§ Mr. Lathamasked the Minister of Agriculture, Fisheries and Food whether he will explain in detail how the proposed charge of £90 is arrived at for a single visit by a dairy inspector; and what representations he has received from the Milk Marketing Board on this matter.
§ Mr. Gummer[pursuant to his reply, 19 November 1986, c. 252]: The object of charging for milk and dairies work 348W is to cover all the costs which the Ministry incurs in administering the milk and dairies regulations. These costs currently total approximately £2.2 million a year.
The proposed charge of £90 therefore covers more than the cost of the actual farm visit. It covers the dairy husbandry officer's travelling time, the cost of travel arid time spent on preparatory and follow-up work in the office. It also covers indirect costs such as the significant time which the Ministry's administrative and clerical staff devote to this work, postal and telephone costs, and an appropriate proportion of accommodation costs and other overheads. Because there will be no charge for short follow-up visits the costs associated with these visits are also included in the proposed charge for a routine visit. All these costs have been carefully calculated and there is no intention either to operate at a profit to the Ministry or to cross-subsidise other Ministry services.
So far as individual producers are concerned, it should be noted that wholesale producers are visited once every two years on average, so £90 a visit is equivalent to £45 a year on average. Wholesale producers who maintain high standards of compliance with the regulations are visited about once every three years or less frequently, and for them the proposed charge is equivalent to £30 a year or less. The charge will not be subject to VAT and will be allowable against income and corporation tax.
The Milk Marketing Board has made representations about the proposed charge of £90 and my officials have explained how it is calculated.