.

The burdens that I am asked to lift are to do with offal disposal—to put some extra money into the industry as an operating aid. As we have often pointed out, the big difficulty with that is that it would be viewed by the Commission—certainly by other member states—as an economic aid to the industry. If we had intended to provide such assistance because of BSE, which underpins the restrictions in the UK, we should have done so in 1996.

Mr. Tredinnick

Is the right hon. Gentleman aware that, a year ago, there were 470 pig farmers in the east midlands and that 70 of them have ceased trading? Is he further aware that what really angers the pig farmers is that the Belgian Government were able to obtain compensation for controls against dioxin in animal feed, but our farmers are suffering, in effect, a BSE tax? Does he not think that it behoves his Government to consider how the Belgian Government received money, while he has been unable to do so?

Mr. Brown

The hon. Gentleman makes the same error as the hon. Member for Vale of York (Miss McIntosh). He is confusing two separate issues. Aid for restructuring the industry—as was given to Belgium—means taking out capacity and—[HON. MEMBERS: "Oh!"] No Minister has ever underplayed the difficulties in the sector. We have been trying to find constructive ways to get the sector through the difficulties. In effect, the hon. Gentleman is arguing for aid to close it; that has never been our objective.

The key issue, as I told the hon. Member for Vale of York, is the cost of offal disposal. The hon. Gentleman will be aware that I have twice been back to the Spongiform Encephalopathy Advisory Committee to try to find a way of getting back the commercial value for offal that existed before the restrictions were enforced. I have twice been turned down by SEAC. The Government have to act on professional advice in this matter.

The other issue is whether we can find a form of operating aid that would be acceptable to the EU. We have been trying to make progress with the Commission on that proposition—but not successfully.

Mr. Dale Campbell-Savours (Workington)

Are we being hampered, in our requests for state aids and in my right hon. Friend's negotiations, by the fact that, over 18 years of Conservative Government, the Conservatives argued repeatedly in the Commission against any form of state aid to any form of agriculture in western Europe? They repeatedly adopted that position, and now they have done a complete somersault and placed us in a very invidious position.

Mr. Brown

I think that we would have been on much stronger ground if we had agreed to pay some form of state aid to the pig sector when the original restrictions came in, because of BSE, in 1996. The hon. Member for South Suffolk (Mr. Yeo), the Opposition spokesman, has confirmed to the House that such aids were not paid then because it was believed in 1996 that the industry could bear it. Having said that, he is effectively saying that any payment now would be an economic intervention—which is precisely what the Commission says back to us, when not allowing us to make any such payment.

Mr. Dennis Skinner (Bolsover)

Who took us into this lousy Common Market? In October 1971, the Tories took us into the Common Market. When we had a referendum in 1975, I went round Bolsover and many other areas, asking the farmers to support us to get out of it. What happened? Sadly, the farmers had been kidded on by the newspapers supporting the Tory party and all the rest, which were saying, "There will be money for you in the Common Market." The pig farmers, those dealing with cows and all the rest of them would not listen to people like us, and the net result is that they have got it round the neck.

I am fed up to the back teeth of listening to these Johnnys-come-lately who voted for the Common Market, for the Maastricht treaty and for the Single European Act and got us into this almighty mess, and who are now standing on their political heads.

Mr. Brown

My hon. Friend is right to chide the parliamentary Opposition for their views on Europe. It is true—[HON. MEMBERS: "Oh!"] I said, "For their views on Europe." Hon. Members should listen carefully before going "Oh!" It is true to say that the common agricultural policy, as structured, does not work well for British farmers. That is why the Government strive for reform and have made more progress on it than anyone else ever did.

Mr. Colin Breed (South-East Cornwall)

What discussions has the Minister had with the Treasury in respect of funds that may be made available for state aid to the pig industry? Is there any underspend in his budget in respect of BSE-related expenditure?

Mr. Brown

There is no underspend in my budget that I could use to provide an emergency aid package for the pig sector. Extra support for the pig sector would mean a call on sums of money that are not contained within my Department's budget. Discussions of moneys that are to be spent on supporting agriculture continue with the Treasury, but the sum of money that can be spent is finite and I certainly have nothing new to announce to the House today.

Mr. Mark Todd (South Derbyshire)

In a conversation earlier this week, Mr. Fischler made it absolutely clear to me and some of my colleagues that there was no prospect of state aid related directly to the £5.26 additional BSE burden, and that the only prospect lay with short-term assistance focused on capacity reduction for restructuring.

Is that the Minister's understanding, and would that therefore suggest that we must look carefully at a package of that kind and also at lifting the restrictions imposed by SEAC?

Mr. Brown

My hon. Friend has accurately explained the position, although I do not draw quite the same conclusions. I have been trying very hard not to close the door on any avenue that might work. I have repeatedly told the House that getting state aid clearance from the Commission on providing assistance on the offal disposal measure was always going to be incredibly difficult; but I have been trying hard not to close the door on that.

Mr. Michael Jack (Fylde)

As we stand in the House at the moment, there are pig farmers outside fighting for the very future of their industry. They deserve our support. The hon. Member for South Derbyshire (Mr. Todd) has retailed only part of the conversation, which I also heard, with Commissioner Fischler this week. In that conversation, he made it absolutely clear that he was awaiting proposals from the United Kingdom Government, perhaps of an innovative nature, dealing with restructuring and measures to improve the efficiency of the industry, but none had been received by Tuesday of this week. For the sake of those pig farmers in Parliament square, will the Minister tell us when he will come up with a proposal to help save their industry?

Mr. Brown

The right hon. Gentleman obviously was not paying attention to the earlier exchanges. We have been exploring how best to use the limited sums of public money available to help the industry get through. What he is now advocating—I should be interested to hear whether it is the official position of the Conservative party—is a package to restructure permanently, by which he means downsize, the industry. That is something quite different.

Ms Sally Keeble (Northampton, North)

Does my right hon. Friend agree that some of the problems in the pig industry resulted from the collapse of a particular market that the British pig industry used to have? Can he confirm that, when he does put forward proposals to the European Commission, they will be about the long-term sustainability of the pig industry and will not result in the problems that we have seen in other sectors of the agriculture industry, where short-term gain and proppings-up have made the industry dependent on subsidies from Europe in a way that is not in the long-term interests of the industry as a whole, or of individual farmers?

Mr. Brown

The support that the industry can receive from the European Union is export refunds and aids to private store. I have asked the Commission to make use of those instruments, but, because of the broader European scene, it has declined to do so. However, we have made that request.

As I have said repeatedly, the public moneys that are available for that purpose are limited and I would rather use what public moneys are available to get the industry through and closer to the marketplace. That is why I announced at the NFU conference the use of the extra moneys behind the meat livestock promotion campaign and other pig industry-related marketing initiatives.

That is the way to get the industry through its problems. I am not persuaded by those who say that we should try to get some public moneys to close the industry. That now seems to be the view of the Opposition.

Mr. Tim Yeo (South Suffolk)

Last July, the Minister promised that he would write to all public sector purchasers, but he did nothing for four months. Before Christmas, he promised to end the scandal of fraudulent labelling that allows foreign pigmeat to be described as British, but he refuses to support the honesty in labelling Bill. Last week, the Prime Minister promised help for pig farmers, but the Commission has confirmed that no request has even been made by the British Government for such help. Meanwhile, pig farmers are restructuring themselves by going out of business. Is the Minister too busy writing scripts for "The Archers" to realise that his failure to act and his weakness are driving hundreds of pig farmers out of business every month and forcing British consumers to eat more pigmeat that has been produced under inferior animal welfare conditions?

Mr. Brown

This is pretty poor stuff. We have heard about the letters to support the industry. They are part of a Meat and Livestock Commission campaign that has been co-ordinated with it. There has been no unreasonable delay in my Ministry sending the letters. [HON. MEMBERS: "Oh!"] Let me try this again, although you will be familiar with the argument, Madam Speaker, having had to listen to it on at least three previous occasions. The letters were part of a co-ordinated campaign with the Meat and Livestock Commission. I had hoped that it would be a campaign that would unite Parliament and that everyone would get behind our domestic producers. However, all the Opposition seem able to do is to snipe, to make jokes and to say that things should have been done differently or should have been done more speedily. What they do not do is come up with constructive suggestions of their own. I notice that the hon. Gentleman, who speaks for the Opposition, did not confirm whether it was now the Opposition's policy that Her Majesty's Government should approach the Commission with a scheme to downsize the industry. Is that the hon. Gentleman's policy, or is it not?

Mr. Tony McWalter (Hemel Hempstead)

Does my right hon. Friend agree that the best aid that the pig industry could receive would be to have a proper system of labelling? At the present, one rifles through a supermarket's bacon counter where one sees "Wiltshire cured" written in extremely large letters on the packets. However, in tiny letters underneath, it is made clear that the bacon has nothing to do with the British pig industry. I hope that my right hon. Friend will view as a matter of urgency the need for real changes, so that those of us who support the better welfare system that British pigs have are given every opportunity to exercise our consumer choice without the difficulties that we encounter.

Mr. Brown

My hon. Friend is absolutely right. I have issued tough new guidance—because that is within my competence—to trading standards officers. I hope that they will make use of it through the courts to ensure that labelling on the origins of livestock products is not misleading. That is particularly important in the pork sector.

The legislation introduced through the private Member's route is clearly designed to skirmish with the European Union, whose competence labelling is, rather than to solve any problem that is faced in the United Kingdom.