House of Commons Hansard Debates for 13 Nov 1996 (pt 6)

10.39 am

Dr. John Reid (Motherwell, North): The number of hon. Members who wish to speak in this debate is testimony to the breadth of support for the case put by the hon. Member for Gosport (Mr. Viggers). I will make my remarks as brief as possible so that other hon. Members can participate.

I have no pecuniary or commercial interest in the matter, and I have no specialised knowledge of it--indeed, I find it difficult to pronounce some of the words associated with this great problem, far less get my mind round them. However, I have two interests in the matter. One, of course, is public health; the other is that I know an injustice when I see one and I believe that there is an injustice in this case.

We need not rehearse what happened on 29 March or before, but I want to make two points, the first of which has been made by everyone. I wrote to the Minister as soon as the injustice of the case was brought to my attention by a company in my constituency, as was the case with other hon. Members. I refer to Wilson Young Ltd., part of the National Products Company in Shotts. I have still not had a satisfactory answer or explanation. Why were companies based in the United Kingdom, even in areas such as Scotland with an extremely low incidence of BSE, prohibited from entering the trade, when the same products could be imported from countries that had instances of BSE, some on a small scale but some on a par with the Scottish experience?

The most important issue is compensation. On 29 March, my constituency firm was hit by a whirlwind. We have heard from my hon. Friends the Members for Glasgow, Springburn (Mr. Martin) and for Midlothian (Mr. Clarke), and from the hon. Member for Gosport, about faxes saying, "Cease trading immediately." That is what happened in my constituency.

The Minister should think again. I am left, as are other hon. Members, with constituents who have complied with every Government regulation, observed the rules as laid down by the Government and the EC and who have invested in machinery specifically for the purpose. Compensation is available for farmers, for market support to help the essential links and supply chains, for abattoirs and for the beef stock transfer scheme, but none of that offers any consolation to people such as our constituents.

Head meats sourced from outside the UK are a sufficient problem, but when there is no compensation at all, their importation adds a gross injustice to an insult to many of our people. In most cases, the debts were incurred neither as a result of investing to speculate and to accumulate nor as a risk taken on the market, but as a direct result of Government instructions and Government regulations. It seems to me that there is a clear distinction between compensation for future trading profits and recompense for debt incurred as a direct result of Government instruction. I plead with the Minister, as other hon. Members have, to rethink the Government's position and to make some recompense to people whose lives were destroyed on 29 March.

10.43 am

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Tony Baldry): I say, first, to my hon. Friend the Member for Salisbury (Mr. Key) that I have no difficulty dealing with the brief from the point

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of view of collective responsibility. Some of my hon. Friends have given the impression that some of the decisions that have been taken are capricious or arbitrary. I hope that my hon. Friends accept that my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food and all the other Agriculture Ministers have taken great care over the issue. Of course we have listened carefully to the representations made to us by my hon. Friend the Member for Gosport (Mr. Viggers), whom I congratulate on introducing this Adjournment debate. He did so very fairly and in full deference to the interests of his constituents. I fully understand his concerns.

We have, of course, looked at the matter time and again over this summer. Our decisions have, as I hope to explain to the House, been by no means capricious or arbitrary. They have been taken with great care, having regard not just to the Government's policies at the moment, but to long-standing, settled public policy and settled UK law.

The debate concerns established principles of compensation. I fully recognise that several issues such as compensation and market support have been raised, and I hope that I can distinguish them for the satisfaction of the House this morning.

The long-standing public policy on compensation is clear. There is a well-established principle in public law for paying compensation for loss of property as a result of Government action. The European convention on human rights requires the payment of compensation where property is expropriated. That principle means, simply stated, that when an individual is deprived of his property, fair compensation for that deprivation, subject to any overriding circumstances in the public interest, is properly due.

Where, under the over-30 months scheme, it has been necessary for cattle to be slaughtered, that is, in effect, the confiscation of property, and compensation flows from that action. Compulsory purchase is an example of compensation for loss of property. It has, however, also been a long-standing matter of settled public policy that no Government are under any obligation to pay compensation to a business for any loss of opportunity of carrying on that business which may arise from Parliament's properly considered legislative decisions.

Mr. Trimble: The Minister talks about compensation for loss of property. Does he accept that that principle should extend to cases where property is rendered valueless as a result of Government action, which is what has happened to the equipment purchased in this case? The Minister referred to the European convention on human rights. Will he give us an assurance that if the action taken under the first protocol is successful, the Government will implement any decision immediately?

Mr. Baldry: There is a considerable distinction in that no property has been expropriated. The case to which I referred in my intervention during the speech of my hon. Friend the Member for Gosport is relevant to this point. As the hon. Member for Gordon (Mr. Bruce) made clear, no one involved in the matter has made any attempt to suggest to the High Court or to any of the courts of the United Kingdom that the Government's actions have been outwith UK law. If people feel that they have a remedy

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elsewhere, such as the European Court of Human Rights, they must investigate that remedy. It would be hypothetical to suggest what may or may not happen.

Mr. Batiste: Will my hon. Friend give way?

Mr. Baldry: I will not give way because there is an important principle to be made clear. I will give way to my hon. Friend if I have time later.

In this case, there has been no confiscation or expropriation of private property. What has happened is not a loss of property. We should be clear that we are talking about the loss of a business. Here the principle is clear. The Government do not compensate for loss of business. That was demonstrated clearly in the case to which my hon. Friend the Member for Gosport referred. Indeed, in many ways, the Skoal case may have been based on stronger grounds than is the head boners' case. As Lord Justice Taylor made clear in his judgment of the case in 1990:

"The applicants challenged by way of judicial review the decision of the Secretary of State for Health . . . to make the Oral Snuff (Safety) Regulations 1989. The Regulations provide that no person shall supply, offer to supply, agree to supply, expose for supply or possess for supply any oral snuff . . .

During 1984, the applicants were looking for a manufacturing and packaging base outside the United States. They discussed with the Department of Trade and Industry and the Industry Department for Scotland the possibility of setting up a factory to market these products in Scotland. They were encouraged by the Government departments to do so and were offered a Government grant by way of incentive. In the result, the applicants built a factory at East Kilbride, near Glasgow, which was opened in 1985. They received £193,357 of Government grant."

The company had been encouraged by Government grant to set up in the United Kingdom.

Mr. Key: Will my hon. Friend give way?

Mr. Baldry: I shall give way when I have finished this point.

The business was closed as a consequence of legislation. The applicants complained to the High Court that they should receive compensation because they had been encouraged to set up the business. On that specific point, Lord Justice Taylor said:

"the decision to ban the applicants' products is tantamount to a breach of contract or a breach of representation and, as such, is an abuse of power. However, a Minister cannot fetter a discretion given him under statute. Provided he acts within his statutory powers, rationally and fairly, he is entitled to change his policy."

Several hon. Members rose--

Mr. Baldry: I shall give way in a moment, but I wish to make my points in some order as it is important to establish the principles relating to these important matters.

In giving judgment, Lord Justice Taylor held

"that it would be absurd to suggest that some moral commitment to a single company should prevail over the national interest"

and that the company's loss of business, though consequential on legislation, did not justify a legal claim for compensation from the Government.

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