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Mr. Michael Fabricant accordingly presented a Bill to recognise the in loco parentis role of schools through amendment of the Ofsted inspection procedures; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday6 November, and to be printed [Bill 227].
ESTIMATES DAY
[Relevant documents: Third report from the Agriculture Committee of Session 1997-98, on the UK Beef Industry, HC 474, and the Government's response thereto, HC 720; second report from the Welsh Affairs Committee of Session 1997-98, on the Present Crisis in the Welsh Livestock Industry, HC 447; The Ministry of Agriculture, Fisheries and Food and the Intervention Board departmental report 1998, Cm. 3904.]
Motion made, and Question proposed,
That a further sum not exceeding £142,691,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges which will come in course of payment during the year ending on 31st March 1999 for expenditure by the Intervention Board--Executive Agency in giving effect in the United Kingdom to the agricultural support provisions of the Common Agricultural Policy of the European Union; other services including BSE emergency measures; and administration.--[Mr. Rooker.]
Mr. Deputy Speaker (Sir Alan Haselhurst):
With this it will be convenient to discuss the following estimate: class IV, vote 2--
Mr. Peter Luff (Mid-Worcestershire): We conduct this debate very much in the shadow of the comprehensive spending review, which at first blush seems to have had a relatively modest impact on the Ministry of Agriculture, Fisheries and Food. The target of reducing the incidence and costs of bovine spongiform encephalopathy may prove to be one of the least demanding facing any Department at present--and I congratulate the Minister of State on that. It also appears that an end to the calf processing aid scheme has been announced, to which we shall need to return later in the debate.
I emphasise that in no sense is this debate a Conservative debate, as some parts of the farming press have suggested. The debate is essentially on two Select
Committee reports, and is very much a House of Commons occasion. I therefore hope that it will not become a debate on MAFF's chapter in the comprehensive spending review. Our most recent debate on common agricultural policy reform was overtaken by a wide range of other issues. The beef industry deserves a debate of its own on the Floor of the House.
The report of the Agriculture Committee, which forms the basis of the debate, perhaps deserves a place in "The Guinness Book of Records", as two of its major recommendations were implemented while it was at the printers. The Government's decisions not to impose the costs of new specified risk material controls and the start-up and first-year running costs of the British cattle movement service were both very welcome and reflected the report's recommendations. However, I hope that the Minister of State will accept that the Government's description of those decisions as
I hope that the debate will be a forward-looking occasion--not an opportunity to allocate blame, but an occasion on which we look for solutions. Perhaps our colleagues on the Welsh Affairs Committee will want to say something about supermarkets. The long-awaited report from Tesco is now out. Many of us might not be totally convinced by it, but I shall leave others to dissect it if they choose. I hope specifically that the debate will not be about the history of BSE. The Phillips inquiry will report at about this time next year. For today's debate, let us start from where we are and not spend too much time worrying about how we got there.
Mr. Huw Edwards (Monmouth):
Why not?
Mr. Luff:
Farmers are genuinely worried and do not want us to play party political games with their future; that is why not. We must look to the future. The Labour party and other parties might want to make the most of the Phillips inquiry in a year's time, but for today let us please concentrate on the real problems facing British farmers.
Farming is in an exceptionally serious state, and our words will be carefully scrutinised by those outside the House. The debate may be about the beef industry, but its problems are very similar to those in the rest of British agriculture. There are many misunderstandings about farmers and farming, which often flow from the misunderstanding between town and country. A Yorkshire farmer was recently prosecuted for depositing slurry on the highway under section 161 of the Highways Act 1980. A motorist skidded on the cowpat and prosecuted the farmer. I am glad to say that, in its wisdom, the court dismissed the case, judging the cow, not the farmer, responsible for depositing the load. I sincerely hope that this debate will reveal a similarly enlightened attitude to the problems of British farming.
Perhaps unusually, this is genuinely an estimates day debate. Even though I have already said that I do not think that we should debate the history of BSE, it is worth offering a pat on the back--
Mr. James Paice (South-East Cambridgeshire):
A cowpat?
Mr. Luff:
MAFF deserves not a cowpat, as my hon. Friend says, but a plain pat on the back for last week's National Audit Office report, "BSE; the cost of a crisis". Whatever the rights and wrongs of the previous Government's policy, the NAO endorsed the quality of its implementation. The House's thanks must go to the officials for that. The report acknowledges the cost to the taxpayer, but on the implementation of the over-30-months scheme, for example, it says that the NAO regards
This debate is about the future, but first I should like to describe some background. The National Farmers Union tells us that average producer prices of beef in pence per kilogram have fallen from 105.5p in 1996 to 89p today. The overall fall in farming incomes last year was about 47 per cent. I am glad to say that beef consumption in the United Kingdom is up by about 7 per cent. on this time last year, but without crucial export markets and given high levels of imports, producers still face great problems.
This debate is not just about farmers' problems. The beef industry is part of a much wider rural and, indeed, urban economy. Beef farmers play a vital part in the social life and the environment of much of the UK. Biodiversity, for example, in less-favoured areas, depends on traditional grazing patterns. An independent consultants' report to the Government on the economic impact of BSE on the UK economy in March said:
Last year, in my county of--as it was then--Hereford and Worcester, the chamber of commerce, the county council, the Rural Development Commission and others demonstrated that 550 companies were ancillary to the beef industry. They were in agricultural services, meat wholesaling, slaughtering, agricultural engineering, road haulage, veterinary surgery and so on. A total of5,200 jobs depended on those companies. At that time, as a result of beef farmers' problems, 56 per cent. of them had lost turnover. Total net losses to the county economy alone were as high as £40 million. At its worst, 260 jobs were lost. Therefore, the debate is about much more than farming.
Beef consumption may have recovered in the UK, but I hope that it is of some concern to the House to learn that, even now, according to the Meat and Livestock Commission, 80 British local education authorities are still banning beef altogether from school meals. Those LEAs include some predictable names, such as Islington and Greenwich. They include rural counties where beef production is important, such as Derbyshire and Oxfordshire. They include major cities, such as Birmingham, which is on the doorstep of both the Minister of State's constituency and mine. They include four Welsh authorities, including Swansea. Apparently, they even include otherwise sensible authorities, such as Wandsworth and Kensington and Chelsea. There is no party political point scoring to be had here.
There is no more justification for continuing those bans than the export ban. British beef is now unequivocally the safest in the world. As a memorable sign along the M5 in Worcestershire proclaimed last week,
There is some concern in the farming community about the fact that the Government, understandably, often represent sums paid out in the wake of the BSE crisis as subsidy to farming. Much of that money is a means of protecting public health as much as protecting farming.
I think of Kites' Nest organic beef farm in my constituency, where not a single beast has contracted or could contract BSE. Yet it is obliged to sell its cull cattle into the over-30-months scheme and collect the so-called subsidy. The farm would be doing a lot better if customers could again buy its splendid organic beefburgers made from the same cull cows. The OTMS payments to that farm and to the many others totally free from BSE are not a subsidy to farming at all--on the contrary, they cost farms money--and the House should be clear about that.
Equally, we should be clear about the fact that farmers, my Committee, the Government, the House--everyone, in fact--would prefer agriculture to be moving towards a truly commercial marketplace. Farmers would rather farm food than subsidy. However, as our report said:
One concern that the Committee highlighted is the failure of successive Governments to pay enough attention to relative competitiveness, and the actions that Government can take in that regard. A Meat and Livestock Commission report on the competitive position of the red meat industry in Great Britain in relation to the
collection, processing and disposal of animal by-products showed an extra £129 million in overall costs compared to the costs of our major EU competitors.
For beef, the total cost was £58 million--£26.73 per animal per year, or 9.2p per kilogram deadweight. That is just one relative cost. Animal welfare and environmental costs come on top, and so do Government charges. The Committee said:
I shall now make some other brief specific points, to which I am sure the House will appreciate as many responses from the Minister as possible. There was much gratitude in the farming industry for what the Minister of Agriculture did in December last year, but now, with the coming of the euro, new proposals are on the table from the Commission for the future of agrimonetary payments.
How will the Government respond to those? What will be their attitude to further requests from the farming industry in general, and the beef industry in particular, for more agri-monetary compensation payments this year? As our report said, in the context of the most welcome22 December support package:
Clearly, the over-30-months scheme should be phased out at some stage. There is no logic in continuing it unamended after 1 February 1999, and it seems to be conspicuous by its absence from the comprehensive spending review. The Government will have to start thinking quite urgently about how a market can be re-established for older cattle, so that we can begin the phasing out of the over-30-months scheme. Beef from cattle older than 30 months is perfectly safe, but I believe that there may be some consumer resistance to that idea. Work needs to be done now, to enable the phasing out to take place.
The Government have recently been consulting on the future of the calf processing aid scheme. It has played an important role in removing surplus male, mainly dairy, calves from the market, but it is an intrinsically unpleasant scheme, and the Committee said that public support for it would probably wane. I think that we would all wish it to go as soon as possible, but probably not quite yet. There must still be a mechanism to keep the beef market in balance at least until the export markets reopen, and probably longer.
"a total saving to the industry of around £70 million"
is a tad disingenuous. In fact, the Government's decision was, very rightly, not to impose £70 million of new costs on the industry.
"these as impressive results in the circumstances".
The report reminds us all:
"The pressure on the Ministry and the Intervention Board at that time to respond quickly and effectively to this catastrophe was intense. There was no precedent for this situation which struck uncertainty and fear into thousands of farmers, hundreds of companies in the trade, and millions of consumers."
Against that background, a small team of officials did an outstanding job. The House should feel able to say, "Well done," to a small Ministry that achieved much against the odds but normally gets more than its share of brickbats.
"In 1995, the beef industry with final sales of £4,100 million created gross added value in the UK economy of around £3,200 million. This represented 0.5 per cent. of the UK's gross domestic product and supported 130,000 jobs."
It is a substantial industry by any standards.
"British beef is safer than sex."
[Laughter.] I would not recommend both at the same time, however.
"Given the impact"
of the strength of sterling
"on subsidies and prices, as well as the continuing problems of the BSE crisis, we think that farmers are right to expect the Government to treat them sympathetically."
We also said:
"the crisis in the beef industry demands a response from the Government which may be in conflict with what would be desirable for the industry in the long-term."
The overwhelming message from my farmers--and, I expect, from the farmers represented by most other hon. Members--is "Lift the export ban and reduce the level of sterling." But there are also many important specific issues to which the Government will have to give responses in the next few months.
"Many of the extra costs faced by the UK industry are not shared by their EU competitors. The Government's inability to supply more than sketchy information on the arrangements made in other Member States, specifically on charges for SRM controls and cattle traceability systems leads us to the conclusion that Ministers cannot have been able to assess the effects on the UK industry's competitiveness of their decisions in respect of those matters. This is of serious concern to us".
In their response to our report, the Government supplied some information on the situation in other EU countries, but it could reasonably be described as still sketchy. Interestingly, Germany was entirely omitted from the list.
"Should circumstances be the same at this time next year, the Government should be sympathetic to the plight of the industry."
On present trends, it looks as if circumstances will be very similar then, so I hope that the Minister will keep his options open on that issue.
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