HL Deb 13 July 1981 vol 422 cc1054-9

6.55 p.m.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)

My Lords, I beg to move that the draft Meat and Livestock Commission Levy (Variation) Scheme (Confirmation) Order 1981, a copy of which was laid before the House on 19th June, be approved. This scheme amends the Meat and Livestock Commission Levy Scheme which is set out in the schedule to the Meat and Livestock Commission Levy Scheme (Confirmation) Order 1979. It provides for increases in the maximum charges leviable on each animal from 90p to £1 in respect of cattle, from 16p to 24p for sheep, and from 30p to 40p for pigs. The maximum charge of 12p for calves remains unchanged.

The setting up of the Meat and Livestock Commission has, in the Government's view, been well justified. The commission provides a wide and important range of services for the livestock and livestock products industries. These services benefit all the interests in these industries, ranging from the producer through to the consumer. They include livestock improvement work, marketing and economic services, fatstock certification, weighing and classification services, and support for scientific projects. All have played a vital part in the industry's progress and development.

Of particular interest has been the development of the commission's meat promotion executive, which was set up in 1975. From modest beginnings the executive's work has grown steadily to provide an effective stimulus to the demand for British meat both at home and, increasingly, abroad. The commission's report for the year ending 31st March 1980, which was laid before Parliament, provides detailed information on the commission's activities. For this reason, I would not wish to dwell on them further, but I should like to compliment the new chairman and the other commissioners on the way in which they have discharged their statutory duties at a time when, as with the country as a whole, the meat and livestock industry is experiencing very severe economic difficulties.

If I may, I should like to say just a few words about the commission's finances. Since Parliament approved the last levy scheme somewhat over two years ago the commission has undertaken a major review of its activities and its budgetary provision. This was stimulated by the natural concern of the industry at a time of increasing costs that the levy income should be kept within reasonable limits. The commission carried out a thorough appraisal of its activities. It concluded that significant economies had to be made, and after detailed discussions with the major interests in the industry it produced a budgetary plan for three years which received general approval as a major step forward in the financial management of the Commission's affairs.

We in the agricultural departments were kept in close touch with these developments. Some hard and even painful decisions had to be made, and I would pay a tribute to the spirit of compromise and to the determination to reach a solution which characterised the attitude of all those who were concerned. The Commission achieved reductions in expenditure which have enabled them over the past year or so to hold the levy below the maximum rates which had been provided for in the 1979 order.

In parallel with the review of the commission's budgetary plans changes in its arrangements for consultation with the industry were also worked out. The commission has set up a financial liaison committee, and also a group of joint commission/industry steering committees in order to examine particular activities and to make recommendations on such matters as the order of priorities and changes in the programme of work. The industry forum has been retained as the formal basis of consultation with all industry organisations, and the statutory consumers committee has also been retained without change. All the indications are that this new consultation structure commands the confidence of the industry and is working well.

There was general agreement that within the budgetary programme which is now being followed the commission's expenditure on meat promotion should be retained at broadly current levels allowing for inflation. It is in order to maintain, but not to increase, these levels that increases in the maximum rates of levy are now being sought. These proposed increases have been the subject of a thorough consultation with the industry during recent months. There is a wide measure of agreement on them, although, not entirely unnaturally, a few industry organisations have raised specific objections to the size and to the timing of the increase in levies which is proposed by the commission.

The Government appreciate the reasons for these objections, but we believe it essential that the commission should be able to raise the financial resources in order to continue the work which is generally supported by the industry. The purpose of the order is to raise the ceiling on levies. The precise timing of levy increases within that ceiling is of course a matter for the commission, in consultation with the industry. That the commission is very much aware of the need to minimise its demands on the industry is demonstrated by its decision to defer the actual levy increases which were planned for 1st April last to 1st October. I commend the commission for taking such a positive and practical step at this time. I am sure there is now a much greater mutual understanding and confidence between the commission and the industry and that this provides a firm base for its future development. The order will, I believe, enable it to maintain its finances on a sound basis and thereby to continue its important task of promoting the efficiency of the meat and livestock industry in this country. I ask your Lordships to support the Motion. I beg to move.

Moved, That the draft order laid before the House on 19th June be approved.—(Earl Ferrers.)

7.2 p.m.

Lord Bishopston

My Lords, the House will be grateful to the Minister of State for those remarks in introducing the order. It is an important order which gives the House a brief opportunity to look at some of the problems facing the industry and the Meat and Livestock Commission in its important work. I am pleased that the Minister of Agriculture regards the MLC as an important body and that it has not suffered the fate of many Quangos in being slaughtered, if that is the appropriate term to use in this situation. Indeed, the industry values its work, for it provides a wide range of services for both the producer and the consumer, and not only for the home market but for the international market as well.

When an MLC order raising levels in the maximum charges was debated in another place in 1979, I was the Minister of State responsible for putting it before that House. That order followed a review of the workings of the MLC after some difficulties. Among other things, the representatives of the industry and the various interests concerned sought much greater consultation, and I was glad to hear the noble Lord make a brief reference to that. It was clear in my time that the MLC could improve its consultation procedures, and the policies for such were detailed in the report to which the noble Lord referred. I hope he will tell us a little more about the improvements in that direction.

The report of the MLC to which the Minister referred, for the year ended 31st March 1980, speaks of a fundamental reappraisal of its future role and programmes", and among the other restrictions is a reduction in the levy to be allocated to general development work in 1980–81 of about 20 per cent. of the previous year's level, and raising it to only 90 per cent. of that year's level in the two following years. Reductions may be the order of the day in many directions, but one must keep a careful balance between cuts in expenditure and reductions in the amount of work, along with the needs of the industry if it is to remain competitive and stay in the leading role it has occupied for many years.

Meat promotion work was not to be affected, but general development work was expected to be cut by about £1 million in 1980–81, not allowing for the effects of inflation. The report, rather naively, I thought, claims that cuts of that magnitude cannot be made without sacrifice. Indeed, the pig testing station at Corsham, Wiltshire, was to close in the autumn and the MLC was to cease to operate its pig AI centre at West Buckland, Somerset.

The introduction to the MLC report for the year ended 31st March 1980 goes on to say: The stringent cuts in MLCs' support for research, especially the ending of the £290,000 annual contribution for commissioned projects at the Meat Research Institute, have been made with reluctance and, understandably, concern has been expressed within the industry about the withdrawal of research funds. It is not, however, a complete withdrawal; while research sponsorship will be drastically reduced over the next three years, a small contingency fund will be maintained to enable a few approved research projects of special need to be undertaken". That may be all very well but one must look at the effects on an industry which needs to be even more competitive in the home and international situation. The report goes on in the introduction: The amounts of levy allocated to meat promotion and to development work are now practically equal". But it goes on: Competition in the food markets, both home and international, is intense and is likely to increase. In that context work of meat promotion must continue at a high level … The British meat and livestock industry needs to be technologically equipped in every sector to meet the increasing challenges from other countries and other foods. No industry can expect to succeed in the future without up-to-date knowledge and technical information to guide its progress". Noble Lords will agree with the sentiments expressed very concisely in that introduction, but one wonders whether the needs of the industry can be met and whether research and development can be sustained in a situation of the limited finances available. Noble Lords may say it is a matter for the industry to find the cash in some way and that too high a levy could cause difficulties. I appreciate of course that we are not tonight discussing the level of the levy to be imposed but the ceiling which will allow the commission to act as it sees fit in the future.

While, therefore, we support the order for the revised levy ceilings, I am sure the House views with some concern the fact that the principal casualties are the research budget, the termination of the work of the evaluation of ram breeds of the past year and reductions in livestock improvement work in 1981 and 1982. This policy could in some circumstances be called the eating of the seed corn, for British livestock has been supreme in the world and can be maintained in quality and production only if we maintain, and indeed increase, the amount of money and resources spent on research and development, apart from on promotion in a competitive market both at home and abroad.

There is, as I said, no merit by itself in making cuts or reductions in expenditure because that is the order of the day. It is essential that the MLC looks at the matter very carefully to make sure there is a real balance, so that our industry—which, as I say, has been supreme—can retain its position in the international as well as the home sphere. The work of the MLC is valued by the industry and by producers and consumers, and I am sure the House will join me in paying tribute to the work of the commission and all those who are engaged in that work. However, concern should be expressed at the sense of pride, or at least feeling of satisfaction, which the Minister expressed in another place when the order was debated there on 7th July and when he said that the commission had achieved reductions in expenditure which had enabled it to hold the levy below the maximum rates provided for in the 1979 order for the previous year or so. That is all very well, but it must be considered in relation to other priorities, and I should like the noble Lord to comment on the position as he sees it and whether he is sure the industry can be sustained in the way it should be in the future.

With those few comments, my Lords, I pay tribute to the MLC for the work it does. I am glad the Minister has not chopped it but, rather, is allowing it to do its work. I hope the Government will see the need for the Government themselves to sustain it as far as possible in the vital work it does and will do for the producer and consumer in the future.

7.10 p.m.

Earl Ferrers

My Lords, I am grateful to the noble Lord, Lord Bishopston, for having been so kind and so gracious to the Government on this order, because he made one or two very pertinent points. He said that British livestock is supreme in the world, which indeed it is, and it is essential that we hold this position in the world, and anything which the Meat and Livestock Commission can do to encourage that can only be to the good. He said that he was glad that as a Quango it was not cut—or not "axed", I think was the word he used.

Lord Bishopston

I said "slaughtered".

Earl Ferrers

Slaughtered—that is even worse. I hesitate to inform the noble Lord that it is not actually a Quango. A Quango is generally accepted as being a body which is financed by the Government, whereas this is financed by the industry and therefore is not truly a Quango. But the difficulty that we are in is that the noble Lord—quite rightly—wishes to see the work of the Meat and Livestock Commission continued, research and development continued and promotion continued; and in a period (which we are in) of inflation and at the same time recession, it is difficult to achieve these things without increasing the demands upon industry to an even greater extent than at present.

That is why I would pay particular tribute to the Meat and Livestock Commission for the fact that they have really had a thorough review of all that they are doing and have tried to find out how they can cut their work in real terms. They have made a substantial reduction in real terms which then, of course, has to be upgraded for inflation. The result has been a pruning of the work undertaken by the Meat and Livestock Commission, which in the lone term may not necessarily be bad. There is bound to be a balance, and something must go. If you continue to do what you have been doing previously in a period of inflation, the imposition on that industry becomes too great, and I think the balance that has been achieved is about correct.

The promotional work will continue and I suppose that the research and development work of the essential parts will continue. Inevitably, research and development is an open-ended commitment. One can do more and more, but eventually one has to put a limit to it. I should like to see more research and development work done, but in the context of the present times we have to curtail that to a reasonable extent, and I think that has been achieved by what the commission intend to do.

The last year or two has been a difficult time for the commission and indeed for the whole industry, and particularly for those who are in the business of slaughtering; they have been through a very difficult time. But the positive response to that difficult time by the commission and the readiness of the organisations as a whole to play their part in overcoming these difficulties, have been immensely encouraging.

The noble Lord, Lord Bishopston, asked whether the efficiency of the Meat and Livestock Commission can be maintained. I have no reason to doubt that it can be maintained, but with any industry or any business at all, in times of inflation the only way that one can maintain efficiency is by being positively on the ball and aware of the difficulties which one is likely to encounter. I think the Meat and Livestock Commission are fully alert to these difficulties and I see no reason why they should not be efficient in the future. Indeed, they may well become more efficient. I am grateful to the noble Lord for his welcome to the order.

On Question, Motion agreed to.