School Milk: EU Subsidy Scheme (Hansard, 14 July 1999)

§ The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue)
My Lords, my right honourable friend the Minister raised the subject at the last Agriculture Council where he received considerable support for our view about the value of the current scheme. I have also been working to improve the take-up of the scheme by local authorities and schools.

§ Baroness Miller of Chilthorne Domer
My Lords, I thank the Minister for that encouraging reply. Does he accept that there is much work to be done in encouraging schools to take up the scheme? At a time when one in three children go to school without breakfast—this Government are pressing the issue of poverty—and when dairy farmers are in crisis, does the noble Lord believe that bringing together MAFF, the Department of Health and the Department for Education to consider improvement of the diet of our schoolchildren would be desirable? Cheese and yoghurt are available under the scheme but the Government choose not to take it up. Apples and pears are available under another scheme but are being thrown away. That would link Britain's farming industry with the diet of our schoolchildren. How does the Minister propose to encourage those departments to make use of the scheme so that it can be demonstrated to the European Union to work well?

§ Lord Donoughue
My Lords, I agree with the thrust of the noble Baroness's argument. One of the first initiatives I launched was to bring together those departments to see how we could advance the school milk programme. We have had regular inter-departmental meetings. We have been in touch with the Intervention Board. The Intervention Board has now taken steps to simplify the procedures. It will issue this week a leaflet to all local authorities explaining the benefits of the scheme and the mechanics of it with a simplified claim form. It has also issued a questionnaire to local authorities and schools to discover how the matter can be improved. So we have done a good deal.
At the June Agriculture Council my honourable friend argued strongly against the Commission's proposals to abolish the scheme and was supported, for instance, by Germany, France, I think Spain, Sweden and Austria, so we have the makings of the support of a qualified majority. As a result of the steps we have already taken, the take-up of school milk has risen since we came to power by upwards of 10 per cent whereas in the last three years of the previous administration it declined by 20 per cent. So we have had considerable success. There 331 is now a 25 per cent take-up in schools. It is a good scheme and we are fighting strongly not only to preserve it in Europe but to increase the take-up here.
I agree with the noble Baroness about the fruit. The regime has been amended a little, so fruit such as apples and pears withdrawn from the market can be distributed to good causes—hospitals and so forth—and schools will be included. The distribution of apples to schools will soon begin.

§ Baroness Byford
My Lords, I am sure that noble Lords will be pleased to hear the Minister's response. However, a great deal of work is still to be done. I understand that the subsidy is to be cut by half in September and the whole scheme to be abandoned by July next year. With that in mind, will the Minister consider giving support to such groups as the women's food and farming union which can promote the use of milk within our schools?

§ Lord Donoughue
My Lords, yes, such groups do an excellent job. Indeed, I have met them and they helped me to launch my defence of the scheme. Perhaps I may make it clear that as yet it is a Commission proposal built into the budget. It has not been formally proposed to the Agriculture Council, but when it is we shall strongly resist it and continue to attempt to build up the coalitions, which has been part of our European policy since we took over. We still hope that we shall be able to defeat the proposal.

§ Lord Mackie of Benshie
My Lords, is the Minister aware that while milk is good for children it is now time to consider whether beef on the bone would be better for adults?

§ Lord Donoughue
My Lords, I am sure that the noble Lord is aware that today we are happy to announce that beef exports from Britain will resume. That is another success of the Government's policy. However, as the noble Lord knows, the issue of beef on the bone will shortly arise for consideration and an announcement will be made accordingly.

§ The Countess of Mar
My Lords, what prospects are there for the United Kingdom dairy industry providing milk for schools when the ruling of the Monopolies and Mergers Commission on Milk Marque will make it even less remunerative to farmers to keep dairy herds? My local farmer sold his herd simply because last year he produced more milk than he had ever produced and still managed to make a loss.

§ Lord Donoughue
My Lords, it is true that our dairy industry has serious problems and we do whatever we can to support it. The report of the Monopolies and Mergers Commission into Milk Marque was an independent report and discovered serious abuses of the monopoly position. It made proposals to break up the industry and for interim measures which would diminish the monopoly of uses in selling practices. My right honourable friend the Secretary of State for Industry did 332 not accept the proposals to break up Milk Marque, but has accepted that there should be radical changes in selling practices.
I do not believe that a viable industry should be dependent upon bad monopoly practices. I believe that the industry is good enough to survive without that. It needs to have more and better marketing for more and better dairy products. That is the way of the future.