BSE

HL Deb 16 October 1996 vol 574 cc1743-64

6.50 p.m.

Lord Carter rose to ask Her Majesty's Government what is the current situation regarding BSE.

The noble Lord said: My Lords, perhaps I should begin by explaining why we are discussing BSE on an Unstarred Question. Your Lordships will remember that there was for some considerable time a government Motion on BSE on the Order Paper. It was intended to provide the slot for debate on the parliamentary orders which are required for the accelerated slaughter scheme. Those orders have not been laid and therefore the Government decided that there should be no debate. I believe that an Unstarred Question by an Opposition spokesman is not the proper way to deal with the crisis in British farming. We should be debating a government Motion.

However, the question that obviously arises is this. What is the position regarding the parliamentary orders that we were expecting? Will they be laid or postponed? Perhaps the Minister will tell the House and the industry the situation as regards those orders.

Arising from that, what are the government proposals regarding the accelerated slaughter scheme? It was an integral part of the Florence agreement. We have had the evidence from Oxford University which was reported in Nature. The Minister may well say that the Oxford evidence puts a rather different perspective on the numbers required to be slaughtered under the accelerated slaughter scheme. I remind your Lordships that the figure of 40,000 now suggested by Oxford University as the possible cull under the accelerated slaughter scheme is the same figure that was suggested when the scheme was first proposed by the Government. It was the Government who allowed themselves to be forced up in negotiation in Brussels and Europe from a figure of 40,000 to 120,000. Presumably they now have to justify a reduction back to the figure of 40,000 with which they started. It seems to me that the Government have allowed themselves to be put in a weak negotiating position.

It would be helpful if the Government would tell us their latest estimate of the numbers required to be slaughtered under the accelerated slaughter scheme to secure a lifting of the export ban. If lifting of the ban is unlikely, what is the Government's estimate of the numbers required under the scheme to reduce the incidence of BSE? I do not refer to eradication of BSE.

Clearly the timetable announced, in my view extremely unwisely, by the Prime Minister after the Florence Summit—he expected the backlog on the scheme for animals over 30 months to be cleared by October-November—is out of the window. We are now told that it is likely to be December. Some in the trade are saying that it will be March. What is the latest government estimate of the date by which the backlog will be cleared? Is it correct that there is today a backlog of 400,000 cattle?

What is the Government's latest view on the evidence regarding maternal transmission? Is there concern over the actual transmission of BSE from dam to calf? Alternatively, is there, as has been suggested, perhaps an inheritance of a predisposition to BSE if the animal is exposed to infected feed? If it is the latter, that is much more hopeful than the possibility of direct transmission from cow to calf.

We know that in the summer the Government renegotiated with slaughterhouses and renderers the arrangements and the price for slaughter. Can the Minister confirm that £22 million of excess profit earned by the slaughterers between March and June was not clawed back? That was the trade's price for continuing the scheme. I understand that in March there were quotes of £30 to £40 a head for slaughtering. So why did the Government fix on £87.50 and, it seems, waste some £22 million of public money?

What is the situation now regarding tallow, gelatine and semen? Has the ban on these products been lifted? We know that there were problems over gelatine. To be fair to the Government, they were problems within the trade rather than the government department. However, will the Minister now tell us the latest position regarding the lifting of the export ban on these products?

How much of the very welcome financial assistance that is being offered to farmers and others is genuine new money and how much is money that is being brought forward—it is welcome if it is paid early—but was in the department's estimates anyway? How much of what the Government have now announced is new money?

In passing, although the recently announced £16.6 million extra for cold storage is extremely welcome, I understand that extra cold storage was asked for by the NFU and the trade some months ago. Why has it taken so long for the Government to recognise the strength of the argument and to provide the resources for provision of cold storage?

Perhaps I may return to the accelerated slaughter scheme. When it was first proposed, in the document responding to it from Brussels and indeed in the Government's own proposals, the alternative restriction orders on affected farms rather than slaughter were proposed. That was later dropped but no explanation ever given. Anyone in farming might ask that if the animals are unable to leave the farm—they are restricted on the farm and continue in milk production, or whatever, but do not enter the food chain—why was it decided to drop the possibility of restriction orders and to concentrate entirely on slaughter as the way to deal with the issue?

We now have the news in today's Independent. The headline is: "BSE fear for millions of British pets".

This is extraordinary. It arose from a Question from my colleague in another place, Mr. Martyn Jones, a microbiologist. He was told by Angela Browning, the Minister of Agriculture, that as confirmed in a written reply, mammalian meat and bone meal (MBM)—the powdered residue from culled and rendered cattle—is used in pet food. She states: Because of our concerns that pet food containing MBM might present a possible risk of cross-contamination of livestock feed, new measures to prevent this were introduced on 1 August".

It is clear that the Government have insisted now that this material has to be used in a separate building, with no contact with equipment or vehicles used in the production of livestock feed. Do the Government ever learn? We are told that cross-contamination was the reason for animals born after the ban being infected. The Commons Select Committee investigation into BSE was told in April that cats had tested positive for a form of spongiform encephalopathy. The committee was also told that while the high risk specified bovine material such as spinal chord would be incinerated, sides of meat would be rendered into meat and bonemeal which would then be disposed of either by landfill or incineration. There was no mention of MBM being used in pet food. That is an important point, not perhaps because of the dangers to pets but in particular because of the danger of cross-contamination. That posed an enormous problem through the failure of the Government to enforce the necessary regulations which led to the cross-contamination in the early 1990s. It seems that the Government were prepared to run the risk again with the MBM; we are now told that it has been used in pet food.

Finally, can we now assume that the Government's policy of nonco-operation with our European partners that was followed earlier this year has proved to be a complete failure? On Monday in the other place, in response to a Private Notice Question by my honourable friend Dr. Gavin Strang, the Minister, Mr. Hogg, said: Moreover, there is another development. It has become increasingly clear during the summer that the prospect of other member states agreeing to an early and substantial lifting of the export ban for the United Kingdom has lessened".

I like the word "lessened". That fact is likely to diminish the support that right hon. and hon. Members would wish to extend to a substantial accelerated cull policy".—[Official Report, Commons, 14/10/96; col. 165.]

What the Minister is saying, in other words, is that we have completely failed to convince our European partners and we cannot get the orders through Parliament anyway. What an epitaph for a thoroughly mishandled policy.

7.1 p.m.

Lord Soulsby of Swaffham Prior

My Lords, first I apologise to the House because I shall be unable to stay in the Chamber for the full duration of this debate. I am grateful to the noble Lord, Lord Carter, for setting down this Question because, despite his apologies about it, it provides an opportunity to look at the situation in relation to BSE.

It will surprise no one that BSE generates more questions than answers, and one of the reasons is that the disease is not like any other infectious disease. Hitherto, decisions have had to be made on assumptions, possibilities and plausible interpretations of findings and the much criticised control measures on BSE instituted in 1988 and in 1989: the slaughter of affected cattle and the ban on specified bovine offals. Despite those criticisms and despite the inadequacy of the policing of the ban on specified bovine offals, the prevalence and the incidence of BSE has shown a spectacular decrease in the United Kingdom since the peak of 1992–93. One might ask how much greater would that decrease have been had the ban on specified bovine offal feeding been applied as rigorously as now is the case.

The noble Lord, Lord Carter, referred to the Oxford report of Professor Anderson which was published in Nature recently. That clearly indicates that BSE will disappear in five years. New infections from contaminated feed will be, in the report's words, close to zero shortly, and any new cases will be due to maternal transmission. The estimate is that maternal transmission cannot sustain the epidemic. The epidemic is likely to fade close to extinction by the year 2001 in the absence of culling. That is a very important conclusion that the Oxford study has come to.

Therefore, there is little justification for the accelerated culling programme agreed in Florence. Of course, the Oxford data were not available at that time, so the decision to slaughter 120,000 animals was taken before that information became known. There is, of course, an urgent need to review that decision based on the new evidence. The Oxford conclusion that the most effective option is to remove cohorts of animals associated with cases of BSE, complemented by a policy targeted on maternal transmission, would involve fewer than 40,000 cattle—in fact, slightly fewer than the original 40,000 proposed.

However, even the maternal transmission of this affliction is under doubt and reconsideration at this time and it may be that the selective slaughter based on maternal transmission also needs to be challenged and reassessed.

There are many problems associated with the slaughter of animals, even those in the over 30 months scheme. They have many important impacts on welfare and the disposal of carcasses, let alone the financial problems and implications of the backlogs that are occurring, as well as the ethical issues.

One of the major effects of the BSE crisis is a fall in demand for beef, not only in this country but in the European Union in general. There is a need to create a demand mechanism to avoid a further reduction in markets and the massive expense associated with the many tonnes of intervention beef that will be in storage. There is an opportunity here for British leadership in Europe with respect to the recovery of the beef industry. Hitherto, it would appear that we have always been playing off the back foot, if I may use a cricketing term with respect to BSE. Now is the opportunity to be more aggressive in our approach, and there is no doubt that the Minister will be aware of the demand-improvement scheme initiated for beef sponsored by the Meat and Livestock Commission. This initiative requires modest financial funding but will save massive expenditure on intervention payments and will certainly greatly enhance beef consumption in the United Kingdom and the European Union.

This should be coupled with a new approach and a new strategy towards BSE based on the new scientific evidence. I would propose that we abandon the culling agreements made in Florence. They were reached at a time when scientific evidence was not available to support them, and they cannot be supported by the new evidence. They are vastly unpopular with many bodies, including the Country Landowners' Association, the British Veterinary Association and many others, and they are unacceptable to many.

Noble Lords may know that in Switzerland, where they have had about 200 cases of BSE, there was a plan to slaughter out a large number of herds associated with this, involving a cull of nearly 250,000 cattle. This is unlikely to go forward because of the very strong opposition of livestock farmers and veterinary authorities in Switzerland. The same applies in this country to some extent.

I would like to see that cull replaced by a rigorous application of feed controls, culling of a limited nature to take in maternal transmission—which, if it is so, is the only scientific basis for culling—and the increased designation of herds as "safe herds" based on freedom from BSE and certification of feeding. The assured beef scheme, the certified herds scheme and the BSE-free herd scheme of certification are examples where this might pertain.

As BSE is likely to disappear well before 2001, certain areas such as Northern Ireland and Scotland could well be designated geographical areas in this country. I feel that this would be a much more incisive approach than the massive and, I and many other people believe, unnecessary culling previously proposed in Italy. There is no good evidence that the ban on beef exports would be lifted even if that cull took place, as has been mentioned by the noble Lord, Lord Carter. Some European Union countries will lift the ban on British beef only when BSE has been eradicated. So why progress with this culling scheme, which offers no advantage over a scheme involving little or no culling or very limited culling at the most?

7.9 p.m.

Lord Palmer

My Lords, I too should like to thank the noble Lord, Lord Carter, for once again raising this important issue, which, it is important not to forget, is the most serious crisis facing farmers this century. Although a farmer, I have no interest to declare other than the wellbeing of my friends and neighbours whose cattle income this year will be down—even by the least pessimistic forecasts—by as much as 60 per cent.

Like other noble Lords, I agree that the export ban must be lifted, if only to restore consumer confidence here in the United Kingdom. If the ban is not lifted, the Scottish economy will be decimated. Last year, the export market was worth in excess of £120 million.

In Scotland, the cull has gone so much more smoothly than in other parts of the United Kingdom. For this, the noble Earl and his Secretary of State must be most warmly congratulated. His right honourable friend the Prime Minister gave his word in Aberdeen earlier this summer that the Florence agreement would be enacted in full. As the noble Earl is only too aware, the accelerated cull of cohorts has still to be implemented. As it only involves 5,400 cattle, I implore him tonight to put Scottish beef producers once and for all out of their misery.

7.10 p.m.

Lord Stanley of Alderley

My Lords, I have to declare an interest, in that I lost all compensation for an over 30 month-old bullock for committing the heinous crime of giving it a plastic tag instead of a metal one. Despite this Alice-in-Wonderland story, I am not, I have to admit, in overall loss on my beef production.

I do not know whether, before asking my questions, I should pray for myself or my noble friend Lord Lindsay. I know that I do not have to pray for the noble Lord, Lord Carter. My first and most important question is similar to that of the noble Lord, Lord Palmer. It is to ask my noble friend whether any future action to deal with BSE will be based on scientific evidence or political expediency. If the answer is that the Government will continue to follow the path agreed at Florence—which is what I think the noble Lord, Lord Palmer, suggested—and institute a further cull, can my noble friend give an assurance that no such cull will be put into operation until there is a firm promise that when such a cull is completed, British beef will be allowed to be exported?

Obviously, it is vitally important for the export market to be opened. I hope that my noble friend will confirm that it is the Government's intention to achieve that. I repeat the question, because it is market talk—indeed, my noble friend Lord Soulsby endorsed this—that my right honourable friend the Minister of Agriculture has given up the battle to achieve such an objective, as it is thought that he believes that his Continental counterparts will not give such a guarantee, whatever action he or we take. Perhaps I should remind your Lordships that it only requires a majority vote to lift the ban, so we could perhaps do without the Germans.

If, however, the Government still hope to persuade the EU to allow our beef to be exported if we abide by certain rules and culls, then I have with great regret to say that the Government will find it difficult, maybe impossible, to persuade the EU or to regain the confidence of the industry. I am sorry to say that both have lost confidence in the Minister of Agriculture but more particularly in those who have proved themselves totally incapable of giving him sound advice.

I have sympathy for some of the political problems that my right honourable friend has had to sort out. However, I have none whatsoever for the totally chaotic way the policy has been carried out in England and Wales, although I accept that north of the border there seems to have been a vast improvement. That must reflect on the advice given to my right honourable friend by his senior officials in his department.

Perhaps I may drive the knife in even further by saying that I am full of admiration for the unfortunate MAFF officials at grass roots who have the unpleasant task of explaining the chaos to me and my neighbouring farmers. My admiration for them is unstinted. I wonder too whether it was wise for a MAFF official, when representing my right honourable friend in the EU, to offer as an excuse that BSE was an act of God. It is the farmers' task every day to deal with acts of God. I can see the noble Lord, Lord Carter, nodding. It appears that MAFF is unable to seize the problem.

I could ask a multitude of questions illustrating the sad incompetence of MAFF and its veterinary department. I started with four questions; the noble Lord, Lord Carter, asked one, so there remain three of which I gave my noble friend notice. First, can he tell me whether I can put a bullock into the food chain which is over 30 months old according to its CID, but has only two broad teeth? Can my noble friend tell me what happens if the bullock is pushing but not really showing its third tooth? What next? Does the farmer have to put 6p under the bullock's pillow to get him in?

Secondly, does my noble friend agree with my right honourable friend Mr. Freeman that some form of open air incineration might be accepted? Alternatively, does my noble friend agree with my right honourable friend the Minister of Agriculture that such a course would be unacceptable? Thirdly, what price will the Government pay for over 30 month-old beef after 31st October?

Finally, there is a vital lesson to learn from this tragedy. It is a tragedy, even though I have laughed at it at times, as one has to. The lesson is to ensure that in future there are some senior officials in responsible positions who have practical experience of farmers, farming and slaughtering. Some of the advice given to Ministers shows a total inability to understand those problems and, indeed, a certain arrogance.

I am truly sorry—and I mean it—that my remarks this evening are less restrained than when we debated the matter on 17th April. However, I am a Tory, I shall remain a Tory and I shall remain a farmer. I cannot mince my words.

7.17 p.m.

Lord Grantchester

My Lords, I congratulate my noble friend Lord Carter on bringing forward this subject so early on the House's return. I should declare an interest in that I own a dairy herd in Cheshire. I am disappointed to have to report to your Lordships that the Government's handling of the crisis means that there is still anger, turmoil and distress in the industry.

Following the ministerial announcements in March, farmers looked to the Government to provide an orderly scheme to remove by October the backlog of cattle waiting to be slaughtered. But instead of seeing progressive clearing, farmers have had to resort to all kinds of means to move cattle, and now, as winter approaches, most farmers still have as many cattle to be slaughtered as when the scheme started. So after seven months we are still no further forward.

Over the summer, farmers have been agonising over just who will take their cattle. Fields have been set aside from productive use to roam cattle. Is it any wonder, therefore, that farmers feel completely betrayed when the Minister announces, on his own initiative, a cut in the rate of compensation for the over 30-month cattle? He claims that: the level of compensation is too high, pro-rata to the beef trade". Little wonder that farmers gave him such a rough reception in Bournemouth last week.

Having presided over the collapse of the beef trade, the Minister seems intent on bringing the rest of the industry down to the same level. He then insults it by claiming that farmers are using the scheme to improve their herds. We had a backlog in May and we still have one now. Only last week an announcement was made that a registration scheme for clearing the backlog would be established. This must be given priority.

The slaughtering scheme has created a very murky trade. It is distorted by vendettas, favours and personal relationships among the people involved in it. Abattoirs and renderers are being paid well over any sensible rate. There are allegations of cash inducementsbackhanders—to enable cattle to be taken for slaughter.

Farmers are naturally unwilling to speak out because they fear retaliation. Many of the current arrangements may not technically be illegal but they distort trade and leave the farmer as a bystander. One example is that many abattoirs are buying in live cattle through dealers and dispersal sales to put them through the dead-weight schemes themselves.

Last month, my National Farmers Union branch in Nantwich conducted a survey on the size of the backlog. Nantwich is only one branch in Cheshire, but nevertheless the survey can be seen as representative of the problems facing us. The average holding had 13 head registered with the local market in April/May. How effectively have those been cleared? From that average of 13, two have gone through the local market on the official live-weight scheme; just less than an average of five have gone on a dead-weight basis; and just over four have gone as—I use the official term—"casualties".

Thus an average of two are still waiting. But once you add the normal summer throughput of cattle, a total of 12 head per holding are now waiting to go. So despite those cattle going for slaughter, the backlog is virtually the same now as it was then, back in May.

Many so-called casualties will be genuine, but farmers desperate to move cattle have deemed many to be casualties, as they have to be slaughtered immediately on welfare grounds. Having successfully had a casualty certified, farmers have then been incensed to be kept waiting for their money and to see transport charges of £ 1 per mile deducted from payments for transporting the casualty often 200 miles to what in normal times is no more than a pet crematorium.

Nationally, we are now slaughtering 35,000 head a week. That is an improvement on the 25,000 figure which applied earlier this year, and I applaud the Minister for achieving that increase. But, as the Country Landowners' Association has made clear, that needs to increase to 55,000 if there is to be any hope of clearing the backlog.

The registration scheme announced last week must create an orderly and even-handed system of access to slaughtering facilities. We still need answers to five questions. What do the Government intend to do with the figures they obtain? How will the scheme be administered? And by whom? What will be the priorities? And, most importantly, when can farmers see an end to this turmoil?

The intervention board has come in for universal criticism as it seems unwilling to take the lead in according any priority to the backlog. Yet farmers now hear—perhaps the Minister can confirm this—that the pay rates for intervention board staff have been increased much more than for staff elsewhere in the ministry.

Slaughterhouses have been brought to book again and instructed to clear the backlog according to the lists they made in the spring. That gives a green light for the unsavoury practices to continue on an even greater scale.

The new registration scheme is needed immediately. Regulation of access must be put outside the control of slaughterhouses. A different policy is needed and control must rest with a truly independent body. The Meat and Livestock Commission has been suggested, but I should prefer the ministry's own regional service centres to be used.

That is the priority in the countryside, and only when it is dealt with can the industry regain credibility with the consumer in Britain and with the rest of Europe. We have waited far too long; the time to act is now.

7.24 p.m.

Lord Dixon-Smith My Lords, I, too, am grateful to the noble Lord, Lord Carter, for initiating the debate. I have no direct involvement in the cattle business myself, but my brother is prominent in the British Holstein Cattle Society and owns one of the most successful dairy herds in the country. I have many other contacts with others directly involved in the industry.

I have to keep reminding myself that it is the application of the precautionary principle to the cattle business as a result of the still unproven possibility of a link between BSE and CJD that lies behind the difficulties in the industry today. This is not an issue of animal health and welfare, important thought those subjects are. It is the possible risk of cross-species disease transmission that is the justification for the present state of turmoil in this great industry and the enormous expenditures being undertaken.

Research into BSE, if reports are correct, is costing some £9.7 million per year at the present time, a not unreasonable sum. The precautionary principle, however, is costing a great deal more: 600,000 cattle have already been slaughtered. Even if compensation averages £300 per cow—a remarkably, indeed unrealistically, low figure—that suggests expenditure already of £1.8 billion. That is an enormous sum of money, and we know that there is more to come. I would be interested to hear from my noble friend the Minister what the actual expenditure has been to date and what is the estimate for future expenditure.

Justification can come only when the results of the present research are known. But BSE and CJD research programmes are extremely time-consuming. We have to face the possibility that when the results finally come through they may show that all this expenditure was unnecessary. Are we really saying that the precautionary principle should apply regardless of cost? That seems to be the situation.

We all know that dairy and beef farmers are upset at the way this matter has developed. The problems have their roots in a regional disparity between cattle numbers and slaughtering and rendering capacity. Some regions are implementing successful schemes, but problems arise in those regions where there is an excess in cattle numbers. It is probably useful at this stage to put on record the experience of one particular herd (not my brother's) since it explains the ill-feeling that has developed.

That herd normally consists of 160 cows in milk with followers. When the possible CJD linkage was announced and the cull programme initiated, normal management of herd numbers had to be suspended—cull cows could only go for disposal. The herd manager estimated that he would lose 70 animals in the cull (that figure includes normal wastage). He therefore decided to keep 30 extra heifers in order to maintain herd numbers. Animals for slaughter were booked through the herd's normal agent to go in June. That agent has an allocation of 280 cows per week into the slaughter scheme but has been able to achieve that figure only twice. In the first week of this month he sent 260 animals for slaughter, but 400 more were added to his waiting list. He is at present clearing animals entered for slaughter in May. So no cattle have left the dairy herd to which I refer.

As a result, herd numbers are at present 210 and milk production is inevitably in excess of quota. The farm receives 25p. per litre for quota milk but has to pay a levy of between 32p. and 33p. for every litre by which it exceeds its quota. By good management it has contained excess production to 3½ per cent, but to bring it back within the quota it must increase the number of cows culled. In the meantime it has seen the value of the cull cows drop by more than £100 due to the cut in compensation introduced a short time ago. As winter approaches there is an increasing animal welfare problem due to a shortage of adequate housing and fodder.

That is a well-run herd owned by an agricultural college which has tried to abide by the rules. Needless to say, the college is not very pleased. I should add that the present situation which has affected so many people has had its effect in the market-place, where unscrupulous people are now operating unethical, if not illegal, practices. Also, it has become almost impossible to deal with the question of casualty animals sensibly.

What is to be done? This country has lost its export market. But the export ban is only a part of the problem, since continental markets have collapsed for other reasons in an even more dramatic way. So simply lifting the export ban is not the obvious solution it appears to be since there is not an export market to supply.

However, it seems that there would be export demand for Scottish beef where it is proved to be BSE free. I was pleased to note that the Irish are supporting the case for the export ban to be lifted from beef from Northern Ireland. I wonder whether my noble friend the Minister would agree to a bit of fancy footwork by attempting what I would call an incremental approach to removing the export ban. Surely some progress is better than none at all. It would help if we could get the ban lifted from particular sectors.

I ask my noble friend the Minister to consider another point which might help in the present situation. I believe that the beef industry has a scheme of advance payments because the financial implications for the beef industry on cash flow is clearly so much greater than is the case in the dairy industry where milk cheques come in fairly regularly. However, with the advent of winter, the dairy herds are also now heading into crisis. I wonder whether the scheme of advance payments could be extended to the dairy sector, particularly to apply where there are herds in which it is well known that the cattle have been entered for slaughter for many months and it has not been possible to get them away from the farm.

I await with great interest the reply of my noble friend the Minister.

7.31 p.m.

Lord Rathcreedan

My Lords, in making comments following the most pertinent question of the noble Lord, Lord Carter, I must declare an interest. I am not so regular an attender in your Lordships' House as I would like. My time is filled and my livelihood primarily derived as an auctioneer and valuer of livestock, principally dairy cattle. Among the animals that I have sold by auction have been many owned by the noble Lord, Lord Grantchester, from his fine herd in Cheshire and by the brother of the noble Lord, Lord Dixon-Smith, from his equally fine herd which, as he said, recently won the prestigious competition for the best dairy herd of any breed. I found the noble Lords' comments most apposite to the situation and I hope that the Minister will answer the many queries that they raised.

In the course of my business I have been closely concerned with the problems caused by BSE since its discovery several years ago. But the situation at present is nothing short of a desperate and unprecedented crisis. When the Minister for Health made his fateful announcement on 20th March, I knew immediately that it spelled difficulties ahead for my profession. But how the events of the past seven months have unfolded almost beggars belief.

The principal problem that has affected those involved in the dairy farming industry concerns the over 30-month slaughter scheme and the way in which it has been carried out. In whatever form the Government envisaged it working, it seems to have been a complete shambles. The results can be felt on virtually every cattle farm, both beef and dairy, throughout the United Kingdom. There appears to have been little or no visible consultation with the industry at the outset as to whether the propositions for the over 30-month scheme were feasible or not. It has been akin almost to setting out across a desert with a limited amount of petrol in the tank of one's vehicle, not having the faintest idea of how many miles it is to the other side.

As other noble Lords pointed out, as we currently stand there is a huge backlog of cattle. The noble Lord, Lord Carter, quoted a figure of 400,000. That is the figure most generally quoted as the currently ongoing backlog. That has served to more than halve the price of dairy cattle at the present time and, as winter fast approaches, the situation is worsening. Those who have been unable to get cattle slaughtered have been forced to keep them, many of them still producing milk and adding to production quotas, both their own quotas and obviously the national quota. The current price of purchasing or leasing additional quota is now prohibitive to most dairy farmers. As the noble Lord, Lord Dixon-Smith, pointed out, in numerous cases milk producers have additional heifers calving this autumn for which they have no room, feed or quota and which are virtually worthless on the open market. Many of the cattle that have to be sold at the current market price owing to farmers retiring, relinquishing tenancies or being forced to sell due to financial restraints are making £100 to £200 less than could be obtained on the over 30-month slaughter scheme, if only farmers could get access to it.

Many of those cattle are perfectly serviceable dairy cows which in the normal course of events would be purchased by other farmers for milk production. The only people who are able to buy them at the moment, as the noble Lord, Lord Grantchester, pointed out, are those who have special connections with access to abattoirs. Those people are making substantial profits out of the scheme at the expense of the majority of the nation's farmers. Obviously, it is an ill wind that blows everybody off course. One can expect that there will always be people about to profiteer from a given situation. One has heard about abattoir owners slaughtering cows from several sources under the scheme and doing a worthwhile job who realised how much more they could make by purchasing the cows for themselves and slaughtering them. I do not say that every abattoir owner does it, but I have heard of such cases. The other day I was also told of an abattoir owner who bought a new top of the range car with a specially ordered number plate, P6 BSE, by which he celebrated making a million pounds in profit over the first six months of the BSE scenario.

There does not seem to have been any proper governmental organisation of the scheme. Abuse of its principles is rife. The secretary of the National Cattle Breeders' Association told me that, in company with other agricultural organisations, it warned the Government in April, shortly after the scheme was announced, of many of the problems associated with carrying out such a scheme and in particular told them of the need for a system of regulation to be instituted to ensure that the scheme worked smoothly and fairly for all. Now, in order possibly to fund tax cuts in the coming Budget in an attempt to have themselves re-elected, the Government have seen fit to cut the price paid in compensation. For those who have kept cattle since the spring, unable to get them killed, to be told that they are now worth even less is a rather bitter pill to swallow. It is no wonder that at present farmers feel betrayed by the Government.

What is of prime importance is that the Government take steps to resolve the situation as soon as possible. In nearly 25 years in the business, I have not faced any situation so grave as the present one. Neither have many of those with a lifetime's experience in farming. If the backlog of cattle awaiting slaughter can be cleared as swiftly as possible, it may help to put the industry on a forward track. The Minister of Agriculture last week announced a package described as £45 million of aid to farmers. A substantial proportion of that sum is not going anywhere near the pockets of farmers. It simply provides storage for carcasses pending rendering by an organisation whose monopoly has the industry in a stranglehold. We cannot blame the Government for that particular unfortunate circumstance, but we hope that steps might be taken in the future so that the situation cannot arise again.

What will happen when the storage capacity is filled? We shall be back to fewer numbers being killed and pictures taken by a voracious media of cattle starving to death in the fields as farmers are unable to feed them or have them humanely killed. Cannot the Government give serious consideration to open air incineration of cattle—at specially approved sites, of course—to clear the backlog as quickly as possible? That would have the benefit of releasing the industry from the stranglehold at present held on it by the renderers.

Over the past seven months there has been considerable debate on the merits or otherwise of an accelerated slaughter policy to rid the country of BSE and allow the beef export ban to be lifted. Such a policy was agreed by the Prime Minister at the Florence Summit in June, though subsequently, about two months after, it was dismissed as being without scientific justification. The more cynical among us might think that for those last words we should read: "We've done our sums now and can't afford it if we're going to cut taxes before the next election". Such a decision is in any case hypothetical until we have cleared the backlog in the over 30-month scheme and it will warrant further debate in the future.

For the present, I trust that the Government will face up to their responsibilities to the nation's farmers; that they will immediately implement a fair system of registration so that genuine farmers can get their barren cows disposed of; that the full payment as originally announced will be restored; and that the 30-month cull will proceed with due haste by whatever means are necessary in order to give those who provide the country's beef and dairy products a sense of purpose and hope for the future—commodities which are sadly lacking at present in the majority of the nation's farmers.

The cattle business, in all its forms, is probably this island's oldest industry. It dates from the time when our ancestors wore loincloths and hunted with spears. I have been proud to serve it for my entire working life and fervently hope that this great industry will not be destroyed on the altar of political expediency.

7.41 p.m.

Lord Mackie of Benshie

My Lords, I am beginning to feel sorry for the Minister, though he is looking remarkably cheerful. I hope that he heard the noble Lord, Lord Rathcreedan—I understand that he did—who is an excellent auctioneer. He drove his points home and they were very good points.

It is a sorry tale of woe. It will not do any harm to remind the Minister of the sequence of events. First, the Government do not believe in regulation. When the renderers decided that a system of continuous rendering was much cheaper, the authorities simply let them go ahead. From that flowed without doubt the enormous incidence of BSE; the 160,000 cases of which we have heard and the follow-up slaughter cases. It does not do for governments to think that industrial peopleprofit-makers—think always of the good of the nation. They need regulation.

Then we went on to the Government's introduction of compensation. But they only paid half. That led to a reluctance on the part of farmers to part with cattle at half price when, perhaps by cheating, they could obtain the full price. Then we came to the handling of the crisis by two Ministers when they feared that there might be an epidemic of the new type of CJD caused by BSE. I am not surprised that the Germans were terrified—they are susceptible anyway—because the Minister frightened me. I really thought, when I heard him say that he would slaughter every beast in the country if necessary, that some terrible indication was on the way. The Government then made matters worse by saying, "But give us to the weekend and we will be able to tell you better what is going on". The mishandling of the whole affair was quite appalling.

We now come to the point raised by the noble Lord, Lord Soulsby, who is a man I respect greatly. But I quarrel with one thing that he said. There is no new scientific evidence to alter the situation; there is a new scientific evaluation. However, a lot of us knew the figures anyway and realised that the whole thing was declining so fast that it would be finished by the time we came into the new century. But to make a promise that we would slaughter so many cattle—we knew it was a political promise—and then baldly to announce that there was new evidence and we would cancel it is not the way to obtain the co-operation of the people of Europe. We must have consistent policies, and that is what there has not been in the Government.

The noble Lord, Lord Palmer, spoke well of the handling of the situation in Scotland. That is true, and the noble Earl may take some credit that it has been better handled there than in England. But that is not to say that there are not a great number of people in Scotland with a backlog of cattle that they cannot get rid of looking at the coming winter and at a lot of extra expense. To say to the people who are holding on to the cattle that they will receive £50 less than those who were fortunate enough to get rid of them before October is not encouraging. The Minister should think again in that regard.

I shall try not to go on too long; there are many comments that one could make—so many that it must be wearisome for the Minister listening to them. But the fact is that the situation is a mess. The sooner responsible people in the Government realise that and do something about it at the top—the noble Lord, Lord Stanley of Alderley, mentioned the incompetence not only politically but apparently among the experts—the better everything will be. We need in political and other quarters a good deal of human culling, though I would not go so far as to advocate slaughter.

7.46 p.m.

The Earl of Lindsay

My Lords, in reference to the last point, I am not sure what the difference is between a human cull and human slaughter. The noble Lord may tell me afterwards.

Like other noble Lords, I am genuinely grateful to the noble Lord, Lord Carter, for raising this issue. It is of continuing importance to so many across the United Kingdom, and it is therefore appropriate that in this overspill period we should discuss it. I did not realise that there was quite so much cross-party trade in cattle in this House. The noble Lord, Lord Rathcreedan, identified and owned up to the cattle links that he has with all sides of the Chamber. I have heard of the cross-sectional nature of the beef industry and BSE generally, but the cross-party nature of the trade is unusual.

I must put down one or two pointers to remind noble Lords what has been going on, before turning to some of the individual questions. We have been making and will continue to make a substantial effort to address the impact of the BSE crisis. As my noble friend Lord Soulsby of Swaffham indicated, it is unprecedented. It involves a science which is still only partly understood. The extent of the challenge is of a proportion of which few of us have had experience in the agricultural world. It has generally presented an immense challenge to everyone, both within the Government and within the industry itself. That is why we have committed £2,500 million in order to tackle some of the issues raised by BSE. If the noble Lord, Lord Rathcreedan, thinks that that commitment to the farming industry can in some way be linked to tax cuts at the next election, he is perhaps a better auctioneer than he is an analyst.

Throughout the past months, especially during the summer months, both myself in Scotland and my agricultural colleagues in other departments spent a huge amount of time with the beef industry, both at the producer end and at the slaughter, auctioneer and processor end in order to listen to them and to see that the measures we are bringing in are leading to good effect. We consulted and liaised extensively with the industry throughout the United Kingdom and with all the different parts of the industry. I therefore take grave objection to the accusation by the noble Lord, Lord Rathcreedan, that there has been a failure to consult. In fact, the most extraordinary assertion was that the 30-month scheme itself was something of a shambles as an idea in that it was the National Farmers Union which requested the scheme. It approached Ministers and said that that is what it wanted. We listened to the NFU and to the retailers. This is not a government inspired scheme; it is a National Farmers Union inspired scheme.

We are aware that, despite the £2.5 billion committed to date, we cannot address exactly the circumstances of every individual throughout the beef industry and the ancillary trades. But we can ensure that we put sufficient compensation, rescue aid and support into the essential links to the industry in order to ensure its long-term survival. By making sure that the essential links to the industry survive, we are also enabling the benefits of our aid to filter down into some of those ancillary trades. At the end of the day we need those links to survive the crisis in order that we come out the other side.

The other truth, on top of the government support, is that consumer confidence will be the critical factor. We can carry on committing help to the industry, but if the consumer, both in this and other countries, is not back buying that beef, the industry will not survive in the form that we know it.

I could spend my entire time allocation detailing the measures we have brought forward regarding consumer confidence—the measures for producers, for abattoirs and cutting plants, for renderers and so on. However, a number of important questions have been raised by noble Lords and I wish to deal with them.

Many noble Lords spoke about the accelerated slaughter scheme. The noble Lord, Lord Carter, introduced it early in his contribution. The Florence framework remains intact. I should point out that we have not reneged on it and we have not broken promises. We fought hard in Florence to ensure objective criteria—measurable elements regarding human and animal health—and that as far as possible science could be one of the bedrocks on which the Florence framework rested. We sought and won the concession that the Florence framework should be guided mostly by the veterinary committees and not by the Council of Ministers in order to minimise the politics of the timetable. Given the importance placed on objective criteria in the Florence framework—when the science attaching to BSE moves forward a stage when the Oxford group reports and when the interim report from the maternal transmission experiment comes in—it would be remiss of us all if we did not feed that new science into a framework which seeks to rest as much as possible on objective criteria.

It is not only the United Kingdom Government who have sought to assimilate this new science. It is also the Commission itself. In addition, no one should forget that scientists and politicians can declare a product safe; but, at the end of the day, if the consumer does not want to buy the product, the product will not sell, despite the best assurances of the other experts and anyone else involved. Therefore, the Florence framework rests on measures which are designed to bring consumer confidence back into play. That is why I agree with the noble Lord, Lord Palmer, about the importance of moving ahead with a selective cull as soon as we have identified the most appropriate selective cull to adopt. That decision will be taken by ourselves in consultation with the Commission and its experts who are studying the matter simultaneously.

My noble friend Lord Soulsby of Swaffham Prior felt that there was little justification for such a scheme but at the same time said it is important that we boost the demand for beef. The selective cull, if it triggers the lifting of the export ban, will do exactly that. I should point out that the numbers originally envisaged will drop significantly given the fact that the over 30-month scheme will absorb many of those which were envisaged as part of the original large number.

I would defend to my noble friend Lord Stanley of Alderley my right honourable friend the Minister for Agriculture, Fisheries and Food and his officials. All the agriculture departments across the United Kingdom have had an immense amount of work to cope with in responding to the BSE crisis. Not only, as I have said before, is it unprecedented in its nature but all agriculture departments are anyway committed to a wide number of other schemes which are unrelated to BSE. Therefore, the additional work put on both Ministers and officials has been considerable. I believe that broadly we have been getting the right aid out in the right direction. That has been largely based on the extent to which we have maintained dialogue with the industry in all its parts. The efforts of my right honourable friend should not be underestimated or dismissed.

The backlog should be cleared by the end of the year. One can put various interpretations on the figures that have been produced, especially as surveys of farmers very often tempt them to identify more animals than they immediately want to put into the scheme. Being cautious souls, they are looking at some of the other animals that they know they will want to bring forward in the next few weeks and months.

The slaughterers themselves who have been playing a major part in the scheme have been receiving a fee since earlier this summer which is reduced from the first fee of £87.50 established at the start of the scheme. It was vital at the beginning to ensure that the slaughterers, renderers and everyone else involved in this crucial 30-month scheme came on board and responded with both their capacity and their determination to get numbers up immediately. There was a need to ensure that they forewent other business which they might otherwise have been able to pursue. For instance, a good number of scheme abattoirs have had literally to give up their links with other parts of the market in order to remain members of the scheme. I can give the noble Lord, Lord Carter, and others an assurance that we continue to scrutinise the compensation and payments that go to everyone involved in the 30-month scheme in order to identify any discrepancies or excesses. We continue to negotiate the best possible rate for the scheme.

I can inform my noble friend Lord Stanley that cattle coming into the scheme with documentation and teeth which suggest a slightly different story will be judged by the documentation. The documentation takes priority over the teeth.

Lord Stanley of Alderley

My Lords, I am sorry to interrupt my noble friend, but that is not happening at the moment. I can tell him of two abattoirs that are doing it on teeth.

The Earl of Lindsay

My Lords, I took advice on this matter just before speaking in order to give my noble friend a clear answer. If I have anything to add to that simple answer, I shall contact my noble friend.

My noble friend also asked about open air incineration. The noble Lord, Lord Rathcreedan, also mentioned it. There is no plan at present to use that option. The intervention board is already letting contracts to closed incinerators to become involved in the scheme. We have other options to pursue to increase capacity, but at the moment no consideration is given to open air incineration.

My noble friend Lord Stanley also asked about the price he will be getting for his cattle after 31st October. While on 1st November he will continue to get a top-up for his clean beef and his bullocks and heifers, on 2nd November the top-up ends, as was always intended. That is based on the advice given to us by agricultural advisers north and south of the Border that farmers with six months' notice could with most herds achieve changes in their feeding patterns to ensure that they achieved a market weight under 30 months.

The drop in the basic rate from 1 ecu to 0.9 of an ecu reflects a number of issues. I would encourage all noble Lords who felt that was disappointing to think about two or three simple factors. First, the rate that is paid is meant to reflect the market that exists beyond the scheme. Otherwise, the scheme begins to distort the market. It can encourage farmers to grow cattle for the scheme itself. It can also begin to induce a movement of cattle into the United Kingdom—perhaps from the Republic of Ireland or from other places—because we are offering a compensation which is more than the market is offering. It was important that we avoided a distortion that had crept in. Secondly, it is important that the money that is available to help the beef industry is targeted as much as possible at the survival of the beef industry.

The cattle coming to the 30-month scheme serve a useful purpose in terms of consumer confidence and supply and demand, but it is important that the compensation that they attract is not above that which is fair within the market at the time. It is more important that the money that is available is used for specifically targeted schemes for the beef industry, which is suffering the most, than that we should over-compensate all those cattle across UK agriculture, be they dairy or beef, which happen to be coming in through the over 30-month scheme.

With the leave of the House, although I realise that I am now over my time limit, I should like to answer one or two more of the questions that have been raised. The noble Lord, Lord Carter, asked about progress with regard to tallow, gelatin and semen. Since the Commission decision lifting the ban on exports of gelatin and tallow made from UK raw materials was published, new scientific evidence has cast doubt on the conditions set out for the production of gelatin. However, manufacturers may continue to produce and export gelatin for those uses if it is made from imported raw materials. On tallow, legislation will be introduced soon which will implement the requirements of the decision. On semen, where the ban on exports was totally unjustified from the beginning, although the export markets are now open to us again, it is taking time to regain our lost markets.

The noble Lord, Lord Carter, asked about new money versus old money. It would take too long to mention all the schemes, but they all involve new money. A recent announcement stated that this autumn the first instalment of suckler cow premia and beef special premia will be paid at a rate of 80 per cent. instead of 60 per cent. We recognise that that helps the cash flow of many farmers and that a good cash flow can mean the difference between survival and otherwise.

I was surprised when the noble Lord, Lord Carter, asked why there had been such a delay with regard to cold storage. Cold storage has been available from an early date. Some cold storage facilities can be identified and accessed quickly because the construction and location are right and because they are empty. Other cold storage facilities have to be emptied of their existing contents and there needs to be negotiation. We are converting the government grain stores, but that involves a few months of building work. Within the next two weeks additional cold storage facilities coming on stream will provide extra capacity for about 118,000 carcasses. That gives some idea of the effort that has been made over many months to set up a continuous stream of new storage facilities.

I turn now to the restriction orders. The Florence criteria envisaged an accelerated slaughter programme which would simultaneously increase the already dramatic decline in the incidence of BSE, improve public confidence and answer some of the questions relating to animal health and public food safety. During the Florence negotiations, restricting animals on farms was not regarded as a factor of sufficient significance. Therefore, that matter is in the pending tray at the moment but, as all noble Lords know, not all the details of the BSE saga have remained unchanged. Issues such as restriction orders may well be back on the agenda at a later stage.

I turn now to the subject of BSE in pets. I regret the fact that the Independent ran such an alarmist article without getting its facts right. Indeed, I encourage members of the press to ponder their own actions throughout the BSE crisis and to work out to what extent they might have contributed to the sharp decline in consumer confidence in the initial phases through seeking headlines rather than prudent facts. Only material derived from non-specified bovine materials from animals under 30 months of age is permitted to be used in pet foods. Therefore, there is no chance of the sort of threat arising on which the Independent commented this morning. I understand that the Chief Veterinary Officer telephoned Mr. Jones this morning to try to explain the position. He left a message, but Mr. Jones failed to ring him back.

My noble friend Lord Dixon-Smith asked about casualties. We take casualties seriously and it is increasingly our practice to make sure that the slaughter houses involved in the 30-month scheme are obliged to accept casualties as part of their continuing involvement in that scheme.

A number of noble Lords referred to the export market and asked how it might re-emerge. The 30-month scheme anticipates that we shall regain our export markets as a result of hard evidence and criteria and that that will happen on a phased basis. That confirms some of the sentiments expressed tonight by noble Lords. The Government maintain that the regional basis, about which the press have speculated, is not a sustainable or justifiable way of dealing with the matter.

Indeed, the Florence framework recognised that certified herds would be the way in which the ban would begin to be lifted. Therefore, I can reassure my noble friend Lord Dixon-Smith and others that we are seeking to re-establish our export markets as quickly as possible, that that will happen on a phased basis and by lifting the ban according to herds rather than by means of a less defensible regionally-based scheme. However, many of your Lordships will recognise that the criteria that will be agreed are likely initially to suit some parts of our beef industry better than others.

My noble friend Lord Dixon-Smith also mentioned advance payments for the dairy herd. We have had a scheme for advance payments which was really aimed at the beef industry, which has been the hardest hit. We recognise that beef is an important by-product of the dairy industry, but it must be admitted that the dairy industry has a continuing cash flow from dairy produce. If and when a further advance payment scheme is introduced, we shall take that factor into account.

I hope that I have covered a good proportion of the points raised. I am grateful that all noble Lords have spoken from their own experience and knowledge. I am thinking particularly of the noble Lord, Lord Granchester, who is a substantial and famous dairy farmer. I welcome him to his new seat in the House. I did not see him there when he last spoke on this subject.

I apologise for taking some time to cover these points, but I hope that my response will have answered some of the questions which noble Lords have raised.

Perhaps I may conclude by advising the noble Lord, Lord Carter, that he must have a very short memory indeed if he thinks that non-co-operation was a failure. The noble Lord and others have given us some history tonight, so I shall do likewise. On 20th March, the announcement was made that the experts at SEAC had established a likely but unproven link between the two diseases. As experts in the subject, they felt that there was a possibility of a link and, as we have always said that we shall protect the public from theoretical risk as well as proven risk, we took that information seriously. Two months later our colleagues in Europe were continuing to ignore the science which we were able to present, the common sense and the other reassurances that we were able to demonstrate. Europe was also ignoring the World Health Organisation and the International Veterinary Organisation. Indeed, the Commission itself was inclined to agree with the science that we presented in our own defence. After eight weeks of receiving very little co-operation, we introduced a policy which was designed to make Europe concentrate on the strength of our case. We wanted to achieve the terms of the Florence agreement. It took just four weeks to do so. Those terms were agreed on 20th June. It was an extremely successful policy.

I return onshore, to the domestic dimension to this crisis. Government initiatives are important and vital. We have provided funds to the tune of £2.5 billion to help the industry survive. I repeat that at the end of the day consumer confidence in beef is the more important factor. Therefore, a considerable amount of that money is aimed at the consumer and to ensure we have a beef industry in future which sustains the jobs we know it can.

We have throughout worked extremely closely with the industry. We have sought to consult and achieve a consensus whenever and wherever possible. That is the theme of our approach in continuing to tackle this crisis. I assure the House that we will not rest for a minute in responding to the problem. The beef industry in the United Kingdom is a great one. We are determined to maintain our commitment to the industry and the jobs that rely upon it. I say to all noble Lords who have spoken that perhaps the grievances some of them feel they have are based on misconceptions about the extent to which we are working to put things right and working in partnership with the industry who deserve to have everything put right.

Lord Carter

My Lords, I apologise to the Minister and the House for forgetting to declare at the beginning of the debate my interest as a farmer. I should like to put a question to the Minister. He said that the Government intended to move ahead with proposals for a selective cull in consultation with the Commission. Can he give me any idea of the timetable involved?

The Earl of Lindsay

My Lords, how long is a negotiation? We must make sure that the implications of the new scientific evidence and data are properly understood both by our own scientific community and the Commission's scientific community. I cannot speculate on exactly when any conclusions will be reached.