COMPENSATION FOR EXISTING BUSINESSES

HC Deb 28 June 2000 vol 352 cc984-1016

Mr. Moss

I beg to move amendment No. 5, in page 3, line 14, leave out from "authority" to "by" in line 15 and insert "shall".

Mr. Deputy Speaker

With this it will be convenient to discuss the following amendments: No. 6, in page 3, line 20, leave out from beginning to "in" and insert "The scheme shall".

No. 7, in page 3, line 20, after "particular", insert— 'set up an independent advisory body in accordance with Schedule (Independent Advisory Body) to advise the appropriate authority on all aspects of the scheme. (2A) The independent advisory body shall in particular—'.

No. 8, in page 3, line 29, after "claims", insert—

'(2B) In determining its recommendations on compensation to the appropriate authority the independent advisory body shall include provision for

1. (a) the payment of reasonable professional fees for advice for persons making claims,
2. (b) the payment of interest to be calculated on a compound basis on the total of agreed final settlement payments, or as may be determined by arbitration, payable from the date of the settlement or of any other time limit imposed for compensation payments, whichever is the earlier,
3. (c) the payment on account where requested by the claimant of 60 per cent. of the amount of compensation agreed between the claimant and the appropriate authority, or in any other case of the amount of compensation that the appropriate authority estimates the claimant is entitled to under the scheme, within three months of the submission 985 of the scheme, or on the expiry of any time limit imposed for the payment of compensation, whichever is earlier,
4. (d) consideration to be given for a payment to be made in appropriate cases to meet the costs of clearing the land in question of buildings or other fixed equipment utilised by the business,
5. (e) the payment of expenses incurred by the claimant as a result of the coming into force of section I including forced sales, premature termination of contracts, and any other reasonable disturbance costs.'.

No. 10, in page 3, line 39, at end insert—

'(4A) The agreement of the appropriate authority to refer a dispute as to a person's entitlement to arbitration under subsection (4) shall not be unreasonably withheld.'. No. 11, in clause 7, page 4, line 9, leave out from "force" to end of line 10 and insert—

'on the day on which this Act is passed.'. New schedule 1—Independent Advisory Body—

1. 1. The independent advisory body shall be made up of no less than three and no more than seven members.
2. 2. The members shall possess such professional qualifications as the appropriate authority shall specify in order to provide an independent and comprehensive assessment of all those criteria necessary to arrive at an independent and fair market valuation of the businesses affected by the coming into force of section 1.
3. 3. The independent advisory body shall be set up no later than the day after the day on which this Act is passed.
4. 4. The independent advisory body shall be free to seek guidance on valuations from professional and political associations involved with fur farming in any country of the European Union.
5. 5. The independent advisory body shall be recompensed for reasonable expenses incurred in the course of its duties.
6. 6. The independent advisory body shall report back to the appropriate authority no later than 6 months prior to the date on which Sections 1 to 4 shall come into force.'.

Mr. Moss

Amendments Nos. 5, 6, 7, 8 and 10 relate to clause 5, which deals with compensation, and amendment No. 11 relates to clause 7. Clause 5 is, after clause 1 which creates the offence, the most critical clause in the Bill because it addresses the issue of compensation. The private Member's Bill showed little sign of any real compensation, but this Bill has beefed it up. We welcome the fact that the Government have moved to address the issue of compensation more meaningfully.

As the Minister has said on many occasions, clause 5 is an enabling clause. Amendment No. 5 would change the word "may" to "shall" because we want to be sure that the Government are totally committed to introducing a compensation scheme. They have promised it and they have given assurances, but it is not in the Bill in a strong enough way to give us the reassurance that we seek on behalf of the 11 fur farmers who are looking for sensible, fair and proper compensation.

Amendment No. 6 follows on from amendment No. 5. It would insert the words, "The scheme shall". It would require the appropriate authority—which of course is the Minister—to set up a scheme.

Mr. Hogg

I am trying to relate my hon. Friend's amendments to the clause. My understanding of the practical effect of the amendment is that it would require compensation in Wales, as the Bill already requires a scheme in England, but not in Wales. Am I right?

Mr. Moss

That certainly was not the intention of the amendment and I am puzzled by my right hon. and learned Friend's interpretation. According to the present wording of the Bill in subsection (1), The appropriate authority may (and in the case of the Minister of Agriculture, Fisheries and Food, shall) by order make a scheme for the making of payments by that authority.

Mr. David Heath (Somerton and Frome)

My interpretation of the amendment is exactly the same as that of the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). The appropriate authority can mean only two bodies: either the National Assembly for Wales or the Ministry of Agriculture, Fisheries and Food. The Ministry of Agriculture, Fisheries and Food is required to introduce a scheme in England, so the amendments can affect only the position in Wales.

Mr. Moss

I am slightly puzzled by that conclusion. The amendment is an attempt to impose on the Minister, who is the appropriate authority in England, and the appropriate Welsh Minister, a requirement to introduce the scheme. Amendment No. 6 provides that that scheme shall—not may—fulfil certain functions.

Amendment No. 7 would require the setting up of an independent advisory body in accordance with new schedule 1 to advise the appropriate authority on all aspects of the scheme. It then places further requirements on that independent advisory body.

Amendments Nos. 6 and 7 are crucial in that they would establish a group of independent experts to investigate and assess the compensation requirements of fur farmers who were caught by the legislation. It would make the independent aspect of the compensation scheme completely transparent and would honour the commitment that the Minister repeatedly gave in Committee.

During our third sitting, the Minister promised:

Independent valuations will be conducted not by Ministry staff, but by independent valuers who will talk with farmers about capital and income streams before reporting back to the Ministry. Those professionals can be sent out to farms as quickly as possible, and almost immediately after Royal Assent.—[Official Report, Standing Committee E, 6 June 2000; c. 83.] We have taken the Minister's words at face value. Indeed, we interpreted them as a commitment or even a promise. The new schedule, which we will come to later, sets out the role and composition of the advisory body. It refers to issues identical to those raised by the Minister—namely, the need to use professionals, and when the advisers should go out to talk to the fur farmers about compensation. We are talking about that taking place as soon as the Bill receives Royal Assent.

Under the Government's proposals, the scheme to be set up by the appropriate authority will have responsibility for implementing clause 5(2). We believe that the Bill therefore gives great control to the Minister and the Ministry. Clause 5(2)(a) requires the authority to specify the descriptions of losses and businesses to receive payment … and the basis of valuation for determining losses. Clause 5(2)(b) requires it to specify the amounts of the payments to be made and the basis on which they are to be calculated. Clause 5(2)(c) requires the authority to provide for the procedure to be followed in respect of claims. Amendment No. 7 would give that role to the independent advisory body. It tasks that body with advising the Minister on all aspects of the scheme, and the emphasis is on the words "all aspects". Any independent assessment of a compensation scheme should start from the premise of fairness and proper value. Appointing independent assessors would rescue the Minister from any accusations of organising a stitch-up or of having preconceived notions of valuation that are circumscribed by Treasury-driven financial limits.

The phrase "all aspects" means that all the facets, components, considerations and calculations that must be taken into account when arriving at a fair and accurate valuation shall be part of the assessment. To achieve that, the independent body must be made up of people with a range of professional skills—a point that the Minister has already conceded in Committee.

The independent advisory body must be free to start from basics. There should be a clean sheet of paper, with no preconceived notions as to what is ruled in or out. A lengthy discussion took place in Committee about the financial guidelines set out in the explanatory notes to the Bill. Paragraph 26 of those notes is headed "Financial Effects of the Bill", and states: It is estimated that the cost of compensation under the Bill for the … 13 mink farms could, in respect of assets, be up to £400,000 and perhaps four times that amount if income were to be compensated. We pressed the Minister about the upper limit of £1.6 million. Time and again, we asked if it was a predetermined upper limit that effectively set a ceiling on the negotiations on the value of fur farming business. The Minister was helpful in confirming that the figure was not carved in stone: We will consider carefully whether the figure might have to be varied … We feel that our figure is broadly right, but if some adjustment is required, we shall consider it carefully following the valuations. Finally, he said: The valuers certainly will not be instructed to draw up a scheme within the maximum of £1.6 million.—[Official Report, Standing Committee E, 6 June 2000; c. 83-5.] We feel that the best way to secure that clearly stated commitment from the Minister is to give powers for determining the compensation scheme to an independent body, with no strings attached.

Another vexed issue was whether income would be considered in a compensation scheme. That question was put to the Minister in Committee by my hon. Friend the Member for Cotswold (Mr. Clifton-Brown). The Minister replied: I can assure the hon. Gentleman that the provision of compensation for income will certainly be considered in the compensation scheme. The Bill makes provision for that. A little later, the Minister stated: I have already said that there will be an independent valuation of the businesses, including their income.—[Official Report, Standing Committee E, 6 June 2000; c. 62–5.] That clear steer from the Minister would help any independent valuers tasked with working up a scheme. It would be an integral part of their deliberations to consider the importance of income under clause 5(2)(a), which requires them to specify … the basis of valuation for determining losses. Amendment No. 8 would give a specific responsibility to the independent advisory body to take certain stated considerations into account in determining its recommendations on compensation to the Minister. Such considerations can be summarised as follows—provision for reasonable professional fees, the payment of interest on outstanding settlement payments, a payment on account of 60 per cent. of the agreed amount of compensation, a payment for the cost of clearing land of buildings and fixed equipment, and payment of reasonable expenses in winding up the fur farming businesses.

8.45 pm

Let us look first at proposed subsection (2B)(a), which deals with the payment of legal fees for the advice that fur farmers will need. A similar amendment was tabled when the private Member's Bill promoted by the hon. Member for Liverpool, Garston (Maria Eagle) was considered in Committee. It was rejected because it was too loosely worded, referring as it did to "advisers" in the plural. Those in favour of the Bill argued that that placed no limit on the number of people whom fur farmers could consult, thus creating the need for a blank cheque. Amendment No. 8 is specific, in that it refers to the payment of reasonable professional fees for advice—in the singular. That would, we hope, rule out payments to a long list of advisers.

To my knowledge, no other Government have introduced legislation to ban an entire sector of farming. That places even greater emphasis on the unbiased and independent advice that the fur farming community will require.

It has been standard practice for many years that claimants under the land compensation code are entitled to have their professional advisers' reasonable fees paid for by the acquiring authority. The Bill will impose a compulsory ban on fur farming, which we argue is similar to a compulsory purchase order under the land compensation code. The effect would be pretty much the same in each case—the state uses compulsory purchase powers to confiscate an individual's property.

Fur farming is a very specialised form of farming. We believe that it is essential for the farmers involved to have access to good professional advice, in the consultation period and during negotiations, on the level of compensation to which they feel that they are entitled. The amendment would help to ensure not only that such professional advice was available but that the fees for it would be allowable in reaching a figure for compensation.

Proposed subsection (2B)(d) in amendment No. 8 would provide for the cost of land clearance to be included in any appropriate compensation scheme. In Committee, the Government gave an assurance that, as a general principle, they would consider the cost of demolition in relation to a claim in particular cases. However, they were adamant that such consideration would be given only on a case-by-case basis and on a case's individual merits, rather than blanket coverage. We accept that, and believe that the amendment conforms to that requirement.

Because the Government are proposing a unique measure, and because fur farming is so specialised, there is very little professional opinion available on what effect the ban will have on the future use of these specialised buildings and the equipment that is associated with fur farming businesses. An example was given in Committee—a farmer in Northumberland had turned some of his sheds over to the growing of strawberries. Other people commented that he had gone out of business, for whatever reason. There are limited other uses to which the buildings can be put. It is important that the cost of demolishing and clearing the land be included in any scheme.

We know that land clearance, especially if someone wants to return the site to a greenfield site that can be farmed in more conventional ways, can be extremely expensive. Figures have been quoted of about £100,000 for a substantial farm of, say, 600 breeding females. Pro rata, that would come out at £17,000 per hundred breeding females. Those are substantial sums in anyone's book, and we feel that it would not be unreasonable that they should be included in the calculations in the compensation scheme.

Proposed subsection (2B)(e) would provide for compensation to cover costs associated with the winding up of a fur farming business. As a general rule, claimants in any scheme of compensation should mitigate their losses wherever possible, but there will inevitably be costs associated with winding up businesses as a result of the coming into force of the offence in clause 1. There may have to be forced sales of capital equipment, land and the property that goes with it. If a farmer was leasing land, there might be costs for early termination of the lease. There is always a cost when people wish to terminate a lease in advance of the appropriate date. Contracts may have been entered into with subcontractors to do work on the farm; they, too, may require compensation.

Proposed subsection (2B)(b) in amendment No. 8 would allow for interest to be claimed on any outstanding compensation and to be payable in the period from the date of the final settlement to that of payment. We hope that whatever scheme the Minister puts in place as a result of the advice that he receives from the independent advisory body will be regarded by all parties as fair and honourable, and that it will not take a great deal of time to reach agreements on the level of compensation. However, in the real world, things rarely go so smoothly.

Negotiation and settlement of claims could take considerably longer than a few months. If negotiations turn out to be lengthy because there are disputes about the scale and the amount of compensation, that may involve the matter going to arbitration, as we know from other parts of the Bill. It may well go to the Lands Tribunal, under clause 5(5). If it does, settlement could take years rather than months. In those circumstances, it would be appropriate for compound interest to be payable on the amount that is finally agreed. The advice to the Government from their working party on compulsory acquisition was that such interest was payable.

Proposed subsection (2B)(c) relates to what we call payment on account. It would allow for interim compensation payments to be paid when the final payment was unreasonably delayed. Since 1973, claimants under the land compensation code have been entitled to request advance payment of 90 per cent. of either the agreed compensation or, more usually, the acquiring authority's initial estimate of their entitlement. As I have said, it can take months or years to reach a final settlement in practice, especially if the Lands Tribunal route is entered into.

The amendment sets a lower figure than the 90 per cent. under the code; 60 per cent. is fair and reasonable. That would extend to the fur farming industry rights similar to those applicable to land compensation. It would be unreasonable of the Government to reject that proposal. It is in their interest to accept the amendment, because it is likely to enable fur farmers sooner to establish other businesses and sources of income.

Amendment No. 10 provides That the agreement of the appropriate authority to refer a dispute as to a person's entitlement to arbitration under subsection (4) shall not be unreasonably withheld. In Committee, the Minister agreed that the Lands Tribunal was a poor long stop for settling disputes. Indeed, the process is notoriously slow and expensive and invariably extremely unfriendly towards claimants.

The inclusion of an arbitration procedure under the Bill is welcome. In the absence of agreement, we would support the selection of an arbitrator by the president of the Royal Institution of Chartered Surveyors. However, under the measure, there is a risk that the Minister could refuse to go to arbitration; or he could wait until the full nine months had elapsed before making his offer and force the claimant to settle at that late hour or face the unattractive option of taking the case to the Lands Tribunal. That would give the Minister unfair leverage in the negotiations. We should like him to accept our amendment, because it would give an assurance to all involved that he would not withhold unreasonable agreement to arbitration if the parties had not reached an earlier settlement.

Amendment No. 11 relates to clause 7. In Committee, the Minister said: I take the point that some fur farmers may want to get out of the business as quickly as possible; I understand that point … I want the scheme— for compensation— to be introduced as quickly as possible in order to assist people.—[Official Report, Standing Committee E, 6 June 2000; c. 81-2.] He said that it would take a couple of months to get a draft consultation scheme up and running. There would be a two-month consultation period followed by about a month of internal discussions. In the light of those comments and given the desire of the farmers to get the scheme under way as soon as possible, there is no reason why clause 7(3) should delay the implementation of the compensation clause until two months after the Bill receives Royal Assent.

New schedule 1 relates to the independent advisory body. The body should comprise no fewer than three and no more than seven members. The numbers are fairly arbitrary; we want a workable number of people—more than seven would be unwieldy and three is probably the minimum. Our proposal offers the Minister plenty of scope to act as he sees fit.

Paragraph 2 would require members of the body to possess such professional qualifications as the Minister deems appropriate to the job in hand. The RICS should be involved—because of the auctioneers and valuers. An accountant should be included. Someone from the legal side—a solicitor or banister—should be involved; also perhaps a National Farmers Union representative, and perhaps an expert in fur farming from the European Union. After all, there is a huge fur farming industry in the other member countries of the European Union, and some of those have already considered compensation schemes, so their expertise might be helpful.

9 pm

Paragraph 3 of the new schedule requires that The independent advisory body shall be set up no later than the day after the day on which this Act is passed. The Minister has suggested that he wants to get this scheme up and running on the day the Bill receives Royal Assent; we would give him an extra day. If the scheme can be set up before Royal Assent, for earlier consultation, we would welcome that.

In paragraph 4 of the new schedule we have suggested that the independent advisory body should be free to have discussions with people involved in fur farming in the rest of the European Union. Although members of the advisory body may not seek that guidance and advice or help, we feel that there should be such a provision because the scale of the fur farming operation elsewhere in the European Union is immense compared with our own. We have 11 farmers; I believe that there are about 8,000 fur farmers in the rest of the EU, so we would argue that the expertise in that business is far greater than in this country, and it would be very helpful if the independent advisory body were allowed, within its articles of association, if I may call them that, to consult in that way.

Finally, paragraph 6 of the new schedule says that The … advisory body shall report back to the Minister no later than 6 months prior to the date on which Sections 1 to 4 shall come into force. Clause 7 speaks of no day before 1st January 2003. We would say that this advice from the advisory body needs to be on the Minister's desk six months before whatever date he has decided the Bill will come into force. That, on the face of the Bill, is not before 1 January; so if that were to be the date in question, we would be talking about six months before then—the middle of 2002.

I have explained the long list of amendments dealing with compensation. As I said in my opening remarks, the provisions relating to compensation are the most critical part of the Bill as it stands. Only a small number of people are involved, but their businesses are extremely important to them. They are, in the present context, in the main lucrative businesses, and it is important that the processes that deal with compensation should be independent and transparent, and that there should be recourse to all the professional help that is available in order to arrive at fair, proper and adequate compensation.

Mr. Hogg

This is a terribly important group of amendments. I support not the exact wording of the amendments that my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss) has spoken to, for reasons that I shall explain, but their underlying purpose.

First, let me say where my hon. Friend and I are not at one, because I think that my understanding of the group of amendments is slightly different from his. My understanding of the Bill as it is currently formulated is that the Minister of Agriculture, Fisheries and Food is obliged to bring forward a scheme for England but in the case of Wales it is a matter of discretion. Therefore the effect of amendment No. 5 impacts only on the Welsh dimension; it makes it mandatory for Wales to bring forward a scheme. In principle, that of course is right, although I would have to accept the principles of devolution. It may well be right for the Welsh Assembly to determine whether there should be a compensation scheme within Wales. None the less, in principle, I feel sure that there should be a compensation scheme.

The Bill, as it is formulated, places a duty on the Minister to produce a scheme. The Bill is defective in that there is no requirement—I emphasise that word—as to what should be in the scheme. There is a permissive power to include within it a range of heads of compensation, which are set out in clause 5(2)(a)(b) and (c). They may be included, but do not have to be.

The advantage of the approach of my hon. Friend the Member for North-East Cambridgeshire is that it provides for an independent body to make a recommendation, which has to provide for various forms of compensation. Why is it important that there should be an independent body of the sort recommended by my hon. Friend? In part, the argument is as he has stated it, namely, that we need transparency and independence, because—I now speak with some experience of the matter, if you will forgive my saying so, Mr. Deputy Speaker—all Government Departments are mean. They have to be mean because they are acting within a budget. One can be certain that if the Minister is the sole person or body to set up the compensation scheme, as the Bill provides, it will be done extremely meanly because of the budgetary constraints under which the Department is operating.

Furthermore, a challenge can be made under the Bill only within the framework of the scheme that the Minister has produced. The Minister is not only responsible for the scheme, he is the payer. A successful challenge would have to be within the scope of the scheme that the Minister has produced and that constrains the right of appeal in a way that is wrong.

Another argument is that the European convention on human rights will be in operation from 2 October. One of the consequences of article 1 of the first protocol, and of other articles, is the obligation to pay compensation. Governments may well be moving towards compensation requirements because of that convention and its impact on the compensation duties of Departments.

I point out to the Minister that, as my hon. Friend said, if there is a duty under the European convention to pay compensation, it is pretty certain that the European Court of Human Rights will require that the criteria for compensation should be set out and determined either by statute on the face of the Bill or by some independent body. Otherwise, to return to the argument that I was making a few moments ago, the payer will set up the scheme and will limit the ability of the claimant to challenge it. I very much doubt whether that will be held to be consistent with the convention. Therefore, my hon. Friend is trying to give the Government some reinforcement, although I do not suppose that the Minister will welcome it.

I deplore the measure. It is an odious little Bill. That said, however, we must deal with it as it is. In its present form I suspect that it is not compatible with the European convention because the compensation provisions do not appear in it in an explicit form and there is no independent body to set out the criteria. Therefore, there is a real danger of a declaration of incompatibility down the track, or an application to Strasbourg.

My hon. Friend the Member for North-East Cambridgeshire is giving the Parliamentary Secretary an opportunity to reinforce the Bill. I told my hon. Friend that I welcomed the purpose of his amendment, but one or two adjustments need to be made if its principle is to be accepted. Neither the scheme in the Bill nor the scheme in my hon. Friend's amendment make a requirement—I underline that word—to pay compensation for loss of profit. It may be addressed in the scheme proposed by the Minister, but it does not have to be.

Why on earth are we not providing for loss of profit to be a mandatory element in the compensation scheme? My hon. Friend's approach, if adopted, would need adjustment in another place to make the provision of a loss-of-profit element mandatory. I also wish to draw attention to the fact that compensation is simply for the value of the animals. The animals themselves have a value, which is different from the loss of profit, although they overlap. The Parliamentary Secretary looks pensive, but I assure him that that is the case. There are two elements: the value of the beast and the damage to the business. When people go out and buy a lot of beasts, they incur costs in acquiring them. Those beasts have a value. Down the track, however, there is a continuing profit for the business. Obviously there is an overlap, but those heads of loss are different.

The Bill or my Friend's scheme, when adjusted, should make provision for mandatory compensation to be paid for the loss of the beasts themselves. My hon. Friend has enabled the House to raise the question of compensation. I welcome his approach, which would impose yet more mandatory duties on the Government. I also welcome it because my hon. Friend suggests that the scheme should include various heads of loss that are not currently included. Personally, I think that he has not gone quite far enough and that the matter should be examined further in another place. However, I have no doubt that he has moved in the correct direction and I support the purpose of his amendment even though, if he will forgive me, I have one or two misgivings about some of its language.

Mr. Hunter

I shall be brief, as the points relevant to the amendments have been expressed clearly by my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss) and my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg).

I wish to pick up one aspect of what my right hon. and learned Friend has just said about the European dimension, which is so relevant to the compensation issue. The Minister will correct me if I am wrong or mistaken, but I have received briefing material which states that the European Commission has advised member states not to proceed with legislation on a national basis prior to the introduction of a directive which is currently being worked on. I have been given a facsimile of a document that purports to be to that effect.

No doubt the Minister will be able to advise me whether that is right or wrong. He will acknowledge that the European Union is beginning to move on that front, that growing attention is being paid to the issue of fur farming and that, in the course of time, movement is likely. In advancing down the way of national legislation on compensation, I am concerned that, while one or two cases of compensation are perhaps fully sorted out and others are in the pipeline, an entirely different regime will be imposed by the European Union.

I should like the Minister to contemplate that scenario, which is not impossible, and could arise and present enormous difficulties. That possible scenario makes it all the more advantageous and desirable that an advisory body, composed of independent advisers, is created.

9.15 pm

I do not wish to go over at length the points that my hon. Friends have made, but I emphasise to the Minister that, apart from clause 1, which establishes the offence, this is clearly the most critical clause. The Government have moved forward from the position in last year's private Member's Bill. I am grateful for that and readily acknowledge it, but it is imperative that the amendment to substitute "shall" for "may" be included in the Bill.

I have listened carefully to the Minister on numerous occasions on the subject. I think that that total commitment is still not there. The provision is not strong enough. Reassurances are needed. The amendments go significantly towards filling that gap. I hope that the Minister will seriously take them on board.

Mr. Paterson

This is the most important subject of the Bill. It is the first time I know of that a Government have wilfully closed a legitimate business activity which is flourishing in the rest of Europe. For example, fur farming accounts for perhaps 4 per cent. of Danish gross domestic product. I pick up on the comments by my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg). It is important that the Bill has clear provision on a fair and comprehensive compensation scheme, or the Government risk running into fearfully expensive legal actions in Europe.

I pray in aid the National Farmers Union, which as we all know is a non-political organisation. It has made it clear in letters on the subject, including one that I received in January that Should this legislation proceed it is therefore imperative that the individuals concerned are treated fairly.—[interruption.] The hon. Member for Liverpool, Garston (Maria Eagle), who promoted the private Member's Bill, is laughing. There are people who have built up businesses for 40 years. It is their life's work. There is a business in the west country that employs 40 people. I do not think that it is a laughing matter. Because she finds the activity distasteful and hides behind the idea that it is publicly immoral, she wants to close it down. The one thing that we must do—

Mr. Deputy Speaker

Order. The hon. Gentleman is already starting to stray. I should like to bring him back to the terms of the amendment, which is about compensation.

Mr. Paterson

Absolutely, Mr. Deputy Speaker. What I am objecting to is that the hon. Lady is laughing at the discussion on compensation.

Mr. Deputy Speaker

Order. There is no need to repeat the point, which I have just ruled out of order.

Mr. Paterson

Moving on to the Europeans, who will pick up the matter if the Bill is not fair? I have talked to Wim Verhagen, chairman of the European Fur Breeders Association, who is adamant that it will take the measure to the European courts if there is no fairness in this country. I pray in aid Helge Olsen, manager of the European Fur Breeders Association, who made it clear that it would be extremely damaging for the industry in Europe if the measure went ahead. They are concerned about compensation in this country.

The only reference to sums of money is tucked away on page five of the explanatory notes. Under the heading "Financial effects of the Bill", paragraph 26 states: It is estimated that the cost of compensation under the Bill for the current thirteen mink farms could, in respect of assets, be up to £400,000 and perhaps four times that amount if income were to be compensated. That figure laughably underestimates the true cost of the measure. From a few brief conversations that I have had, it is clear that that would not pay to close even one farm. A farm in the west country has had a quote for £2.6 million on the plant and assets alone. It has had an independent assessor in. The estimated loss of income is £1 million a year. There is the question of returning the site to a green field because the buildings will incur rates. Those buildings will have to be demolished, a point that the Minister might like to pick up. The cost of demolishing the buildings on just one farm would be £100,000.

Therefore, I estimate that that farmer alone would look for at least £3 million to £4 million, which is a large sum. The man has built up the business over 30 to 40 years and invested not only in its physical assets. Fur farmers have invested substantially, although investment has come to a halt in recent years because the Government have said that they would not compensate farmers for that.

As my right hon. and learned Friend the Member for Sleaford and North Hykeham pointed out, the stock is valuable. Farmers have bred the animals, created a brand and developed good will. The businesses have an international reputation. The Bill does not refer clearly to income and there are also the issues of redundancies, wind-down costs and loss making as wind-down takes place. I have already touched on rates and demolition costs, but there is also interest and fees, which we discussed in Committee at some length. They constitute substantial costs and the figure in the explanatory notes cannot possibly be anywhere near accurate,

As a further guide to the figures' inaccuracy—

Mr. Deputy Speaker

Order. I have tried to help the hon. Gentleman, but this is not the appropriate moment for a general discussion about compensation. The debate is about the specific terms of the amendments. I would feel a little more comfortable if he directed his remarks towards the amendments.

Mr. Paterson

Thank you, Mr. Deputy Speaker. The amendments would provide much better terms of compensation than are currently in the Bill. That is the most important point that we are discussing. Will the Bill offer a satisfactory compensation scheme? My answer is no. Would the amendments, as tabled by my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss), improve it? The answer is yes.

I have cited one example that shows that the Bill is simply not adequate as it stands. It will not cover all the costs that I have mentioned. A farm in Austria is the only one in Europe that has been bought out and it cost 4.7 million Austrian schillings to do that. The cost was the equivalent to about £400 for each breeding female. The Bill does not refer to anything like that sum. It does not provide a mandatory compensation scheme.

Mr. Deputy Speaker

Order. I do not think that the hon. Gentleman has taken on board my advice. He should consider not the general amount of compensation, but the mechanisms for compensation that are at the heart of the amendments. He must direct his remarks to the scheme that is proposed in the amendments.

Mr. Paterson

I was saying, Mr. Deputy Speaker, that the Bill does not provide for an adequate scheme. As it stands, it would not come up with anything like the figures that have been proved necessary elsewhere. The figure in the explanatory notes is simply not adequate.

Mr. Deputy Speaker

Order. The hon. Gentleman must take on board my advice. We debate within the Standing Orders of the House and he must follow certain rules. He cannot go outside those rules in the way that he is seeking to do. The amendments have a narrow scope and he must focus on that.

Mr. Paterson

Amendment No. 8 would provide for an independent advisory body. That would provide a more viable basis for compensation. It would touch on some of the aspects that I have mentioned. The proposed subsections (a) and (b) in the amendment touch on professional fees and interest payments, and it also refers to buildings. Those are the most important issues for the farmers who have built up their businesses over the years. They need a thoroughly fair and transparent compensation scheme. The amendment would provide for that.

The only figure that is currently referred to is in the explanatory notes. The Treasury will run rings round the Minister. The compensation offered is not satisfactory.

Mr. Clifton-Brown

Some of the provisions were discussed in Committee, but the replies that we received, although courteous, were not satisfactory in substance. Our concerns therefore need airing again on Report.

On amendment No. 5, as my right hon. and hon. Friends have said, it is essential that in clause 5 the word "may" should be replaced by "shall", otherwise there is no obligation on the appropriate authority to produce a compensation scheme. That would be appalling. I see no reason why the Government should not accept the amendment.

Maria Eagle

I am grateful to the hon. Gentleman. The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) first made the point, but perhaps I can try again to explain. Clause 5(1) already provides for the Ministry of Agriculture, Fisheries and Food in England to make a scheme, through the use of the word "shall". In Wales, that would be a matter for the National Assembly, but there are at present no fur farms in Wales for which a scheme would have to be made. Although one can see the point of the amendment, it is defective. Does the hon. Gentleman not accept that?

Mr. Clifton-Brown

I entirely accept what the hon. Lady says. The amendment is defective. That shows how carefully one needs to read an amendment before appending one's name to it. Nevertheless, the spirit of what we tried to achieve through the amendments is clear. If we had the access to the parliamentary draftsmen that the Minister has, I am sure that such an elementary mistake would not have been made.

Before I am led too far down the path of temptation and ruled out of order, Mr. Deputy Speaker, I shall move quickly on to amendment No. 8. Many aspects of the amendment were covered in Committee, but there are one or two that I shall discuss. On the aspects that we raised in Committee, the Minister said that they would be subject to consultation; and that the Bill would provide for them if the Government considered it necessary; but that the Government would give no guarantee that the Bill would provide for them.

That is an unsatisfactory way in which to proceed. As I said on the previous group of amendments, we must be clear in the legislation that we pass. People's livelihoods are to be taken away. It does not matter whether one approves of their livelihood or not. The fact is that we are taking away people's livelihoods and they deserve to be compensated.

Mr. Hogg

I am grateful to my hon. Friend. Does he agree that it should also be borne in mind that this will be the last time—other than when we come to discuss Lords amendments, if we do—that the House will have an opportunity to discuss the compensation scheme? He will have noticed that the scheme is subject to the negative resolution procedure rather than to the affirmative resolution procedure.

Mr. Clifton-Brown

My right hon. and learned Friend makes an interesting point, and if time permits, I may get on to the subject of the negative and affirmative resolution procedures.

Let me return to amendment No. 8. I hope that, as my right hon. and learned Friend said, if the Minister does not accept the amendments this evening or give an undertaking that the Government will move similar amendments in the other place, our noble Friends act accordingly.

It is a fundamental principle of a compensation scheme that professional fees should be paid. No one would argue with that. In any statutory compensation scheme, it should be possible to claim reasonable professional fees. In many cases of compulsory purchase, interest is also paid.

As I said in Committee, it seems entirely reasonable that, since the Inland Revenue and Her Majesty's Customs and Excise charge interest on late tax and VAT payments, if the Government delay paying compensation under the Bill, they should also pay interest. Not only is that equitable: it gives the Government an incentive to agree to the compensation and get it paid as soon as possible. If people's livelihoods are being taken away, they deserve to have their compensation paid quickly.

New subsection (2B)(c) in amendment No. 8 provides for 60 per cent. payment in advance. Again, I declare an interest as one of only two chartered surveyors in the House. I have drawn up such claims in the past. When there are two opposing valuers—as I am sure will be the case here—it is easy to get to the reasonable quantum of a claim quite quickly, although the parties often disagree about the last little bit and may have to go to arbitration.

9.30 pm

As the Bill will make statutory provision for compensation once it has been amended properly in the other place, it is wholly reasonable that a large proportion—personally, I think that 60 per cent. is about right—should be paid in advance. That will help with the costs of resettlement and so on. Some of the payments may be taxable, so it will help if some money is paid in advance and some a little later.

New subsection (2B)(d) in amendment No. 8 concerns clearing land and equipment. I have been involved in agriculture all my life and I know how quickly buildings can become out of date. I have no doubt that the specialist buildings and equipment will be completely useless for anything else, so it is wholly reasonable that compensation should be paid to allow the land to be rendered fit for other purposes. If the buildings are not demolished, they may well be subject to rates, even though the business is not being carried on. In that circumstance, I have no doubt that the owner or lessee of the land would want to demolish them as quickly as possible.

If the state is forcing people to give up their business, it is right to include the items listed in paragraph (e) in the heads of claim. I have no doubt that expenses will be incurred in cancellation of contracts. There may be long-term contracts and some may even contain penalty clauses in the event of premature termination.

I suppose that "other reasonable disturbance costs" could include loss of income. The Minister needs to come clean about that. He said: Yes, the Bill allows compensation for income. My hon. Friend's Bill specifically ruled that out. During the discussion that we had in that Committee—because, as I said, the Government must pay in the end— which is very good news— I accepted that there would be an amendment that did not bar the consideration of income.—[Official Report, Standing Committee E, 6 June 2000; c. 62.] In other words, the Government could consider paying for loss of income but were not obliged to do so.

I would contend that, if the Government do not pay for loss of income, the claims will rapidly end up before the European Court of Human Rights as a fundamental violation of property rights. Perhaps the Minister, in declaring that the Bill complies with the European convention on human rights, will tell us how that can be so if he is not providing a statutory basis for compensating loss of income. I look forward with great interest to his response.

Mr. Morley

The amendments are very important. The hon. Member for North-East Cambridgeshire (Mr. Moss) moved them in a reasonable way and made a number of fair points, which we discussed in Committee in some detail and I tried to address in some detail. I also tried to be as helpful as possible, bearing in mind that, as the hon. Gentleman rightly said, the Bill is an enabling measure. The Bill provides powers to make the compensation scheme. It is not appropriate to include enormous detail of the scheme in the Bill. The draft compensation scheme will go out to consultation and involve independent assessment of its various aspects, to which I shall come in a moment.

Mr. Hogg

If the Minister is right about that—obviously he is, in a sense—would it not be right to use the affirmative resolution procedure? Then the Minister would have to lay a draft scheme for the approval of the House and the House would at least have an opportunity to express a view on it. At present, the probability is that the House will never have such an opportunity.

Mr. Morley

A draft scheme will be produced, circulated and opened to consultation. The right hon. and learned Gentleman will appreciate from his time in government that I follow the professional advice of departmental advisers on the use of affirmative and negative resolution procedures.

I shall deal with the amendments one by one. The right hon. and learned Member for Sleaford and North Hykeham and the hon. Member for Somerton and Frome (Mr. Heath) were right in their interpretation of amendment No. 5. It would extend a requirement to make a compensation scheme to the National Assembly for Wales. That would be superfluous because there are no fur farms in Wales.

I sympathised in Committee with the points made by the hon. Member for North-East Cambridgeshire about the requirement for MAFF to make a compensation scheme in England. That was one issue debated by my hon. Friend the Member for Liverpool, Garston (Maria Eagle) during the passage of her private Member's Bill, on which there was much consultation with the National Farmers Union—when, of course, we listened to points made by fur farmers.

I draw hon. Members' attention to clause 5(1), which states: The appropriate authority may (and, in the case of the Minister of Agriculture, Fisheries and Food, shall) by order make a scheme for the making of payments. I have already accepted that that is a cast-iron guarantee that there will be a compensation scheme. I give the hon. Member for North-East Cambridgeshire that assurance.

Amendment No. 6 and the first parts of amendment No. 7 and new schedule 1 address aspects that can perfectly be part of consultation on the scheme. I caution the hon. Member for North-East Cambridgeshire against requiring great detail in the Bill. I know that it is not his intention, but a quest for such detail can be restrictive and make it more difficult to respond to consultation and include aspects that people feel are appropriate. We believe that the current provision is adequate.

As the hon. Member for North-East Cambridgeshire said, there is an appeals procedure via arbitration or the Lands Tribunal—two opportunities. Setting up an advisory body is a complicated and bureaucratic approach to the issue. We have already said that, in drawing up the draft compensation scheme, independent assessors will visit fur farmers to consider what should be part of a compensation scheme and, of course, of the valuation.

Although those assessors will report to MAFF, they are individual assessors—chartered accountants, for example. They are governed by their professional bodies, as those hon. Members who are chartered accountants know well. There is an element of independence within the assessment that we are proposing, so such an external body, with all the bureaucracy and possible delay that it would entail, is unnecessary.

Amendment No. 8 contains a list of compensation provisions, put forward in the light of the consultation exercise. I made it clear in Committee that many of those are perfectly reasonable and valid. In Committee, the Government accepted much of what was put forward, and the Bill provides the power for such a detailed scheme. However, we are back to the problem that to include too much detail in the Bill would be restrictive in a way that I know the hon. Member for North-East Cambridgeshire would not wish.

Mr. Hunter

I have read and re-read the Parliamentary Secretary's comments in Committee on the issue of compensation, but I cannot see a categorical assurance that loss of income will be reflected in the scheme. Can the Minister clarify that point?

Mr. Morley

The original Bill promoted by my hon. Friend the Member for Garston deliberately precluded compensation for loss of income. In the light of representations that we have received, this Bill provides for compensation for loss of income, and that will rightly feature in the consultation process. The independent assessors will, among other things, assess income when they visit farmers when the Bill receives Royal Assent.

I was tempted by amendment No. 10 in the spirit of moving the Bill forward. I recognise that there are legitimate concerns about compensation, and I can give the clear undertaking that Ministers will not unreasonably withhold agreement to go to arbitration. I am happy to put that assurance on the record.

Amendment No. 11 relates to the time scale for compensation. I repeat that I understand that many fur farmers want a compensation scheme up and running as soon as possible. When I last met them they said that they were anxious to have some clarity about where they stood. If there was to be a Bill, they wanted it to make progress and have it implemented as quickly as possible so that they could make their decisions and be compensated accordingly. That is what we have tried to do. We must have the consultation period. It is a convention that, in general, no Act of Parliament should be brought into operation earlier than two months after Royal Assent.

Mr. Gray

If all the Minister wants to do is to get rid of the fur farmers in the United Kingdom and if he is prepared to pay compensation in order to do so, why does he not just offer that to the fur farmers without passing the Bill? He would then stamp out fur farming at a stroke in this country without any need for the process that we are going through at the moment.

Mr. Morley

There are one two tiny technical problems with that approach, one of which is that one may obtain the agreement of existing fur farmers but, without a Bill to prohibit fur farming, others might set up.

Mr. Ian Cawsey (Brigg and Goole)

Without a Bill to outlaw fur farming, what would my hon. Friend be compensating?

Mr. Morley

That is a good point. Without the prohibition of fur farming there would be no grounds for compensation. We are delivering a pre-election pledge. I recognise the impact of the measure on British fur farmers and that is why, throughout the Committee stage, I tried to incorporate as much detail as I could on compensation. I have tried to be genuinely helpful, almost to the point of bending over backwards, both in Committee and today, to take such matters into account. We intend to do that. I want a scheme to be established as quickly as possible after the Bill receives Royal Assent.

9.45 pm

Until the Bill becomes law, there is no basis for a compensation scheme. I therefore hope that the Bill has a speedy passage through both Houses and that I have dealt with the points that the hon. Member for North-East Cambridgeshire made so reasonably.

Mr. Hogg

Will the Parliamentary Secretary give way?

Mr. Morley

I am afraid that I am about to conclude. I hope that I have answered many of the points that were made.

9.45 pm

Mr. Moss

I thank the Parliamentary Secretary for his response, but he did not cover all the points that I made. For example, he did not consider the proposed new schedule in any detail. He talked about special advisers, including a few accountants, but he mentioned no other professionals. I am astounded that even at this stage, he does not consider including other professional advisers in the team that he will send out to undertake the consultation and make the assessment. It will take more than accountants to reach a sensible conclusion.

Who will the accountants be? Will they be Treasury accountants? In Committee, the Minister said that the advisers would not be MAFF people. However, I begin to fear that if the advisers are only a few accountants, they may be from the Treasury. What hope would fur farmers have in that case? I should be grateful if he elaborated on the likely identity of the accountants, and whether he believes that, in the spirit of the proposed new schedule, there should be a balanced and professional team. He did not mention numbers. Does that mean that two, three or more people will be special advisers? A little more detail would have been helpful.

The Minister dismissed the main thrust of the amendments on the basis that they were too restrictive. However, I believed that I had covered that point in amendment No. 7, which proposes setting up an independent advisory body to advise the appropriate authority— that is, the Minister— on all aspects of the scheme. That, of course, refers to the compensation scheme. I did not believe that there could be a definition more all-embracing than all aspects of the scheme. The idea that the amendments would lead to restrictions on the consultation on compensation does not hold water. The amendments are clear cut. The body would deal with all aspects of the scheme. The proposed new schedule gives details about what should be included. For example, I mentioned income. The Parliamentary Secretary gave assurances in Committee that the Bill allows for income to be taken into account. We agreed that that should happen. We did not table an amendment to that effect because we had received assurances about it.

Any compensation scheme could be cash limited. The Treasury has suggested ball-park figures, of which the Ministry has taken account. The Treasury will not be happy if the upper limit of £1.6 million is exceeded. However, that upper valuation of the 13 fur farms is light years away from the industry's view of the real value of their businesses.

We have heard the example of the Austrian compensation scheme. It is the only one that we currently know about. Its compensation equates to approximately £400 per breeding female. That makes the total value of the United Kingdom fur farming businesses approximately £8 million to £10 million. The Minister assured us that the £1.6 million mentioned in the explanatory notes was not set in stone. We take that assurance with a pinch of salt.

If the Minister simply sends out a few accountants, and the ball-park figure remains the Treasury figure of £1.6 million, not much consultation will take place. The pre-ordained sum will simply be carved up.

Mr. Clifton-Brown

Since I spoke, a document containing the compensation scheme for the Firearms (Amendment) Act 1997 has come into my possession. It took eight months to produce after the Bill received Royal Assent. Does my hon. Friend agree that it would be intolerable if it took eight months to produce the compensation scheme for this Bill, when it will be illegal to keep the animals after 1 January 2003, roughly two and a half years after the Bill receives Royal Assent? Clause 5 will come into effect two months after Royal Assent, and the compensation scheme could take eight months to produce before anyone could start working on a claim. That is unacceptable.

Mr. Moss

My hon. Friend makes a valid point, which he also made in Committee. The Minister has not answered it directly, although he has given some indication of the likely time scale for setting up the scheme and the consultation that will accompany it.

The Minister should respond to some of the detailed points that I have put to him. No guarantees have been given, and the whole purpose of the amendments was to seek clarification and guarantees that key areas of the compensation scheme would be taken into account in the consultation. If the Minister intends to send out only a few accountants, with a ceiling for the scheme of £1.6 million, I fear that the fur farmers will be sold down the river.

Amendment negatived.

Order for Third Reading read.

9.51 pm

Mr. Morley

I beg to move, That the Bill be now read the Third time.

I am sorry that the hon. Member for North-East Cambridgeshire (Mr. Moss) did not feel that I gave enough assurances about the compensation scheme, which is, in many ways, at the heart of the Bill, because I tried hard to do so. This is an enabling Bill and will give powers to bring forward a scheme with full consultation, during which all the points can be raised. In Committee, I also gave a detailed analysis of how we can achieve those objectives.

I thank those hon. Members who have made constructive and thoughtful contributions on the Bill, as well as my hon. Friends—not least, of course, my hon. Friend the Member for Liverpool, Garston (Maria Eagle), who piloted a private Member's Bill on the issue and did much of the preliminary work on prohibiting fur farming in this country. She was very influential in shaping the Bill in its final form. We took account of the representations that were made and tried to address the legitimate concerns that were raised.

We have had a response from the European Union to the Bill, and it did not object to it. I wish to make that clear. Therefore we are within our rights to proceed with it, taking into account our obligations under human rights and other legislation. We are confident that it meets all the requirements that we are obliged to address.

I must say to the hon. Member for North Shropshire (Mr. Paterson)—or perhaps I should say the hon. Member for Denmark, Central—that the Bill does not seek to impose our views on other member states. The treatment of fur farming in other member states is, rightly, a matter on which those countries must make their own decisions. Several other member states share our views on fur farming, the moral issue of how animals are treated and whether animals are being killed unnecessarily. We do not seek to impose our views on other member states, so we are within our rights to say that we do not appreciate it when other organisations and countries wish to impose their views on what we, through our democratic processes, do. I hope that the hon. Member for North Shropshire takes that into account.

In conclusion, I think that the Bill is important. Many people feel strongly about as it deals with an issue of public morality. I am sorry that the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) referred to it as an odious measure.

Mr. Hogg

I said that it was an odious little Bill.

Mr. Morley

I stand corrected. Frankly, I think that the political philosophy that justifies the abuse of animals is odious.

The Bill addresses a real issue of morality concerning the way in which we treat animals. I am grateful for the support that it has received from many hon. Members on both sides of the House and I certainly hope that we have addressed the legitimate concerns that have been raised during its passage through the House.

9.55 pm

Mr. Moss

The heart of the Bill is not the compensation clause but clause 1, which creates the offence of keeping animals primarily for the value of their fur. For the first time it criminalises a legal farming activity, which even after the Bill receives Royal Assent will still be legal in the rest of the European Union.

It is incumbent on the Government to give their reasons for introducing such draconian legislation. The Bill proposes a ban on fur farming. What do the Government tell us by way of justification? Their only justification at the time of the private Member's Bill introduced by the hon. Member for Liverpool, Garston (Maria Eagle) was animal welfare. They have now shifted to a position on public morality. The Minister said in Committee: we want fur farming to be banned because it is unethical. He confirmed the seismic shift in the Government's thinking when he said: arguing purely on welfare grounds is irrelevant.—[Official Report, Standing Committee E, 23 May 2000: c. 34–5.] There is some inconsistency in the Government's approach. They often use public opinion and opinion polls to justify their course of action. However, public opinion says that the live transport of animals is wrong, yet the Government have found a middle way on that. Public opinion says that the cloning of farm animals is wrong, but again the Government have found a compromise. So public opinion is not an overriding consideration. In our view the fact that a majority of people want fur farming banned is not a reason per se for introducing an offence and banning it.

Setting aside for a moment whether a ban is fair, reasonable or even justified, we must ask whether it is legal in the context of existing EU legislation to which the Government have signed up. It is worth exploring that point. After all, it is surely misguided of the Government to introduce legislation that seems to fly in the face of current EU law.

Mr. Eric Martlew (Carlisle)

Does the hon. Gentleman intend to divide the House on this matter?

Mr. Moss

The hon. Gentleman will have to see what happens at the end of the debate.

It is worth exploring the legal position given that the Bill appears to fly in the face of current EU legislation. So worried are the farming and agricultural interests within the EU about the implications of the offence created in clause 1 that they have sought legal advice.

The Committee of Agricultural Organisations in the European Community—COPA—and the General Committee for Agricultural Co-operation in the EU—COGECA—presented a paper of legal advice in which they argue that a ban as proposed by the Government is incompatible with European law on a number of grounds. They cite articles 28 and 29 and of the EC treaty, the principles of proportionality and non-discrimination and a judgment in November 1998 in which the European Court ruled that a member state is not entitled to enact national animal welfare measures once a harmonisation directive or regulation has been adopted. They also cite the common organisations of the market. They argue that where regulations are based on an open market to which every producer has free access, the keeping of animals covered by the organisations cannot be prohibited.

It being Ten o'clock, the debate stood adjourned.

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business), That, at this day's sitting, the Fur Farming (Prohibition) Bill may be proceeded with, though opposed, until any hour.—[Mr. Touhig.]

Question agreed to.

Question again proposed, That the Bill be now read the Third time.

Mr. Moss

Powerful and cogent legal advice from lawyers conversant with EU law questions in a fundamental way whether the creation of an offence of keeping animals for their fur can be made to stick. Without the offence, the Bill collapses and a ban is impossible to implement. That is why it is vital to challenge that crucial element of clause 1.

In our opinion, the paucity of uncontested, reliable and corroborated scientific evidence about mink welfare has caused the Government to drop their animal welfare objections to fur farming, and to switch their justification for the ban to grounds of public morality. On Second Reading and in Committee, the Minister offered various definitions of what the Government meant by the term "public morality". The latest definition came in a written answer of 22 June. The Government admitted: Public Morality" is not susceptible to an absolute definition: it inevitably involves subjective judgment.—[Official Report, 22 June 2000; Vol. 352, c. 300W.] The Minister mentioned that the Government had received a letter from the European Commission responding to the six member states that objected to the Government's proposals. The Commission said that countries such as the United Kingdom and the Netherlands should wait for the proposed new EU legislation on fur farming before taking any unilateral measures.

Mr. Morley

The hon. Gentleman might find it helpful if I clarified that situation. Six representations were received, but only one was an objection. Four countries made observations, and one country wrote in support of the UK position. The EU said that it would be preferable to wait until a forthcoming report on animal welfare was available, but that is irrelevant to the Bill, which is being introduced on the basis of article 30 of the European convention on human rights. That article has to do with public morality, not animal welfare.

Mr. Moss

I accept that the Bill is being introduced in line with article 30, but the Commission has advised the Government to hold on before acting unilaterally in passing legislation. The reason is that the Commission is bringing in new directives and regulations that relate to fur farming throughout the whole of Europe. When those regulations are introduced, it may be even easier for countries to object to what the Government propose in the European Court.

Mr. Hogg

Does my hon. Friend agree that the Government are introducing the Bill now rather than waiting for new proposals from the European Union because it would be extraordinarily difficult for them to bring forward a Bill prohibiting fur farming when a European Union regime is in force?

Mr. Moss

My right hon. and learned Friend makes an excellent point. The Bill represents a high-risk strategy. It must be obvious, even to this blinkered and politically correct Government, that these provisions will be challenged in the European Court by significant numbers of EU member states. That could be a prolonged and costly exercise, and I wonder whether the Treasury will countenance what the Minister is doing.

What costs are likely to arise, and who will foot the bill? No doubt the Treasury will say that any costs of litigation will have to come out of the budget of the Ministry of Agriculture, Fisheries and Food—which we already know is under considerable pressure.

The Bill is, as we know, supported by Labour Members, probably on a three-line Whip. They are determined to oppose fur farming—or, more accurately, those who wish to wear fur as part of a legitimate life style—and they are determined to force their views on the rest of us. I can put it no better than Roger Scruton, who said in a recent article that to imagine that we have the right to outlaw those life styles merely because they get up our class-conscious nose is to base our legislation not on public morality but on private snobbery.

10.5 pm

Maria Eagle

I do not intend to detain the House for long, but I wish to make a couple of remarks about the Bill before it goes to the other place, and shortly thereafter, I hope, becomes law.

I welcome the Bill. I listened with care to the debates on my private Member's Bill in the previous Session, and to those at all stages of this Government Bill. We have rehearsed some of the arguments again this evening on Report. However, I note that, despite much of the sound and fury and occasional flights of fancy about furry sheep that we have heard from Conservative Members, at no point thus far in the proceedings of either Bill have they sought to divide the House. It will be interesting to see whether they do so in due course.

The Bill will be welcomed by the majority of the public, by right hon. and hon. Members on both sides of the Chamber, and even by the Fur Breeders Association, which represents all the remaining fur farmers in this country. If I were to confine my feelings about the Bill to one sentence, it is this: I welcome it because it will end the cruel practice of keeping essentially wild animals in extremely small cages merely and solely to collect the commercial value of their fur.

The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), who has taken part in many of our deliberations during the proceedings on both Bills, and whom I have listened to with some respect, called this an odious little Bill. I beg to disagree with him: I think that it is a humane little Bill, and I commend it to the House.

10.7 pm

Mr. David Heath

I agree with the many right hon. and hon. Members who have spoken at various stages of the Bill's proceedings that it is a pleasure to reach Third Reading, especially having listened to some of the deliberations that preceded it. I congratulate the Parliamentary Secretary on taking up this measure and making it a Government Bill. My view is that it always should have been a Government Bill. By that I mean no disrespect to the hon. Member for Liverpool, Garston (Maria Eagle) or my hon. Friend the Member for Lewes (Mr. Baker), who brought forward a similar Bill previously. However, Government legislation is appropriate in this area.

Fur farming is an anachronism, and the public are out of sympathy with it. However, that is not reason enough to ban what has hitherto been a legal activity, and Parliament must take that matter extremely seriously. Nor do I think that we should act out of our personal taste or distaste for the activity and its consequences. If I have any difference of opinion at all with the Minister, it is about whether public morality or animal welfare comes first. To me, the public morality lies in the indefensibility, in animal welfare terms, of keeping in a small cage an animal which, as the hon. Member for Garston said on Second Reading, is a solitary carnivore, territorial in nature, semi-aquatic and, in its wild state, used to roaming over large areas of countryside. Given the intensive circumstances that are necessary for fur farming, I do not believe that it is possible to bring the detention of those animals up to standards that are acceptable in animal welfare terms. That is why I think that the Bill is to be welcomed and should command support.

The important issue of compensation is addressed in the Bill. I would not be happy to support it were there not adequate measures for compensation. I have to say that we have heard more from Conservative Members about the European convention on human rights over the past three or four months than in the previous 20 years. It is extraordinary that this measure, the incorporation of which into British law was so vigorously opposed by Conservative Members, is now seen as the touchstone for the appropriateness of every clause and sentence of legislation. Well, so be it.

We have had a declaration of compatibility for the Bill from the Minister. Were is not for the compensation provisions, the Bill would not be compatible with the European convention. I did not seek to intervene on the amendments that we discussed in the previous debate, but I have to say that if the compensation mechanism was unfair in its application or insufficient to meet the legitimate needs of those affected, the Bill would fall foul of the European Court. So it is incumbent on Ministers to get the compensation scheme right, and I am confident that they will do so. It is a prerequisite for completion of the passage of the Bill.

The last point is whether we have to wait for the European Union to take Communitywide action on fur farming. Sometimes we have some topsy-turvy debates in this place, but when I hear the Conservatives argue that we should not take a decision in the British Parliament on what happens in Britain because we must wait to be overruled by the EU, I fail to understand the position of that party on anything. That view is shared by many people across the country.

The Liberal Democrats support the Bill. I honestly do not know what the Conservative position is. We have heard the Bill described as odious, vile, appalling and dangerous, yet it appears that the Conservatives are not prepared to divide the House on it. Could it be simply that, whatever Conservative Members' personal prejudices, they are afraid to divide the House because they know that public opinion is strongly in favour of the Bill? So are we.

10.13 pm

Mr. Cawsey

I have some valued friendships on this side of the House, so I shall be brief. I want to say a few words on Third Reading because I missed Second Reading due to an unexpected hospitalisation. While I managed to wangle a discharge to get down here in time to vote, the House did not divide on that occasion, which only shows that one cannot rely on the Conservative party for anything these days.

I congratulate my hon. Friend the Member for Liverpool, Garston (Maria Eagle) on all the work that she has done on the Bill. It is only through her determination that we have reached the stage that we are at today. I thank colleagues in the all-party group on animal welfare, which I have the honour to chair, for its support, and I am grateful for support not only in this House but in the other place. We hope that that means that the position looks good for the future.

Mink farms do not replicate the semi-aquatic environment that mink need to thrive. Mink are difficult animals, as all hon. Members have acknowledged. They are non-indigenous, and they can cause mayhem in the country. Conservative Members made much of recent escapes of mink and blamed animal rights groups for them. I agree with my hon. Friend the Minister that all escapes are to be condemned, but it is worth reminding ourselves that historically the feral population of mink came about as a result of poor husbandry on mink farms, not the activities of animal rights groups. So the fact that we have mink in the countryside now is the fault of neither one side nor the other. They are both responsible and all escapes should be condemned. The point is that the only way to prevent future escapes is to ensure that the Bill becomes law and that mink farms are abolished in this country.

The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) referred to the Bill as "an odious little Bill" several times. I disagree with him, although it would be wrong not to say that as he was speaking, the words "little" and "odious" were in my mind.

Mr. Deputy Speaker

Order. That was an unworthy remark, and I ask the hon. Gentleman to withdraw it.

Mr. Cawsey

I withdraw it and apologise to the House.

The issue is whether we believe that animals should be kept coley and primarily for the value of their fur. I do not, and I believe that most hon. Members do not. The Bill has warm support in the House, and I hope that it will have support in the other place and that members of the British public will support us for passing it.

10.14 pm

Mr. Hogg

I oppose the Bill. It is quite wrong and I do not resile from my comment that it is an odious little Bill. I oppose it on principle and on grounds of detail. I shall deal first with the detail—I can do so quickly as I have already covered it; it concerns compensation.

Let us be absolutely plain about the matter. The compensation set out in the Bill is quite inadequate. There is an obligation on the Minister of Agriculture, Fisheries and Food to produce a scheme—that he must do. However, the Bill includes no provision that any particular element of compensation should be incorporated in the scheme. For example, we have been talking about compensation for loss of income, but there is no mandatory obligation on the right hon. Gentleman or his colleagues to include such a measure in the scheme.

Let us be clear too that, subject to any consideration of Lords amendments, this is the last time that the House will discuss the compensation payable under the scheme because, as it will be introduced as a statutory instrument subject to the negative procedure, we simply shall not discuss it. The scheme will be introduced by a Department operating within financial constraints, in the knowledge that there will be clawback under its budget. We can be sure that the scheme will be a mean one and that we shall have no opportunity whatever to expand on it. The measure is defective in detail because there is no mandatory requirement to include certain desirable elements in the compensation scheme. That is the first point.

The second point is not central, but it is of some importance; it is in regard to Europe. I have come to the view that we should not impose on British producers and farmers unilateral restrictions on grounds of welfare that are not matched by commensurate requirements elsewhere in the European Union. I know perfectly well that I was a member of a Government who did introduce such provisions. We introduced a range of unilateral measures—in respect of pigs, for example—that were not matched in Europe. That was a mistake. At the time, I made it clear that we should not do that again while I was a Minister. I am very much against imposing on UK producers requirements that are not matched in the EU, nor, indeed, outside the EU.

Those are minor points. My main point is that the Bill is wrong in principle. What is the justification for the Bill? We must ask ourselves that question. There are two possible justifications: the first is on welfare grounds; the second is that the practice is unethical, immoral and so on.

I shall deal first with welfare. I listened carefully to the Parliamentary Secretary. I read several of his observations in Committee. I have also read the speeches made by the hon. Member for Liverpool, Garston (Maria Eagle). She argues the welfare cause rather more than it has been developed by the hon. Gentleman today. However, he made it wholly plain that the welfare arguments are not the crux of the matter. He said that the killing was unnecessary. It is to be banned because it is unethical.

If we were debating the issue on welfare grounds, I should have more sympathy. It is at least possible that mink cannot properly be kept in conditions of captivity. If that were so—if it were a proven fact—I should give serious consideration to a prohibition. However, that is not the case that is being put forward, because—I suspect—of the European dimension.

It could also be said that the animals can be kept only in certain prescribed conditions that might have the effect of making the business uneconomic. If that was the position, I would give that serious consideration too, because if the Bill had a genuine welfare foundation, it would be proper for the House to respond. But I do not actually believe that that is the position.

The position that I believe to be the case—and, to be fair to the Parliamentary Secretary, it is the position that he declared in his Third Reading speech—is that he regards the keeping of these animals for fur as immoral, unethical and improper. In other words, he is elevating his own moral judgment—and, to be fair, that of his hon. Friends too—and saying that because they deem it to be unethical and improper and immoral, it should be made illegal. That is where I really do part company from the hon. Gentleman, on the ground of principle. I believe profoundly in liberty, and in a free society people do have a right to do those things of which other people disapprove. It is not a free society if the individual is allowed to do only that of which the majority approves. Within a free society one has a right to sin; one has a right to choice; one has a right to make these moral elections. We are being denied that right, and I say that that is profoundly—

Mr. Martlew

The right hon. and learned Gentleman obviously feels very passionately about this. Does he intend to divide the House on the matter?

Mr. Hogg

I will give an honest answer: no, I do not, because I do not have the troops. [Interruption.] The hon. Member for Falmouth and Camborne (Ms Atherton) may find that funny; I am answering the question. I do not intend to divide the House, because the troops are not here with which to divide the House. The point, none the less—[Interruption.] I can be accused of anything, but I cannot be shouted down. I propose to assert a principle.

Mr. Deputy Speaker

Order. Let me assure the right hon. and learned Gentleman that he will have the help of the Chair in ensuring that neither he nor any other hon. Member will be shouted down in this House.

Mr. Hogg

We are at risk of losing a principle. In a free society, people do have a right to so order their affairs as to do that which they wish to do, unless there is a compelling reason against it. I ask, what is the compelling reason in this case? We know full well that many species and classes of animal are kept in unsatisfactory conditions or in conditions which are not natural, for the use of mankind. We keep chickens in battery cages.

Mr. Morley

I want to make it very clear to the right hon. and learned Gentleman that, in coming to a position of public morality, issues such as welfare and the impact on the environment are all part of taking into account the morality of a decision. Any kind of rearing system which has the effect of animals chewing off their own tails is questionable ethically and morally. How far does the right hon. and learned Gentleman take his position about the freedom of individuals? Is he arguing that people should have the right to use drugs, for example?

Mr. Hogg

The Parliamentary Secretary has given the game away, because if he wants to talk about the conditions of animals, he had better address the keeping of chickens in battery cages. [HON. MEMBERS: "We are."] We are, but let me remind the hon. Gentleman how we are—

Mr. Keith Bradley (Treasurer of Her Majesty's Household)

What did you do? Did you do anything?

Mr. Hogg

We did, in fact. We pushed forward within the European Union and secured a new regime on the size of cages and the conditions. The point is that in regard to the keeping of chickens in battery cages, which I have always found a rather disagreeable practice, the approach that the House has taken in the past, and the approach that the European Union has taken, has been not to prohibit that but to require a higher standard of husbandry.

We are entitled to ask why this distinction of principle is being made as between, for example, the keeping of chickens, which is the example that the Parliamentary Secretary chose, and the keeping of mink. It is not good enough for the hon. Gentleman to say that questions of welfare go to the questions of public perception of morality, because in one sense they do but it is not his primary argument. Had the issue of welfare been the primary argument, that is what he would have advanced as the primary cause. In fact, he and his colleagues do not like keeping mink for the purposes of fur wearing. I suspect that they do not like individuals wearing fur—I am pretty agnostic about the wearing of fur, save that I do not want endangered species to be eliminated.

People who take that view should try to persuade people not to do it. That is persuasion. They should not use the criminal law to impose on their fellow citizens their own moral prejudices, which is wrong. [Interruption.] I hear wails, moans and groans from the Opposition and I am not in the least surprised. One of the characteristics of this Labour party is that it fails properly to weigh up the rights of fellow citizens. The Conservative party stands for freedom and liberty—[Interruption.] Oh yes it does, and the jeers and the restrictive measures—the proposed fox hunting Bill—come from members of a party who want to impose on their fellow citizens a narrow morality.

I am against the Bill and I hope that in another place it will be deeply amended and—even better—thrown out.

10.26 pm

Mr. Gray

My right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) made a powerful and unanswerable libertarian argument. The catcalls and grins from Labour Members demonstrate that they do not understand libertarianism. They do not understand freedom of the individual; all they understand is central control and imposing their view of morality on the rest of us.

I hold no particular candle for fur farmers. I have none in my constituency. I am sorry to say that I think that I own no fur and neither does my wife. I have no reason to believe that fur farming is necessarily a good thing. My opposition to the Bill is based not on the principle, but on the Bill's sheer illogicality.

I see the hon. Member for Liverpool, Garston (Maria Eagle) returning to her place. [Interruption.] I was not implying that she had left it. I was about to, but then realised that she was delivering a note to the attendant, so I forgive her. I did not intend to impugn her attendance record. She has been here throughout the debate and has diligently pursued the matter for about three years, so I was not suggesting that she was slacking in any way.

When the hon. Lady brought her private Member's Bill to the House, her primary argument was animal welfare. She said that it was the wrong way to bring up these animals, it was disgraceful and it should not happen. That may well be a powerful argument. I am strongly committed to improving the standards of animal welfare wherever we can. However, that being so, there are many ways to do it by regulation: improving the way in which these animals are brought up.

There are about 8,000 mink farms in Europe. We have 12 or 13 in this country and, by banning them, we will not be improving the lot of the 500,000 mink, or thereabouts, in Europe. It will be a politically correct gesture within these shores that will achieve nothing for animal welfare. Indeed, one could argue that we are harming animal welfare, in that we are exporting the production of fur. We are saying that we do not want it here, but will be happy for it to continue in Russia, which is one of the biggest producers of mink—mink produced under some of the worst conditions. One might argue, as I think my right hon. and learned Friend the Member for Sleaford and North Hykeham did, that if we are concerned about animal welfare, we should encourage good practice here, where we can control welfare standards on the farms, rather than exporting them to Russia, Mongolia and elsewhere.

An interesting change came about between the Bill introduced by the hon. Member for Garston and this Bill. It was first raised by the Parliamentary Secretary during a MAFF press conference on the issue and he has raised it several times today. We have got away from the animal welfare arguments. I think that the Government realised that they were not sustainable. If one is talking about animal welfare, this measure is not the way to put that right.

All of a sudden, the Government raised the issue of public morality. Let us think for a few seconds about that. First, what is public morality? Their arguments on this Bill, on fox hunting and on other measures of the sort are that the practices that should be banned on the grounds of public morality are practices that the majority of people dislike. They constantly talk about polls and say that 80 per cent. of people in the United Kingdom dislike fur farming. They also use that argument against fox hunting, saying that the majority of people in Britain dislike it.

I would argue that true public morality is about looking after the interests of the minorities—the small battalions—and the people who cannot look after themselves. For the Government to ban something because most people say that they want it banned is to abdicate their responsibility and to say that they are unable to make decisions on behalf of the people, so they will govern by opinion poll.

The Bill puts the Government in a peculiar position. We know that the business of the House and the other place is in the most appalling logjam, and all kinds of rumours are circulating in the Corridors as to whether or not the Government will be able to complete the passage of their important Bills. Even my constituents are asking why, if that is the case, we are wasting our time dealing with this Bill. There are only 13 fur farms left in the United Kingdom. Even if the Government hate fur farming, we should be dealing with health, education, law and order, and defence. [Interruption.]

If Labour Members will listen, I will suggest a reason why we are dealing with this Bill. It has nothing to do with animal welfare or public morality, which the Government have not got around to defining; it is about political correctness. They want to demonstrate that they are friends of the cuddly animal, but the Bill is the enemy of the cuddly animal. If they raised the standards of UK fur farms, they would be friends of the cuddly animal.

There is a further fundamental illogicality in the Bill. The Government could come to the House and say, "We hate the wearing of fur. We believe it to be immoral. Fur is a disgrace. We shall ban the sale of fur in Harrods and the wearing of fur in public places. We shall ban the international trade in fur." Most of that trade is conducted in London. If the Government said that, I would wholly disagree with them and think it an absurdity, but it would be an intellectually honest thing to say. The Government have introduced such bans on ivory and on the importation of certain animals. They have said that the trade concerned is immoral and disgraceful and that they will not have it—but they will not do that in this case.

The Government know that the wearing of fur is on the increase in the United Kingdom, as are the sales of fur in Harrods and elsewhere. Fur is imported from Russia and sold to America, but the trade is conducted here in London. The Government are not banning that. They do not have the moral courage to say that it is a disgraceful activity and that they hate fur. All they say is, "We know a group of 13 farmers and we believe that, politically, we would achieve an awful lot by coming down heavily on them. Despite the fact that there are 8,000 other fur farmers in Europe, we can demonstrate that we are hard on such people. We are politically correct, wonderful new Labour and we will sort out the ills of the world by wasting parliamentary time dealing with something in which the people are not the slightest bit interested." [Interruption.]

Once again, we see new Labour for what it is. All that Government Members can think about is whether or not it is time to go home. We are ready to discuss these matters for as long as it takes, and if we divided the House, as one Member has constantly suggested we should, Third Reading would take considerably longer than it otherwise would. Before he leaps to his feet, I should say that I have not discussed the matter with my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss), but as far as the Conservative party is concerned, this is a matter of individual conscience and there is no Whip on it.

I, for one, will not seek to divide the House because it is important that we should make these powerful arguments, and I am confident that noble Friends and peers from other parties will want to develop some of them in the other place. They will want to point out the illogicality in the Bill and its incipient and unpleasant political correctness. They will want to try to sort out compensation for the victims of that political correctness. They will seek to correct this badly drafted Bill, which was introduced not for reasons of animal welfare or public morality, which the Government have not defined, but simply to try to brush up the Labour party's rather tarnished credentials. It is an attempt to extend the Under-Secretary's career of political correctness and to achieve what he has sought throughout his life, as an animals rights activist, and to ban something—

Mr. David Taylor (North-West Leicestershire)

Will the hon. Gentleman give way?

Mr. Gray

I am sorry. I am winding up my speech. Anyhow, the hon. Gentleman has not been here all evening. He wants a little quote for his local paper. I will not give way to him for that reason. He might like to attend for the entire debate. If he wants to take part in the debate, he should attend for the entire debate and not walk in and try to intervene on an hon. Gentleman's peroration.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food has spent a lot of his life campaigning for what he describes as animal rights. He has spent a lot of his life saying that animals are sentient beings and have the same rights as us. His friends in the animal rights movement are for ever saying—it is one of their famous quotations—that a dog is a cat is a human being; there is no difference between them. I do not agree.

My father used a great expression which annoyed my mother a great deal. There was nothing sexist in the remark. He used to say, "Men are the lords of creation." He simply meant that human beings are the lords of creation. I believe that to be the case.

I believe it reasonable that human beings should use animals' meat to eat and their fur to wear. None of that seems unreasonable. The Parliamentary Secretary thinks it is, but he should not use such a Bill to expose his personal prejudices and to impose on people out there, as my right hon. and learned Friend the Member for Sleaford and North Hykeham convincingly argued, a Bill that will interfere with individual liberties and achieve nothing for animal welfare at all.

10.36 pm

Mr. Paterson

It is a pleasure to speak on the subject. I think that it is for the last time, as we have thrashed the matter out over many months. I declare that I have no constituency interest in the matter. I used to be remunerated in the leather trade. I stress that there is no connection between the leather trade and the fur trade because the leather trade processes a by-product of the meat trade. We are discussing the banning of raising animals specifically for fur.

I believe that a pluralist society cannot be run peaceably if the majority abuse their power over the minority. We are talking about a tiny number of people: 11 fur farmers own 13 fur farms, as against 8,000 fur farms on the continent, where, as I have said, it is a significant business—fur farming makes up perhaps 4 per cent. of Danish GDP.

The central nonsense of the Bill remains. I know that Labour Members do not seem to like evidence from Europe this evening, but I have a fax from the marketing department of the Charente Maritime Department in France. It states that 40 per cent. of rabbits are raised for meat and 60 per cent. for fur.

That is the central nonsense of the Bill. If it is passed, a British citizen could be fined £20,000 for keeping a rabbit in a cage, despite adhering to a raft of UK and European regulations. Exactly the same rabbit could be kept in the same cage and could be legally sold on for a profit. The difference is that the first rabbit would be killed for its fur and the second for its meat. That is totally illogical. Labour Members have failed to address that at any stage on the numerous opportunities that they have had to do so.

I do not want to go into the great raft of regulations governing those animals. If there were a case of animal cruelty, we could consider banning the activity, but the man in charge of ensuring that the activity is not carried out cruelly is sitting before us. He is the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. He is in charge of the Mink Keeping Order 1997, the Agriculture (Miscellaneous Provisions) Act 1968, the Welfare of Animals (Slaughter or Killing) Regulations 1995, the 1991 Council of Europe convention on the protection of animals kept for farming purposes, and the EU directive on farm animal welfare.

The Parliamentary Secretary is the man who should be ensuring that there is no cruelty. There is a library of regulations that he should be enforcing. If there is cruelty, he is the man in charge and at fault, but no one in the course of debates on the Bill has talked about animal cruelty. Members have fallen back on something extraordinary called public morality, which appears to come down to the ability of the majority to trample wilfully on the minority for doing something that they do not like.

It is immoral to force the United Kingdom into what might be a huge legal battle with determined, well financed industrialists on the continent. As I have said, there are 8,000 fur farms on the continent and they have substantial financial resources. They have made it clear to me that they will confront the UK Government head on. They are convinced that the measure is incompatible with the European convention on human rights and that it breaches articles 28 and 29 of the EC treaty: the principle of proportionality and the principle of non-discrimination. They have made it clear that they are determined to stop it.

Today, I received a telling message from Wim Verhargen. He said that he was still determined to stop this measure in the European Court and that it was ridiculous to be able to buy a Government. He added that it was not a welfare discussion. He said that it opened the door to banning many other activities on the ground of public morality and that it was a very dangerous precedent to ban an economic activity in which welfare was not a problem. I heartily endorse that view.

The conditions for compensation are wholly inadequate. They are not detailed enough and they are not mandatory. The figures mentioned in the explanatory notes are derisory. I talked today to Mr. Gunter Pfeiffer, the only fur farmer in Europe to have a farm closed. Unfortunately, it was an extremely crackly mobile phone line and, although I learned my German in Vienna, he spoke with a strong Austrian accent. Still, the gist of the matter is that he was paid to cease his business. Although the law still allows fur farming in lower Austria, he was paid a lump sum of 4.7 million Austrian schillings to close his farm. To show what a pointless exercise that was, he moved his whole operation to the farm that he already owned in the Czech Republic, just 30 km away.

Exactly the same thing could happen in the United Kingdom. We have a large farm in the south-west that has a sister operation in Denmark. There will be no sum gain to mink happiness. Instead, there will be a huge bill to the British taxpayer. If there are about 25,000 female animals in UK mink farms and it costs £400 to compensate for each of them, the overall cost will be just over £10 million. That is a long way from the figure mentioned in the explanatory notes.

I do not believe that the Minister has gone into the issue in detail. For him it is a great victory. We know that the Labour party has received sums from animal welfare groups and that it considers it a triumph to get the Bill through. The Minister will be congratulated by Labour Members. However, it is immoral to spend a whole evening debating this issue when this country faces many much greater problems. We may have to spend £10 million of taxpayers' money to compensate for a business that is legal on the rest of the continent. The Bill is unsatisfactory, because it will launch the Government headlong into a lengthy and expensive legal battle with our European partners.

Question put and agreed to.

Bill accordingly read the Third time, and passed.