§ 4.25 p.m.
§ Lord Carter rose to move, That a humble Address be presented to Her Majesty praying that the regulations be annulled.
§ The noble Lord said; My Lords, in moving this Prayer I shall speak also to the second Motion in my name on the Order Paper which deals with the Fresh Meat (Hygiene and Inspection) Regulations. I believe that the Motion on the same subject in the name of the noble Lord, Lord Willoughby de Broke, will also be discussed, so that we shall have a single debate on all three Motions.
§ As we are dealing with regulations laid under the negative procedure I have put down the Prayers to annul the regulations in the usual way to ensure that we secure a debate on these important regulations. The two Motions in my name and that in the name of the noble 409 Lord, Lord Willoughby de Broke, approach the situation from a different angle, but they all illustrate the anxiety that now exists regarding the operation of the new Meat Hygiene Service (MHS) which came into being on 1st April.
§ This is the first chance the House has had for a proper debate on the regulations, although we touched on the subject in the debates on the deregulation Bill last autumn when I moved and withdrew certain amendments so that discussion could take place at that time. It would be helpful if, when he replies to the debate, the Minister could confirm that the situation is now, as was forecast in October last year, that three agencies will effectively be concerned with different aspects of meat hygiene and food safety: the State Veterinary Service, the new Meat Hygiene Service and, with their continuing responsibilities for food safety, the local authorities. So much for deregulation and reducing bureaucracy.
§ The major concern, now that the MHS has started to operate, concerns the level of its charges. The Government have had to acknowledge that concern by the temporary reductions in charges that have recently been announced, operating for the first year. I am sure that the Minister will reply concerning these charges at the end of the debate.
§ I have received briefing—as I am sure other noble Lords have—from the National Farmers' Union, the Poultry Meat Federation, the Federation of Fresh Meat Wholesalers, the National Federation of Meat and Food Traders and the British Meat Manufacturers Association. To be fair, a number of them support the principle of the MHS, but all refer to their anxiety about the excessive charges being levied.
§ I have also heard from 10 abattoir owners, all comparatively small operators, who are extremely worried about the extra costs which they now face. They include an abattoir at Widnes which has increased costs of £25,000 a year; an abattoir in Anglesey where the overheads have been increased from 52p per tonne to £3.30 per tonne; a slaughterhouse in Wrexham, where the annual costs have increased from £22,745 to £54,600; and the Manchester wholesale meat and poultry market where there has been a 40 per cent. increase on an annual cost of £262,245. These are all small businesses which have spent large sums of money in recent years upgrading their premises to meet the requirements and standards of the European Commission. All now face what they regard as excessive increases in charges as a result of the introduction of the Meat Hygiene Service.
§ It would be helpful if the Minister could tell us how much of all that is due to directives from the European Commission and how much to the long-standing ambition of MAFF and the veterinary profession to get meat hygiene under centralised veterinary control. That is an ambition which, in the case of the veterinary profession, goes back over 70 years. I do not in the least disagree with the objectives, but it is important that in this debate we tease out how much of the new arrangement is due to the requirements from the 410 European Commission and how much to the long-standing ambition of MAFF to get meat hygiene under its centralised control.
§ The regulations were tabled on 9th March and they were extremely long and complicated regulations for a new organisation to start on 1st April. It did not give much time for discussion. At the time, the department's press release said that the new rules would implement the European Community directive on the welfare of animals during slaughter and killing, while at the same time maintaining the key welfare safeguards from our existing domestic legislation. It is important that we understand where responsibility lies, and perhaps we could be told how much is a direct result of directives from the European Commission and how much is due to the enthusiasm of the department.
§ There has been a substantial increase in the estimated running cost of the new organisation. On 9th March a press release from the department, when the regulations were laid, referred to a cost of £40.3 million, but a parliamentary reply on 14th March, only five days later, referred to a figure of £53.4 million for the first year of operation. It would be helpful if the Minister could explain the discrepancy between these two figures. As I understand it, the taxpayers' support is £15.4 million, plus the set-up costs of £5.2 million. That is a cost to the taxpayer in the order of £20 million, plus a start-up cost of £626,000 that was spent on the project team for setting up the new organisation.
§ I understand also that almost the first thing that the MHS did was to supply corporate ties to the 947 employees. Of course, we know that no self-respecting quango nowadays is complete without a corporate tie and a classy coat of arms. Considering all that has taken place, I wondered whether the College of Heralds would accept a coat of arms for the MHS consisting perhaps of a bureaucrat rampant over an abattoir owner couchant on a field stained red with taxpayers' and farmers' blood. I also wondered whether the corporate ties were in the same post as the 15 pairs of Wellingtons that were supplied to each meat inspector.
§ I understand that the Government are now recommending a maximum charge of £35 per hour for official veterinary surgeons engaged in MHS work. However, a survey by the British Veterinary Association in April 1993, which covered something like 400 official veterinary surgeons working in 600 slaughterhouses in 200 local authority areas, showed an average hourly rate of £25.70, so why the increase of nearly 50 per cent. in the past two years? I understand that a survey by the BVA taken in March 1995 confirms the considerable dissatisfaction that is felt over the handling of the transfer from the local authority system to the new arrangements.
§ It would be interesting to know how the competitive position of our farmers and our meat industry and the costs they will have to bear compare with the situation in other member states. For example, I understand that the veterinary charges in slaughterhouses in France and Southern Ireland are paid for out of government funds. Would it be possible for the Minister to tell the House how many European Union states have the equivalent 411 of a meat hygiene service, with all the costs falling on the farmer and the abattoir owner and during the setting-up period a proportion falling on the taxpayer?
I referred earlier to the understandable ambitions of the veterinary profession for something like 70 years to sec an increased role for the veterinary surgeon in meat hygiene. Unfortunately, The Veterinary Record of 4th March 1995 does not show much enthusiasm for what has happened in the run-up period of the new organisation. It says:
Next month will see the start in Great Britain of the national Meat Hygiene Service. It would be good to be able to report that things have progressed well and that all is set fair for a smooth transfer of responsibility for administering meat hygiene from local authorities to the new meat hygiene agency. Sadly, that is not the case. Despite vigorous campaigning by the BVA, events over the past year tell a sorry tale of delays, poor communication and missed opportunities on the part of MAFF and the fledgling MHS. As a result, the aim of ensuring adequate veterinary supervision of meat hygiene—so central to the safe operation of meat plants and, indeed, the principle on which the service was based—might not be realised".
With a further reference to the bureaucracy which is now involved, there was a report in the Farmers Weekly on 7th April, only last week, referring to the last-minute avalanche of paperwork that had confirmed the worst fears of the slaughterhouse owners. I quote:
Before we can begin work in the morning there must be a pre-operation inspection, and three forms to fill in, and a further 27 must be made during the day. Abattoirs are going to be forced to employ an extra person just to fill out the paperwork".
§ Also, it would be helpful if the Minister could tell us what is the position regarding the number of veterinary surgeons required in order that the MHS can operate properly. Estimates in 1992 suggested there should be some 300 vets, both full-time and part-time, to provide a proper service. I believe that the figure now is 167, but the costs have increased from £32 million when local authorities were providing a similar service to £54 million now. Surely the increase cannot all be accounted for by the corporate ties and Wellington boots. It certainly is not on veterinary surgeons. Perhaps the Minister could tell us how many vets will now be engaged in the MHS work.
§ One also wonders just how close this new MHS is to what actually happens in slaughterhouses. A letter from the MHS in Cardiff requires 14 days' written notice from the operator where there is a change in the plant requirements for inspection. During this 14 days, it is clear from the MHS—it is stated in terms—that the operator is liable for all MHS charges, even if the throughput has gone down. So a slaughterhouse owner who is tied to the market has to absorb the losses inherent in market fluctuations, but the MHS has carefully insulated itself from those pressures. The original publicity material at the time of the tendering process and during the setting-up period referred to flexibility to reduce or increase attendance to suit seasonal variations in plant operating time, but it seems that the flexibility has to be at 14 days' written notice.
Having criticised the way in which the MHS was set up and the way in which it appears to have started its operations, it is fair to ask whether there was an alternative. I think the alternative was set out extremely
well in a speech made by the noble Earl, Lord Howe, at a seminar on meat hygiene organised by the Association of District Councils in October 1993. He said then:
The Government has been listening to the criticisms which have been made both by local authorities and by the industry, of the prescriptive nature of the current controls. Where it is possible to make the regulations and guidance less prescriptive, and more based on an assessment of risk, we will do so".
§ The noble Earl then set out clearly the plans of the Government at that time so far as the local authorities were concerned. The plans would consist of in traducing a slaughterhouse performance monitoring system to focus advice and enforcement on real hygiene risks; publishing a leaflet for business on meat hygiene enforcement—government, local authority and industry rights and responsibilities; consulting on new guidance on veterinary supervision; publishing a MAFF strategy document for research on meat hygiene and inspection; and continuing to work in the EC for review of existing inspection requirements and for the modification of meat hygiene directives to target statutory requirements on key public health issues. All that was to do with the local authority responsibility, and then of course the Minister tagged on the establishment of a meat hygiene service.
The final quotation says it all:
A major part of this work is the publication of our proposals for a system of assessing the performance of meat premises in relation to hygiene. We propose that this system should be used by MAFF, together with each local authority, to monitor performance and standards, and to identify for the operator where improvements are needed. We believe that this will make it much easier for MAFF as the licensing authority, and OVS and EHOs working for the local authority, to focus on the real hygiene problems which need to be addressed. I believe that it will also provide an effective framework for demonstrating that the goal of a 'single standard of safe, properly inspected meat is being achieved".
§ All that was to be done in the autumn of 1993 through the existing local authority systems. I am sure that it could have been done for a lot less than the £21 million that has been, or will be, spent on establishing the new system.
§ The Government's intentions were well meant. It has been a long-standing ambition inside the department and the veterinary profession to bring meat hygiene under centralised veterinary control. But we have had a sorry tale of well-meant intentions confused by bureaucratic muddle and the inbuilt tendency of new quangos to be unable to control their costs. This is a self-regulating agency not a quango; it is a SEFRA, a self-financing regulatory agency. I hope that when the Minister replies he is able to bring the House good news regarding the ability of the department to intervene to control the heavy costs being placed on slaughterhouse owners.
It was a US judge, Mr. Louis Brandeis, who got it about right in 1928, when he said:
The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding".
§ I beg to move.
§ Moved, That a humble Address be presented to Her Majesty praying that the regulations be annulled.— (Lord Carter.)413
§ 4.41 p.m.
§ Lord Willoughby de Broke
My Lords, the Motion standing in my name asks the Government to look again at the meat hygiene regulations which have been introduced to translate EC directives into national law. The regulations require the creation of a new government agency—the Meat Hygiene Service—and involve large expenditure by slaughterhouse operators as well as a generous slug of taxpayers' money. Unfortunately, there has not yet been the opportunity to debate them either in this House or in another place.
Perhaps we should remind ourselves that the main reason for inspecting abattoirs in the first place is to protect the consumer. I believe that I shall be able to show that under the Meat Hygiene Service the consumer will have less rather than more protection. Secondly, any such service should be cost-effective. Again I will show that the MHS is more expensive than the service it replaces run by the local authorities and will be so expensive that it will quite needlessly drive out of business many medium and small operators.
Let me explain why the Meat Hygiene Service will be more expensive. The local authority meat inspection system was estimated to cost between £32 million and £45 million according to whose figures one believes and how those costs were allocated. The Government's figures for the Meat Hygiene Service, as the noble Lord, Lord Carter, pointed out, show that it will cost £54 million in its first year of operation, of which the taxpayer will pick up no less than £20 million. That is a pretty generous slug of taxpayers' money. It means that £9 million is the minimum extra cost over and above the service which the Meat Hygiene Service will replace. That is just for starters. If the new agency is so cost effective, why does it need any subsidy at all? And what happens when the subsidy is removed? The costs will not come down. The extra costs will be passed on to the industry which will be faced with ever higher expenses in the years to come.
There are around 420 slaughterhouses and abattoirs in England of which slightly more than 200 are what may be called medium to small-sized businesses which provide an invaluable service to the consumer, the butcher and the producer. The producer is able to transport his stock over shorter distances for slaughter with reduced stress to the animals; the quality butcher can be sure that the carcasses he buys will be properly cooled and hung rather than quick-chilled; and the consumer benefits by having a wider choice of quality meat. I should add that all those businesses have a respectable number of customers, One owner to whom I spoke yesterday has 4,500 satisfied clients. So we are not talking about a backroom operation.
It is precisely the smaller and medium-sized slaughterhouses which will be the first victims of the increase in charges which the MHS will impose. If my noble friend the Minister wishes, I can provide him with numerous examples of operators who either have closed or are threatened by closure because of the cost of this superfluous layer of expensive bureaucracy. On average the charging system will increase their costs by around 40 per cent. The MHS will be setting the charges. It will effectively be judge, jury and executioner. A 40 per 414 cent. increase cannot be paid for out of operating profit and will needlessly put people out of business. I cannot believe that that is what the Government wish to do.
I must emphasise how strongly people feel about this matter. Perhaps I can illustrate the point by telling the House that nearly 200 slaughterhouse owners have pledged not to pay the MHS charges. That is how strongly they feel. They are businessmen who pay their taxes and their VAT and who are normally law-abiding subjects. They are significant employers in their regions. They have been pushed into deciding that enough is enough. Is it right that those people should be forced to make the choice between obeying the law or going bust? I do not believe it is.
I am aware that the larger slaughterhouses support the introduction of the Meat Hygiene Service. Why? Because it would suit them admirably to see their smaller rivals go out of business, giving them a larger share of the cake. That is no justification for the introduction of the Meat Hygiene Service. Equally, I am aware that both the NFU and the CLA have given heavily qualified approval so far to the introduction of the MHS. However, their continued support is dependent on its cost effectiveness. They are already concerned at the indication of the much higher costs I mentioned. My noble friend may wish to enlarge on that aspect.
I turn to the interests of the consumer and food safety. I query the assumption that the introduction of the MHS will mean greater protection. Who will the MHS be serving? Will it be the consumer or the meat industry? As the MHS will rely for its income solely on the meat industry, it is that industry which will be its customer, and it is he who pays the piper who calls the tune. The tune inevitably will be called by the major meat wholesalers. As smaller slaughterhouses are forced to close down, the Meat Hygiene Service costs will be spread ever more thinly, leading to higher fees and even more closures. The effect of fewer slaughterhouses will be greater throughput of animals in those slaughterhouses which remain in business. In turn, that will lead to greater cross-contamination, which is inevitable as a consequence of greater throughput. No matter how rigorous the inspection, more animals through an abattoir means more cross-infection; that is simple arithmetic.
Equally, it will be more difficult to trace diseased animals through individual slaughterhouses where the larger slaughterhouses are processing thousands of carcasses a week. Most disturbingly, new and lethal pathogens have been discovered. I refer in particular to a strain known as Definition Type 104C, which is increasing and becoming a serious health concern. That cannot be spotted in the abattoir in the carcass, no matter how many vets line up in attendance. It will have to be dealt with on the farm in the same way as TB and brucellosis were successfully controlled.
What does the MHS really bring? It does not bring lower costs, though that was part of its rationale; it does not bring standard charges because abattoirs will still be paying different rates, and it will not bring any increase in consumer protection. I ask the Government to take note of my concerns; to set the MHS and these 415 regulations on one side, and to bring back a scheme which will be more effective in terms of cost and in protecting the consumer.
§ 4.49 p.m.
§ Lord Geraint
My Lords, there is a great deal of anxiety in the meat trade about the Meat Hygiene Service. The majority of organisations in Britain are in favour of the scheme but they are concerned about the cost of administering it. From my understanding of the matter, the agency is not responsible for the licensing of slaughter premises. That duty was earlier transferred from the local authorities to government when the European Union veterinary inspectorate reported low standards of hygiene and structure of many British plants during the regular checks which are made within all member states.
Unfortunately for the meat trade, more than half our abattoirs have been closed in the past 12 years. In 1983 we had more than 1,000 abattoirs in Britain. Today, the number is down to just over 500. I wonder whether they have been closed compulsorily or whether many of the abattoir owners have thrown in the towel. When one compares the regulations in Britain with those in Italy, France and Germany, I wonder whether fair play is operating. I hope that the Minister will be able tell us what percentage of the abattoirs in those countries have been closed over the past 10 years.
The Meat and Livestock Commission has long supported the concept of a centralised meat inspection service and welcomes its launch. The commission states:The benefits to be gained from a national service are numerous: it is easier to ensure that consistent inspection standards are provided across all abattoirs, cutting plants and cold stores; a regular pattern of continuous professional training can be assured; career prospects for authorised meat inspectors can be improved; important additional benefits can be more readily achieved—for example, the feedback to farms of origin information on the state of health of stock revealed by post-mortem inspections; the scope for a streamlined, cost-effective inspection service is more readily achievable".I accept the comments of the Meat and Livestock Commission because I honestly believe that it has given excellent service to the industry over the past few years.
According to a press release, the President of the Farmers' Union of Wales has made a last-gasp appeal to the Government to reconsider the establishment of the meat health service which he said would transfer control of meat inspection from local authorities to the new Meat Hygiene Service. The press release states:The new service would have a total budget of £53.4 million and employ a total of nearly a thousand, 872 meat inspectors and vets and 75 management and clerical staff. In a direct appeal to the government to think again, Mr. Parry has told Mr. Waldegrave that some abattoir operators in Wales anticipated an increase of up to 40 per cent. in operational costs and that the agency's budget was over £8 million more than the current service operated by local authorities".I wonder whether those figures are correct. The press release continues:Mr. Parry says that abattoirs were going out of business at a frightening' rate and that any increase in operational costs would increase the closure rate".416 I shall say very little about Scotland because my noble friend Lord Mackie will say a few words on the Scottish aspects of the scheme. The Scottish Association of Meat Wholesalers says:While continuing to express … total support for the aims of the new Agency providing a cost effective, fair, efficient, affordable, consistent and creditable service to all Meat Plants in Great Britain, there continues to be considerable unease and anger at the manner in which the service is being introduced".My noble friend will take over from there when the time comes.
The Association of District Councils is not in favour of the change either. It states:The Association and its members have always expressed concern about the cost, accountability and role of the MHS. It believes that the service will be more expensive and less accountable than the one hitherto provided by local authorities. More importantly, however, it will be less flexible and less responsive to the needs of small and local businesses which have already experienced some difficulty in coming to terms with regulatory changes in the industry. The MHS will also fragment the existing local authority food hygiene and safety framework with consequences for consumers and business".I have received a letter from Edward Hamer, one of the biggest wholesalers in Wales. At the moment he is the chairman of the Federation of Fresh Meat Wholesalers (Wales). The company operates from Llanidloes, Powys. He is well known for the service he has given to the industry in Wales and for the number of lambs which he exports to Spain, Italy and other countries. He says:In principle we are in favour of the M.H.S. as we were promised a more economic service, a slim low cost structure that was able to service the needs of this industry for inspection and veterinary time far better than 300 local authorities. We were told that the MHS. would be low cost and flat structured. However, what we have seen evolve is a very large, top heavy, overstaffed, expensive organisation formed. Although it has been classed as an executive agency of MAFF, it would appear in all senses to be a quango, although obviously people who are involved are strongly denying this.As far as the costs to industry are concerned, we are seeing colossal rises in cost per hour and manning levels. This being due to enormous amount of paperwork which has been created. We as an industry were promised full consultation before any of the nuts and bolts of this service were put together. However, there has been no consultation whatsoever. They can argue that there was an industry forum, which was held in York. However, the first many of us knew at the sharp end of the industry was the arrival of thousands of forms which have to be completed. In a plant such as the size of mine, to complete all these forms in the full and proper manner will take two extra personnel full time.The Welsh Industry has had reasonable rates for authorised meat inspectors and official veterinary surgeons. These rises that we are seeing now are colossal on what many people have been paying. In fact that on an industry wide basis it is 40% more than we were paying in the last financial year".In the view of the comments of the leaders of the industry in Wales, Scotland and England I believe that the Government should have another look at the scheme in its present form. I am sure that that is the wish of noble Lords on both sides of the House. We do not want to see an industry on which we are so dependent failing.
§ 4.58 p.m.
§ Lord Soulsby of Swaffham Prior
My Lords, it would appear that I may be the only Member of this House to speak in favour of the unified Meat Hygiene Service other than my noble friend the Minister. I speak 417 as someone who has had in his career several years' experience of food hygiene meat inspection in Scotland, where it was a first rate local authority service. Therefore, I am speaking against the prayer to annul the regulations pertaining to the central Meat Hygiene Service.
During the debate on the Deregulation and Contracting Out Bill in October 1994 I spoke of the importance of the need for a unified meat hygiene service under veterinary direction. I am still very strongly of that opinion. It has been long recognised that the welfare of animals awaiting slaughter and at slaughter, and the wholesomeness and soundness of meat and meat products in the food chain, is best achieved by a single seamless system which is represented by the unified meat inspection service that is in force. I say en passant that this seamless single service is much more liable to avoid the food hygiene problems of infection such as those which have been referred to by my noble friend Lord Willoughby de Broke.
It is also recognised that while the meat inspection and hygiene services under some local authorities are beyond reproach, particularly in Scotland, nevertheless there were many others where that was not the case. It has been long recognised that England and Wales in particular have lagged behind other countries of the world in meat hygiene. That has meant that until 1993 we have had two hygiene standards; one for export purposes meeting international standards including those of the European Union, and one for home consumption. Surely it is an anomalous situation that our own citizens should tolerate a perceived or otherwise lower standard of meat hygiene than that of our customers overseas.
I am informed that prior to 1993 there were only 78 meat hygiene plants that were licensed for export. That meant there were about 400 or more licensed for domestic consumption only. Surely that is not an agreeable situation. At present there are about 515 licensed abattoirs, 104 of which meet European standards which undertake 67 per cent. of the slaughtering in this country. But there are about 400 plants still not meeting those standards. They are under temporary derogation to allow upgrading to meet the needs of international standards by 1995. I am informed by the Meat and Livestock Commission that it estimates that half of these have no intention whatever of upgrading their premises to a level which must be consistent with good hygiene and good health for our nation.
The regulations pertaining to animal welfare and slaughter and the inspection of slaughtered animals are well known and are codified in the present regulations which are available. It is also well known that these were under the direction of about 300 local authorities looking after about 500 slaughterhouses. That meant enforcement of the rules in these slaughterhouses and licensed meat plants suffered from a lack of consistency and uniformity. These regulations varied enormously. Further, this inconsistency and uneven standards were criticised by bodies which have been mentioned such as the British Meat Manufacturers Association, the 418 Federation of Fresh Meat Wholesalers, the International Meat Trade Association Inc., the Scottish Association of Meat Wholesalers, the British Poultry Meat Federation, the NFU, the British Veterinary Association, the Meat and Livestock Commission, and others. All urge the Government to set up a single enforcement body.
I quite accept that there have been teething troubles with the introduction of the new Meat Hygiene Service. Some of these have been detailed by the noble Lord, Lord Carter, and other noble Lords. I suspect that there will be more teething problems to come. There are certainly some local authorities and slaughterhouse owners, meat inspectors and veterinary surgeons, who feel aggrieved at how some of these regulations have been put in place. As might be expected, with an industry which slaughters and inspects about 27 million cattle, pigs and sheep and 580 million poultry per year, it would be unrealistic to expect everything to go so smoothly when we are moving to a new system. Nevertheless, it is my understanding that the majority of those concerned with slaughtering meat hygiene across the spectrum welcome the new Meat Hygiene Service. It is my firm belief that this is the most logical way forward to ensure consistency. for a sound and wholesome product in the abattoirs and cutting plants which will eventually end up in the households of the people of this country.
In addition, but also ancillary to the main point, I believe that it will improve the career prospects of those in the field of meat hygiene. It will allow for consistency of training across the country and provide a valuable surveillance system for livestock health in Great Britain. I believe that all of those are important ancillary issues ensuing from a sound and wholesome meat hygiene service.
§ 5.7 p.m.
§ Lord Stoddart of Swindon
My Lords, the noble Lord, Lord Soulsby of Swaffham Prior, has just made a very serious allegation. He said that our meat inspection service has been lagging behind other countries in meat hygiene. What does that mean? Does it mean that the people of this country, over a period of 70 years, have been more prone to food poisoning than people of other countries? The Minister should give the House an answer to that. I hope that he will also be able to assure us that the number of food poisoning cases, as a result of this particular piece of legislation, will reduce. I hope that he will be able to give some figures to support the arguments that this service should be taken away from the local authorities and given to a centralised authority. It is also a condemnation of the local authorities who have administered this service over the past 70 years to say that we have been lagging behind other countries in the meat hygiene service that is given to consumers.
I congratulate my noble friend Lord Carter on putting down his prayer and also the noble Lord, Lord Willoughby de Broke, in tabling his amendment. Those two matters enable us to have a reasonable and good debate today and that is precisely what we are having. As my noble friend Lord Carter said, when this legislation goes through today—indeed, it is already in operation—the Government and certain sections of the meat trade will 419 have attained their objective of destroying the local authority meat inspection service, which I believe has successfully protected the consumer for over 70 years. They will replace it with a secretive, centralised bureaucracy which will be not only more expensive, as we have heard, and destructive of small slaughterhouses, but it will also he dangerous for the consumers in that it will he more liable to corruption and may lead to the development of a cosy relationship between the big boys in the meat industry and the new nationalised Meat Hygiene Service. I say "nationalised" because that is precisely what this transfer of power means. I understood that the Conservative Party did not believe in nationalisation, but that is precisely what is happening here. The local authority meat inspection service is being nationalised and, I believe, for no good reason.
This is yet another centralising act of a Government who pay lip service to local democracy, but by their actions do everything to destroy it—little wonder that there are few Conservatives active at local level. A misnamed "conservative" Government have taken away the opportunities hitherto enjoyed by decent local Conservatives to serve the community in which they live. This is just another example of the centralising Stalinist tendency of this Government.
The Association of District Councils, of which I have the honour to be a vice-president, has pointed out that the consultants appointed in 1991 to assist MAFF in its review of options for improving the meat hygiene enforcement system in the light of single market requirements found no conclusive evidence to change the UK's meat inspection system. That confirmed what the Government's Preston Review concluded in 1985— that meat inspection should continue to be provided by local authorities. Indeed, the Preston Committee rejected the case for a centralised meat inspection agency on the grounds of the costs of the central bureaucracy. How right it was—£5.2 million will be allocated in each of the financial years 1994–95 and 1996–97 in addition to the £600,000 that has been spent by MAFF on the project team to oversee the establishment of the MHS.
Furthermore, I understand—we have heard about this today —that the Meat Hygiene Service will cost public funds some £15.4 million, which is additional to the moneys which will be recovered in fees and charges. The recent answer by Mrs. Angela Browning, the Parliamentary Secretary at MAFF, shows that the estimated cost of the MHS in its first year of operation will he £53.4 million as compared with £45 million for the local authority meat inspection service. That additional cost of nearly £9 million a year will mean that, on average, each slaughterhouse will pay £20,000 per annum more for meat inspection, while some will have to pay £80,000 more than they paid to the local authorities.
The Government claim that because the Meat Hygiene Service can operate across local authority boundaries, it can use manpower more effectively. That claim can hardly stand up to examination. In the first place, local authorities can, if necessary, employ agency staff who can also operate across local authority boundaries. Secondly, local authorities can redeploy meat inspectors to other duties when not needed for 420 meat inspection. The Meat Hygiene Service will not be able to do that. Thirdly, for unplanned staff absences and surges in workload, local authorities can call on 6,000 environmental health officers, all of whom are qualified meat inspectors. That is not available to the MHS. Furthermore, the suggestion that the Meat Hygiene Service will unite enforcement functions is, to say the least, misleading.
I refer now to a most interesting brief that has been given to me by the Association of District Councils. It states:The Government took a decision, without consultation, to use its powers to issue slaughterhouse licences. It did so without revoking the responsibility of local authorities to issue the same licences, thus creating an unnecessary, burdensome and confusing licensing regime. The State Veterinary Service (SVS) will continue to issue slaughterhouse licences despite the creation of the MHS.It is difficult to see how enforcement is united when the SVS issues a licence, the MHS is responsible for day to day hygiene and meat inspection and local authorities are responsible for all remaining food hygiene controls in the remainder of the meat sector.In essence, therefore, one enforcement agency has been replaced by three. In so doing, the MHS has fragmented the existing food safety framework, created confusion and inconsistency and given industry yet another enforcement agency with which to deal.When the MHS's operation is considered in detail, the arrangement makes even less sense. The MHS will have no remit in premises other than licensed slaughterhouses. In respect of illegal slaughter, animal welfare issues and the licensing of slaughtermen, the local authority will have to continue to act as watch-dog. In some premises, the division between the responsibilities of the MHS, the SVS and local authorities will be so blurred that each will have a role in respect of different aspects of meat hygiene enforcement.It has even been suggested recently that, when the MHS is called upon to seize unfit meal, it may have to rely on assistance from the local authority due to various legal technicalities which prevent it from taking such action itself'.So much for the new service which will co-ordinate everything and be so much better for everyone.
I repeat that we see the formation of a centralised, unaccountable, bureaucratic agency which has been set up to replace a democratic service of proved effectiveness. Let us not forget that the local authorities have been carrying out such work for 70 years, without any complaint or legislation except perhaps some government interference over charges. The system has worked effectively and efficiently. Do the Government never learn? Have they already forgotten the lessons of the Child Support Agency, which replaced the courts and which has now collapsed in ignominy and chaos from its original form?
As we have heard, some slaughterhouses are already threatening to withhold the extra payments that will he demanded. What are the Government going to do if they do that? Will they close them down? Will they send the owners to gaol? What will they do? I sincerely hope that the House will pass at least one of the Motions which are now before us so that the Government are in no doubt about the anger that is felt in many parts of the trade, in local authorities and, I hope, also in your Lordships' House.
§ 5.18 p.m.
§ Lord Hamilton of Dalzell
My Lords, I declare an interest in this debate. As my noble friend Lord 421 Willoughby de Broke and other noble Lords have so clearly explained, the Meat Hygiene Service will impose increased costs on the production of meat. I am both a grower and consumer of meat. As a grower, I sec the potential to close slaughterhouses as a direct blow against those who have heeded the Government's advice to go into direct marketing in order to increase their margins. I also see it strengthening the hand of the supermarkets as monopoly suppliers.
As a consumer, I am a supporter of the smaller suppliers who, often in conjunction with the ability to slaughter in-house, can offer something better than can be bought from a supermarket. Those are the people who will find the increased cost of the new arrangements hardest to bear. I have no doubt that many noble Lords who are particular about the meat they eat will regret their demise as much as I do.
It always seems to fall to those who have the reputation of being sceptical about the European ideal to raise these issues for your Lordships to consider, when they should be the concern of everyone. I was told at the time of the Maastricht debate that I was wrong to oppose the treaty and that the right way to go about things was to raise troublesome issues when they occurred; matters could then be sorted out by debate in your Lordships' House; and representations made to Brussels.
Your Lordships may recollect that 18 months ago I prayed against arrangements for sheep and cattle quotas. Your Lordships agreed that they were unfair to owners of land and agreed to a Motion which asked the Government to do something about them. The House is still awaiting the judgment of the European Court of Justice to find out whether anything can be done to honour its opinion.
That experience has confirmed my view that we have handed over to Brussels more power than is prudent. How are we supposed to carry out our role when the tradition of the House is to accept statutory instruments by which regulations are imposed upon us without opposition? I find myself also in the rather embarrassing position of agreeing with the lecture we had on Tory principles from the noble Lord, Lord Stoddart. I sit on this side of the House not entirely by custom but by conviction.
I believe in free enterprise and small business, to which over-regulation is anathema. Do we not claim to be the party of deregulation? We see an ever-increasing flow of regulations not just in agriculture and its associated industries, which is now so regulated that it is almost a nationalised industry, but in many other aspects of our lives not germane to the debate. That leads to the closing of businesses and the loss of jobs. I dread to think what that is doing to the party in the country. It is a great disappointment to me that I have to criticise my party for betraying the tenets of its own philosophy.
§ 5.24 p.m.
§ The Earl of Onslow
My Lords, I have given notice to my noble friend that I would speak in this debate. I 422 hope that someone will divide the House on the issue, but I believe that my noble friend Lord Willoughby de Broke has been—I am not sure that the word "conned" is right—persuaded by the Chief Whip to say that he would not.
These regulations are a disgrace. I do not go as far as the noble Lord, Lord Stoddart, and compare my right honourable friend the First Lord of the Treasury to a failed Georgian priest novitiate in the form of Mr. Stalin. I find the idea of him sitting in a monastery outside Tiflis learning about the dual nature of Christ as something slightly odd. But, he that as it may, I come to the debate because it is the sort of thing in which no one is really interested.
I was talking to the chief executive of our local borough council, who by most people's yardstick is regarded as an extremely good chief executive. I believe that Guildford Borough Council is held out as an extremely good local authority, whichever political party is in charge of it. He said, "Yes, of course we have been running our slaughterhouse very well. We do not want it taken away because we think we are doing very well for the public. But it is not something I shall go to the barricades over. The Government will do something more stupid later about which we shall have to get even more cross". Rules about slaughterhouses are not something about which people, except those directly involved, will become very cross.
Again, I spoke to the head of the borough council's meat hygiene service today. As a direct result of the new regulation, the inspection bill for the Guildford slaughterhouse, which is owned by the local authority and let out to a private company, goes from £50,000 to £75,000 a year, without the prospect of one fewer tummy bug. How can my noble friends on the Front Bench produce regulations which are as stupid as this? It is outrageous. I have already had reason to write to my noble friend about some of the civil servants in his office who I believe have been misinforming him about the rules and regulations. He knows about that. I shall not go into further detail. I shall merely hope and listen with bated breath for a reply to the letter which I wrote to him.
The noble Lord, Lord Soulsby, talked about the variation in the quality of slaughterhouses. There is a book which lays down regulations as to how the inspection is to be carried out. Am I supposed to believe that the regulations have been disobeyed by some local authorities and obeyed by others? If that is the case, the Government have been deeply lacking, as has the state veterinary authority, in ensuring that the regulations are properly carried out. I should like to know whether that is true.
I should like also to know whether the inconsistency of which the Government complain was caused because they insisted on an hourly rate per inspection rather than a headage rate. Under the old headage system, no one complained of inconsistency.
We now have a new agency set up. Mr. Johnston-McNeil will be paid £78,000 a year to run it, which is not a great deal less than the Prime Minister receives. His head of operation, who, it was said, would be paid £50,000 a year, was forced to resign after 423 expenses irregularities concerned with his employment with the Australian Government. It has already been established that it will cost a great deal more. Will there be one fewer case of salmonella, one fewer tummy hug or one animal suffering less as a result of this regulation? If the answer to all of those questions—as I suspect it is—is no, what on earth is the point of increasing the bill for meat hygiene inspections by 50 per cent.? That is government gone mad. I hope someone will call for a Division. I shall vote against the Government with relish.
§ 5.28 p.m.
§ Lord Mackie of Benshie
My Lords, this has been a remarkable debate. I begin by apologising to the Minister for not having my name down to speak. It was due entirely to my incompetence, something which he will understand because he has had much to do with incompetence by his department. The strictures the Minister has heard during the debate must have shaken him to the core. I feel rather sorry for him.
§ Lord Mackie of Benshie
My Lords, indeed. The Minister is defending a situation caused by incompetence and a lack of appreciation of the real situation.
I was delighted by the speech of the noble Lord, Lord Stoddart of Swindon. He put forward a massive case for the local authorities. He also showed a degree of self-restraint which is unusual in him. I did not hear him once mention the European Union, which shows the depth of his feeling for the case he put forward. I was pleased when the noble Lord, Lord Soulsby, the only real expert on veterinary affairs we have in the House, said that local authority procedure and practice in Scotland was most satisfactory. We have found it to be so. The Government should have looked, as the noble Earl, Lord Onslow, said, at the simple matter of standardising local authority procedures and ensuring that they were carried out. That would have been very much simpler than setting up the new MHS. I am not sure what MHS stands for but we all know that it is a centralised body which is approved of in principle by a large number of people. However, that approval is heavily qualified by the practice once they find it being put into operation.
The Minister must listen to the detailed allegations made by my noble friend and others about the enormous increase in costs to many bodies throughout the country. The local authorities have a vested interest in ensuring that employment continues in their areas. There are far too few useful slaughterhouses and as regards many in Scotland the travelling distance is expensive and is bad for sick animals which must be slaughtered. The Minister must listen to all that has been said and try to do something about the matter. I suppose that it is too late to stop the process but the Minister could do a great deal to cut the bureaucratic costs.
It is difficult to say anything new in the debate because almost everything has been said. The administrator, whose references were found to be all at 424 sea and so forth, has now resigned. That is a measure of the incompetence shown in setting up the body. The fact is that again the Government have made a complete mess. We can advise only that they listen to what has been said and instead of producing the standard brief and reply stating that all is well, that the body is approved and that this is only a small teething problem, they admit that that is not so and that the concept has been wrongly applied.
I do not wish to sit down without saying something nice about the regulations. I ploughed through the 50 pages of each regulation. There are marvellous descriptions of the evisceration of rabbits and so forth but there are some good points which arc the exemptions. The exemption relating to premises where fresh meat is cut up, stored or rewrapped for sale from those premises to the final consumer is a piece of common sense which I am glad to see.
There are in my area a number of people who raise turkeys and sell them directly to their customers at Christmas time. Their premises are inspected by some sensible vets and health inspectors. One such person visited a couple I know who raise many turkeys. He looked round the premises and tut-tutted. He was most polite about the matter but said that he did not think a great deal of the process and the premises. However, when he left he ordered a Christmas turkey for himself and his brother-in-law. That is an attitude of which the Government would do well to take note in dealing with local authorities and sensible people in Scotland.
The other good point about the regulations is that the Minister accepts responsibility. Therefore, we cannot ask him questions and be told, as I have been told so often, that the noble Lord should write to the body concerned because it has nothing to do with the Minister. The Minister has accepted responsibility for the quango and the great deal of trouble that will cause him.
§ 5.30 p.m.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe)
My Lords, we have had a wide-ranging and at times somewhat impassioned discussion. I am grateful to the noble Lord, Lord Carter, for giving us the opportunity to discuss these regulations and the new Meat Hygiene Service. Your Lordships considered the MHS on 13th October last year, again on the initiative of the noble Lord, Lord Carter. On that occasion, my noble friend Lord Ferrers outlined the Government's intention that the MHS would operate to strict standards and would be a better use of resources than the previous local authority system of enforcement. I am glad to be able to update your Lordships on the progress which has been made since last October and I hope to set the record straight on some of the misleading claims and allegations which have been made about the MHS, some of which have been repeated today.
First, perhaps I may say a little about the two regulations which are the subject of the Motion tabled by the noble Lord, Lord Carter. Apart from the transfer of responsibility from local authorities to the MHS, both regulations are very similar to their predecessors. The 425 fresh meat regulations do, however, make some changes designed to reduce the burden on industry. These changes result from a review carried out in accordance with the deregulation initiative. I know that the House will welcome action aimed at the removal of unnecessary burdens.
§ The Earl of Onslow
My Lords, I apologise for interrupting my noble friend. How can he possibly say that increasing the charge from £50,000 per year to £75,000 per year is reducing a burden on industry? If that is a reduction in the burden, I am in the Majlis in Tehran.
My Lords, my noble friend has already had the opportunity of speaking in the gap. I am sure that he will appreciate that the rules of the House are such that his time for speaking has passed. I shall address his anxieties in the remarks that follow. I have barely begun my speech and I am sure that my noble friend will allow me to continue as I have a great deal to say.
There are those who argue that controls over fresh meat are over-prescriptive and unduly onerous compared to other sectors of the food industry. That premise underlies the position adopted by my noble friend Lord Willoughby de Broke. The Government fully recognise that there is a need to review the inspection arrangements to ensure that they are correctly focused on present-day problems. We have commissioned research work in this area and are working closely with our European partners, the European Commission and other interested third countries. But we are not prepared—even if it were legally possible, which it is not—to sweep away the long-standing internationally accepted inspection requirements until the necessary groundwork has been done to replace them with alternative systems which provide equivalent protection for the consumer.
A number of organisms—such as E cob 0157:H7, some salmonella serotypes and listeria monocytogenes—have been implicated in food poisoning incidents associated with the consumption of meat and meat products. Some commentators argue that meat is a low-risk product because it is normally cooked before consumption and that therefore there is no need to be concerned about contamination with organisms of this kind. The Government do not accept this argument for one second. While it is true that thorough cooking will destroy most, if not all, pathogenic micro-organisms, the hazards associated with cross-contamination in the distribution chain or in the kitchen remain a matter of concern. While no one expects an abattoir to resemble an operating theatre, sensible steps must be taken at all stages of production to limit the risk of contamination. The most appropriate point to address the problem of contamination with pathogenic organisms is the slaughterhall. That is what these regulations are designed to do.
Many abattoirs in this country are well managed and produce meat which is of a good hygienic standard. Unfortunately, and I will not go into detail, this is not true of all of them. The noble Lord, Lord Stoddart, 426 praised the role of local authorities. The variability of the standards applied by the 300 or so local authorities previously responsible for this work has led to inconsistencies which the MHS will he required to sort out so that consumers of British meat in this country and in our growing export markets can he fully confident about their purchases. I was grateful to my noble friend Lord Soulsby for the remarks which he made in that connection.
The export market is important. Our meat exports last year were worth almost £1 billion and that has a very real impact on our livestock farmers. Internationally, trading countries rely on national authorities in the exporting country to provide assurances about the health status of their production. It is no exaggeration to say that we in the UK would not accept imports of meat from a country whose enforcement arrangements do not provide proper accountability from the enforcement officer in the plant to the national veterinary authorities. In order to provide that level of accountability while enforcement remained with local authorities, we had to make special arrangements which were cumbersome and expensive. Those arrangements will no longer he necessary with the MHS.
The MHS will build on the work done by MAFF's State Veterinary Service over the past year or two to develop a risk-based approach to enforcement, focusing on the real hygiene risks. We have introduced, in consultation with the industry, a hygiene assessment system which is used to monitor standards of operation and to identify, in discussion with the operator, the areas where improvements are needed. Last month we published the first results from this system in red meat slaughterhouses. One of the MHS's key performance targets for 1995–96 relates to achieving improvements in premises where that system has identified shortcomings, and we will expect the MHS to increase its enforcement effort at plants which score poorly. Conversely, of course, where plants are managed to a high standard, the MHS should be able to reduce its input. This flexible, risk-based approach should enable the MHS, working in partnership with the industry, to bring about a real improvement where that is needed, and to minimise the burden of enforcement in plants where the management maintains high standards.
There are a good many misconceptions about the MHS. We have heard some of them repeated this afternoon. The noble Lord, Lord Stoddart, called it a secretive bureaucracy. He is totally wrong. Perhaps I may begin by explaining how the MHS will operate. It will be answerable to agriculture Ministers who will be advised by an ownership board which will include independent members, one of whom is Mr. John Barratt. Mr. Barratt has wide experience of the meat industry and I am sure he will be able to provide a useful view on the management and operation of the MHS. The chief executive will consult closely with all sectors of the meat industry through the Industry Forum, which includes all the representative organisations including the NFU, the FUW and the QMLA. The MHS is sending all premises operators a customer service statement, together with a document which explains its appeals and 427 complaints procedures. I believe that those procedures are valuable. But Ministers will be keeping a close eye on this aspect of its operation.
The MHS plant staff will he operating in accordance with its operations manual, which will be available to plant operators. That is not a document which the MHS has drafted. The agriculture departments, as custodians of the legislation and the policy in relation to the work which the MHS carries out, will remain responsible for its contents. MAFF has undertaken to review the manual in consultation with the industry and professional organisations in the autumn to ensure that it fulfils its objective of achieving high and uniform standards of enforcement, without imposing unnecessary burdens.
§ Lord Stoddart of Swindon
My Lords, I am grateful to the noble Earl for giving way. I have listened very carefully to what he said. But will he tell me what will happen if Members of this House or another place wish to raise questions about the new agency? Will Ministers reply directly to Oral and Written Questions, or shall we be fobbed off by a reply from the chief executive of the service?
My Lords, the annual report of the MHS will be published and laid before both Houses of Parliament. That will enable a full debate to take place in either House as necessary.
§ Lord Stoddart of Swindon
My Lords, what about Questions? Will Ministers answer them or shall we be referred to the chief executive of the MHS?
My Lords, the head of the executive agency would normally answer parliamentary Questions on day-to-day operational matters. Ministers will deal with matters of policy, as is reflected in current procedures.
The MHS has only 29 people at headquarters to manage an organisation of around 1,000 people. I believe the House will recognise that this can hardly be described as excessive or, indeed, a bureaucracy. Nevertheless, the management structure will be kept under close review. The MHS will be working to strict financial and performance targets aimed at producing efficiencies not only in its first year of operation but on an ongoing basis. My right honourable friend the Minister of Agriculture, Fisheries and Food published the targets for 1995–96 last month. Parliament and the industry will be able to monitor how the MHS performs against those targets.
Against that background, it is extremely difficult to understand the allegations which have been made about lack of accountability. The MHS's arrangements will be much more transparent and accountable than was possible previously. Parliament, consumers and the meat industry will be much better able to scrutinise how the meat inspection function is being performed.
There is, naturally and rightly, great interest in and concern about the cost of the MHS. Perhaps I may put straight one fundamental point. The amount which the MHS expects to recover from the meat industry in 1995–96 is around £40 million—not £54 million as some 428 noble Lords have indicated. That represents a saving of around 10 per cent. of the estimated total cost of the local authority system. That is a significant saving.
We have heard a good deal about abattoirs which expect to be charged more by the MHS than by their local authority. I can assure your Lordships that there are also abattoirs which will he charged less hut, not surprisingly, they are not lobbying their MPs or their trade organisations about that. I shall have more to say about that in a few moments.
The MHS is still in the process of consulting plant operators about its proposed charges. Therefore, I cannot provide definitive information today on the number of winners and losers. However, I assure your Lordships that the Government are listening very closely to the anxieties of the industry. My right honourable friend the Minister announced on 29th March that he was minded to make some transitional assistance available in the first year while the MHS achieves the efficiency savings which arc possible now that enforcement is organised on a national basis. We are still consulting the industry as to exactly how that assistance should be payable; but I can confirm that it will be of real help to smaller slaughterhouses in particular. I hope that that will be of some comfort to my noble friend Lord Willoughby de Broke, who raised anxieties in relation to that. The National Farmers Union described my right honourable friend's decision as,A very welcome response to our concerns".I turn specifically to the anxieties raised by my noble friend Lord Willoughby de Broke. I am sure that the House will sympathise with my noble friend's objective to minimise the costs of the MHS to the meat industry and to public funds. However, I remind your Lordships that both the meat inspection procedures themselves and the arrangements for charging for them are laid down in very detailed European legislation. It is not possible for us unilaterally to amend the meat inspection arrangements, although we are working with our European partners in the Scientific Veterinary Committee to update them. I assure the House that, as part of the EC review, we shall look to keep to the minimum the costs needed to provide proper protection of public health.
However, I must express some small surprise at my noble friend's view that it would be possible to contain the total cost of the regulations at £25 million per year. The cost of the current local authority arrangements is estimated at £45 million as against the MHS estimated operational cost of around £40 million. In 1992, before the EC rules were extended to domestic abattoirs, meat inspection was estimated to cost the industry just under £32 million.
It is simply not realistic to seek cost reductions of the order suggested by my noble friend. The MHS, in its first year, is already projecting savings, as I said, of about 10 per cent. of the total cost to industry and the public purse. That is a good start. My right honourable friends and I will be looking to see further savings as the MHS takes full advantage of operating on a national basis. The efficiency targets published last month are challenging and will require the MHS to squeeze costs down as far as possible. However, I am sure that the 429 House would not expect the Government to put the objective of cutting costs above the objective of protecting the consumer or of complying with our legal obligations. I see that my noble friend wishes to intervene. I give way.
§ Lord Willoughby de Broke
My Lords, I am much obliged. My noble friend the Minister mentioned the figure of £40 million as the total cost of the MHS. However, can my noble friend say whether that is net of the subsidy, which we have been informed will cost about £50 million over the first year, together with start up costs, or whether that is a gross figure?
My Lords, I was about to deal with the whole question of costs, where I believe there has been a degree of confusion in today's debate. I shall attempt to elucidate the details as far as I can.
My noble friend Lord Willoughby de Broke indicated that, to his knowledge, some slaughterhouses have closed because of the implementation of EC rules. That is not, on the whole, the case. Such recent closures as there have been reflect the trend for rationalisation which has existed within the British slaughtering industry for over 20 years as a result of over capacity. MLC figures indicate that the number of slaughterhouses was reduced from 1,231 in 1980 to 647 in 1992. That shows that the bulk of closures occurred before the implementation of the directive.
The noble Lord, Lord Carter, cited some instances of probable increases in charges to plants. It is clear that some plants will benefit considerably from the establishment of a national meat inspection service. Others will see some increase because of the significant differences in current local authority charges. It is also clear that some local authorities have been subsidising, either directly or indirectly, the plants in their areas. During the first six months of its operations the MHS will be targeting in particular those plants where there is the greatest concern about manning levels. We and the MHS are committed to finding the right levels within the overall constraints of the legislative requirements. I have many examples of prospective overall savings on veterinary and meat inspector costs at red meat slaughter houses. I should be glad to supply those to the noble Lord if he so wishes.
It is not possible at this stage to be definitive about how many plants would benefit from the transitional rebate that I mentioned. Much depends on the through-put of the plants. But, based on a sample analysis of over 50 plants and their estimated through-put, we believe that 75 per cent. of that sample is likely to benefit. As I said, it should be particularly helpful to small or more remote premises.
The noble Lord, Lord Carter, mentioned a particular plant in Manchester which might be subject to an increased charge. I am not sure exactly which abattoir the noble Lord has in mind, but I am aware of an abattoir in the area which will be making substantial savings with the MHS compared with the local authority system.
430 My noble friend Lord Onslow asked why charging was not based on a headage rate. The idea was discussed, but it was found not to be acceptable to the industry. The charging policy of the MHS has been thoroughly discussed in the Industry Forum.
The noble Lord, Lord Stoddart, said that the average increase to slaughterhouses would be in the region of £20,000. That is simply not the case. The noble Lord has no basis for making that remark. However, if indeed he has, I shall be glad to know about it. The noble Lord also said that some slaughterhouses were having to pay £80,000 more than they paid local authorities. Again, I do not believe that the noble Lord has any basis for saying that; indeed, the MHS is still consulting about its proposed charges. We would want the chief executive to look very closely at any plant facing an increase of as much as £80,000. As I said, some plants will pay substantially less.
The noble Lord, Lord Stoddart, also said that the MHS staffing arrangements were less flexible than those in local authorities. In practice, most local authorities did not co-operate in using staff across local authority boundaries. However, there is no reason why the MHS should not seek assistance from local authorities as well as agencies to cover manpower gaps. There may be advantages to both parties in so doing.
The noble Lord also said that local authorities can call upon environmental health officers to cover gaps in service and that the MHS could not do so. That is not strictly true. The MHS can employ veterinary surgeons under contract, who are required to provide cover for sickness. In addition, the MHS has available to it a number of casual meat inspectors to cover for holidays, sick leave and so on.
The noble Lord, Lord Stoddart, referred to an extra cost of £9 million when compared with the cost under the local authority system. That is a fallacy. The MHS will be cheaper than local authorities. In the financial year 1995–96, there will be one-off, non-recurring costs. But many of those costs will help the industry; for example, by identifying overmanning, removing inconsistencies and buying out the terms and conditions inherited from local authorities.
The MHS is trying to work with plant operators to give them the best value within existing constraints. However, that cannot be only one-way traffic. Plant operators must look critically at their methods of operation and business to see whether they can make changes which would enable the MHS to provide a more cost-effective service. For example, some operators have already changed their working patterns of their own volition, which then enables the MHS to make the best use of its staffing resources in that area.
The noble Lord, Lord Geraint, expressed the view that the MHS is overstaffed. I do not believe that to be true. The MHS was set up as a very lean organisation. There are only 29 staff in the HQ at York and, at operational level, any overmanning will quickly be removed—for example, by visits from hygiene advice teams.
The noble Lord, Lord Carter, asked how many OVSs would be operating in the service. My understanding is that there would be 168 full-time equivalents. The noble Lord also said that OVS costs were increasing by 50 per 431 cent. In fact, the ADC survey carried out in mid-1994 showed average costs of £35 an hour and that the most frequently used charge was in the range of £40 to £44.
There has been much confusion in the debate about costs generally. The noble Lord, Lord Geraint, quoted the figures of the Farmers' Union of Wales as regards the costs of the MHS. Those figures are not correct. Mr. Parry, its president, has confused the total cost of £54 million in the current year with the chargeable cost of £40 million. The noble Lord, Lord Carter, said that the MHS would represent a cost to the taxpayer of £20 million. As I said, the cost for 1995–96 will be around £15 million and the cost to the taxpayer after that time will be very much smaller.
My noble friend Lord Willoughby de Broke asked what would happen when the subsidy was removed. Ministers have made clear that the MHS will not be expected to increase its charges next year to compensate for the withdrawal of subsidy. The noble Lord, Lord Carter, asked about the setting up of the MHS. He wanted to know how much of the Government's thinking was due to EC pressure and how much to MAFF ambition. The 1991 review was carried out against a background of the new single market rules. The Government decided that a dedicated agency was the best way of complying with EC obligations. I have already referred to the very important trade considerations which underlie our thinking.
I believe the noble Lord, Lord Stoddart, referred to the Preston Report of March 1985, which recommended that the meat inspection service should continue to be provided by local authorities. All I would say to him is that things have moved on in the past 10 years. The need for consistency of enforcement and charging is now more important. The industry has pressed for this. There is a single market within the Community and our third country trading partners need to be assured that the production of our meat is under proper and effective control.
Yes, my Lords, there is. Under the local authority system, as I have already indicated, the standards of enforcement were extremely variable, to put it at its mildest.
The noble Lord, Lord Carter, asked about the funding of meat inspection services in other member states. All member states are required to charge for meat inspection in accordance with Community rules. They are required to charge at least the minimum charge laid down in Directive 93/118 EEC. The directive also lays down a standard charge below which subsidisation is illegal. In negotiations on the directive in 1993, several member states—Germany, the Netherlands and Denmark—were anxious to have provision to recover full costs and the directive was amended to permit full recovery of administrative costs. Previously there was a flat rate administrative charge which did not necessarily reflect the full cost.
§ Lord Carter
My Lords, the question I asked was, who pays? I understand there are regulations on the 432 level of costs; but as I understand it, in France and Ireland for example, although these charges meet the standard, they are met by the taxpayer not by the farms or the abattoirs.
My Lords, the trouble is that there is no single document which describes the arrangements in other member states. Of course we have clear ideas about the overall structures, if not always the day-to-day arrangements. Our perceptions are borne out to a large extent by two Meat and Livestock Commission reports last year. The directive firmly requires meat inspection to be under the control of veterinarians who may be assisted by what are deemed auxiliaries, or meat inspectors as we know them. All member states involve vets fully in the meat inspection process. The majority of them also use meat inspectors to a greater or less degree.
My noble friend Lord Willoughby suggested that greater through-put in slaughterhouses would mean greater contamination. I would say to him that greater through-put does not mean greater contamination. The whole point of veterinary inspection is to make sure that the animals are in a fit condition to be slaughtered and that there is proper control of hygiene and, indeed, welfare. It is the hygiene control which prevents faecal contamination of carcasses; that is to say, the spread of pathogens.
The noble Lord. Lord Geraint, was concerned about consultation with the industry about the operations manual. The MHS has undertaken to review the operations manual with the industry organisations in the autumn. The noble Lord, Lord Mackie, said that the Government should have looked at standardising local authority procedures. This was looked at as part of the 1992 review, which preceded the decision to set up the Meat Hygiene Service. But, as he will know, local authorities are autonomous. The Government cannot direct them to standardise procedures and experience shows that many local authorities have disregarded the SVS's advice in the past. When all is said and done, there is little that we in the Government can do about that short of setting up a system, as we have done.
It has been suggested that the Government's decision to set up the MHS was to satisfy the ambitions of a few self-seeking officials in the Ministry. I have had the privilege of being a Minister in MAFF for three years now and it is absolutely clear to me that that is not the case. There were a number of important reasons behind the decision, which I shall summarise. These were to meet the long-standing requests of a majority of representative organisations in the meat industry; to improve the service offered to consumers, retailers and the meat trade generally; to maximise efficiency and to minimise costs; to improve accountability to Parliament, to the public and to the industry which pays the charges; and to satisfy the requirements of our trading partners and safeguard our meat exports worth almost £1 billion in 1994. Those are ambitious objectives. It is not possible to judge the success of the MHS today when it has only been in operation for 18 days. However, I draw your Lordships' attention to the fact that despite their concern about charges all but one of the industry's representative organisations continue to support the concept of a single national Meat Hygiene Service.
433 I urge your Lordships to take full account of the views of the industry as a whole, not just of the individuals who attracted the most publicity. I hope that in the light of the explanation I have given the noble Lord, Lord Carter, and my noble friend will feel sufficiently reassured about the Meat Hygiene Service to withdraw their respective Motions. I, of course, stand ready to follow up with them and with other noble Lords any queries raised in this debate which remain unanswered.
§ 6.6 p.m.
§ Lord Carter
My Lords, I am extremely grateful to all noble Lords who have spoken in the debate. When I heard from all around the House the description of this costly, Stalinist, centralised, bureaucratic organisation, I began to think that perhaps I should have put down a litany instead of a Prayer. I remind the Minister that all the organisations he referred to were in principle—as I said in my opening remarks—in favour of the MHS. Every one of them, without exception, has referred to the argument about excessive costs.
I shall be extremely brief in winding up. I found the Minister's comments about costs rather airy-fairy as regards winners and losers. I remind him that it has never been statistically proved that the swings equal the roundabouts. We shall have to watch this matter carefully. Some of the cost increases to which I, the noble Earl, Lord Onslow, and others have referred have serious implications for small businesses. Virtually every speaker referred to the matter of costs. The noble Earl can be sure that we shall be giving this matter serious consideration as the organisation develops. As regards a seamless robe of efficiency, the fact is there are still three agencies involved: the State Veterinary Service, the Meat Hygiene Service and the local authorities. The upgrading of abattoirs is required by the European Union anyway. That has nothing to do with the MHS and the point is not relevant in that respect.
The noble Lord, Lord Soulsby, referred to teething troubles. When one considers the 40 per cent. increase in costs that some slaughterhouses are having to bear, I would only say that we are talking about some quango and some teeth! Of course the large slaughterhouses support the measure because they can see the smaller ones going out of business. We also understand why the veterinary profession supports the idea.
I am aware of the conventions of the House as regards statutory instruments. I put down the Prayer to make sure that we had a good debate. I believe we have had a good debate. I believe the MHS and the government department have now been warned that we are giving this matter serious consideration to make sure that costs are controlled and that the extra layer of bureaucracy produces the reduction in food poisoning which I believe the noble Earl referred to as one of the targets. We shall be giving that matter close consideration. However, in line with the conventions of the House, it is with some reluctance that I withdraw the Motion. I beg leave to withdraw the Motion.
§ Motion, by leave, withdrawn.