Orders of the Day — BSE

– in the House of Commons at 9:50 pm on 22nd May 1997.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]

10 pm

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

I am glad to have this opportunity of an early debate on the BSE crisis. I congratulate the Minister, who has already been in action responding to a debate, on his appointment. He represents an urban constituency, and may not recently have had to deal at first hand with agricultural issues on behalf of his constituents. However, he is fair-minded and intelligent, and the lack of farms in Perry Barr should in no way prevent him from being an effective Minister in the Ministry of Agriculture, Fisheries and Food.

I am sure that the Minister does not need me to tell him that the dominating issue in his in-tray is the crisis in the beef industry arising from the continuing export ban. My constituency has almost certainly the biggest concentration of beef producer interests in the United Kingdom. Apart from specialist beef production on farms, there are three abattoirs, two cattle marts, a wide variety of meat processors, specialist transport companies and other ancillary trades. My newly elected hon. Friend the Member for West Aberdeenshire and Kincardine (Sir R. Smith) has similar concerns for the industry in his constituency, which directly adjoins mine.

Some people have made money out of the crisis and from the substantial amounts of financial support that have been injected into managing the problem. The trouble is that others have suffered substantial losses, and many have received no compensation whatever. The Minister will appreciate that there is deep and widespread anxiety about the future. There is also anger in some quarters about the fact that people have been left to struggle on alone.

Beef finishers are currently losing money. They face prices that are at 1982 levels, and many are selling cattle for less than the price at which they bought them in. That is clearly unsustainable. If the situation continues for much longer, it will bode ill for the autumn cattle sales and the future of hill farmers, who depend on them for their very existence.

Against that background, it is hardly surprising that there is widespread anger at the scale of foreign imports from sources that do not have the UK's rigorous safety controls, which only last week were acknowledged by the European Commission as providing the highest standards anywhere.

The latest figures that I have obtained show that, for January and February, imports totalled 19,770 tonnes, which is 47 per cent. more than for the same period last year. The largest proportion of those imports came from the Irish Republic, but a great deal also came from non-EU countries, and especially south America. None of those countries applies the rigorous standards that are now required in British abattoirs.

Photo of Robert Smith Robert Smith Liberal Democrat, West Aberdeenshire and Kincardine

I thank my hon. Friend for associating the concerns in his constituency with those in mine. Several farmers came to my last surgery and raised the worry of the lack of a level playing field in the context of imported and domestic beef. At Prime Minister's Question Time, my hon. Friend the Member for Orkney and Shetland (Mr. Wallace), who is the leader of the Liberal Democrats in Scotland, raised that issue, but he did not get an answer. I hope that, at the end of this debate, we shall get a satisfactory reply.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

It is a matter which, as I am sure the Minister is already aware, causes a great deal of emotional heat.

I welcome the Government's announcement that they will close down abattoirs which do not meet the required standards. That is further evidence of their determination to eliminate any risk of contaminated meat entering the food chain.

At the same time as we have introduced high standards, the incidence of BSE in farms in the United Kingdom has fallen rapidly. Last year's total was slightly more than 20 per cent. of the total in the peak year of 1992. This year, the total has fallen sharply, to less than 5 per cent. of the worst year on an annualised rate. Particularly welcome to me is the fall in Scotland, which seems likely to have well below 100 cases this year, compared with the peak of 2,208 in 1993.

The fall in the incidence of BSE has taken place at a time of worrying signs that the number of cases occurring outside the United Kingdom may be on the increase. I note that the Minister told Farmers Weekly that, to insist that other EU member states applied British controls and banned imports that did not meet the same standards might be counter-productive. I understand that argument, but he must recognise that British producers cannot expect to be left in the maelstrom of collapsed prices and soaring imports without direct assistance or a timetable for the lifting of the export ban.

It is not tenable for the EU to talk of a single European market and a common agricultural policy when one large member state is effectively excluded from both. I know that that is uncomfortable to many who work at the European Commission, and we must help to secure the framework for lifting the ban, and help our beef producers to stay in business in the mean time.

In the 14 months since the ban was imposed, an enormous amount of time and momentum has been wasted or lost. I certainly do not blame the Minister for that. The selective cull, delayed six months, is still barely under way. We must complete it on terms compatible with the Florence agreement as quickly as possible. I know that the Minister agrees with that.

If the certified herd scheme is to go ahead, it must be on terms that are not prejudicial to Great Britain producers. If we had set in motion a computerised database at the start of the crisis, we would be well on the way to achieving the full traceability scheme that the industry wants. The only way to recover that waste of time seems to be to set a cut-off birth date, after which cattle will be eligible for export. I am pleased to note that the Government are considering that.

The measures that I have mentioned are essential to bring forward the earliest date on which the ban may be lifted, and make it possible to announce the dates soon. Nothing less than the lifting of the ban will restore full confidence by establishing a genuine open market; but meanwhile, a number of measures are necessary to provide short-term support before too many producers are swept away, or forced to abandon beef, with consequences for other sectors. Falling grain prices show that farmers who have the option to switch from stock to arable may not necessarily improve their situation by so doing.

Farmers in my area tell me that the priority for any additional money should be promotion of the quality and safety of British beef in general, and of Scottish beef in particular. That should be reinforced by a "Buy British" campaign, starting with the Government. I find it astonishing that the Ministry of Defence continues to import South American beef when we have a surplus of premium quality beef at home. All other major beef users, including McDonald's and Burger King, must be encouraged to buy British beef, which goes through more rigorous safety controls than the imported beef that they prefer.

The Government should reinforce such a campaign by encouraging a labelling scheme to enable consumers to know the origin of the beef they are buying. Perhaps the Government should also consider a voucher scheme such as we have had before to promote beef consumption among lower income groups who currently cannot afford it.

The tendency of British beef farmers to producer heavier and fatter cattle disadvantages us on intervention buying. The 360 kg cut-off is unfair to Britain and Ireland and the restriction to class 3 disadvantages Scottish producers, who have a higher proportion of class 4L beef—about 50 per cent. of the total. We obtained a dispensation on that last year, and I ask the Minister to press for a repeat as a matter of urgency, because the peak sales time is now, and farms face the double whammy of depressed prices and exclusion from intervention.

It has also been suggested to me that the intervention policy should be more imaginative. Buying into intervention some of the cheaper cuts, not just the best, might help to reduce the retail price of the best cuts and so boost consumer demand. Let us not forget all those forequarters that we do not know what to do with.

A number of other measures should be considered. The second payment for the beef special premium scheme is scheduled too late. Could it not be paid at slaughter, or brought forward to perhaps 18 months? The previous Government initiated the cut in compensation payments for over-30-month-scheme cattle from 1 ecu to 0.9 ecu, but they did so when the price for a cast cow was between £800 and £1,000, and not the prevailing price of £400. Will the Government press for its restoration?

Farmers have suffered all those difficulties and the added problem of a rising pound. Ireland has sought compensation for the green pound effect with payments of £91 million and £26 million. Should not the British Government follow a similar route?

Of course, those are all palliatives to make up for the impact of the ban. The only way in which confidence will be restored is when the ban is lifted. That must be the Government's overriding priority.

I have talked almost entirely about farmers, but other sectors of the beef trade have been hard hit. Their plight should not continue to be overlooked by this Government as it was by the previous one.

Specialist producers have been devastated. The company Donald Russell in my constituency supplies literally the best beef that one can buy anywhere in the world. That is not just my view, but it was its customers' view until the ban was imposed. It was almost entirely export-oriented, and its market disappeared overnight. That superb producer of quality meat is only ticking over now, on much reduced turnover and margins. That company and others deserve compensation for stock losses, and they should be given the opportunity to get back into the market.

Head deboners were closed down on Government orders, issued overnight by fax, after they had been required to make considerable investment in new equipment to meet Government safety standards. Surely they should be compensated at least for the investment that they had to make on Government instruction. That investment was mostly financed by borrowing that could never be serviced once those firms were closed down by the same Government.

Specialist transport contractors are still hurting. They were deprived of their principal activity of taking beef to continental Europe, and many suffered immediate losses. They and others were forced to sell expensive rigs at a loss, and were unable to diversify in an increasingly competitive market. Many drivers have been laid off, and some companies have gone bust.

The Federation of Small Businesses in Scotland has carried out a survey of hauliers in Scotland, which showed that there has been an average 42 per cent. drop in trade since the ban. The federation has pointed out that that drop ranges from 10 per cent. to 100 per cent. I do not need to tell the Minister that 100 per cent. means that someone ain't in business any more.

I have talked to a number of hauliers, not only in my constituency but elsewhere. They are so angry that they are considering organising land blockades of major roads to draw attention to their plight. I hope that the Minister will appreciate that I have urged them to give the Government a chance to listen, and I hope to respond to their plight before they take any precipitate action. I urge the Government to consider some avenue of compensation at least for the loss of their expensive specialist equipment.

I know that the Minister may say that I have offered a long list of the measures that could help. In my original draft speech, I mentioned that £1,000 million had already been spent on compensation. I see from the Minister's letter, which was circulated to Members today, that £1,500 million has already been spent on compensation and intervention. Billions more pounds have been committed. Given those figures, it is clear that some people have done extremely well. To me that proves that it is an ill wind that blows nobody any good.

I urge the Minister to consider a review of how the money is spent in future, so that he might be able to provide compensation to people who have had none—without any extra cost to the taxpayer—by reassessing the way it is calculated, so that it is fairer and based on a assessment of real need and actual loss. I am sure that the hon. Gentleman will understand how angry people feel when they see their businesses disappearing under them, while other people make a fortune at the taxpayers' expense and through no particular merit of their own.

An early lifting of the ban is the overriding priority, and a firm date for that is essential. I understand the Government's determination to secure that end by engaging in constructive dialogue with our European partners on the Commission. I assure the Minister that in that venture he will have full co-operation and support from these Benches. Indeed, we are well aware that many people on the Commission are as anxious as we are that the matter is resolved. What they have not had is any constructive initiative from the British Government over the past 14 months. A new Government and a new Minister have an opportunity to turn the matter around.

In the meantime, I hope that the Minister understands that at least some of the measures that I have outlined must be put in place soon, or there will be no significant beef industry left. The quality product that my constituency produces—and I do not exaggerate—may never return to the best plates on the best tables in the world.

Photo of Mr Jeff Rooker Mr Jeff Rooker Minister of State, Ministry of Agriculture, Fisheries and Food, Minister of State (Ministry of Agriculture, Fisheries and Food) 10:16 pm, 22nd May 1997

I congratulate the hon. Member for Gordon (Mr. Bruce) on securing this debate. Within a few hours of my appointment and my walking into the Department, I told my advisers that, when the House reassembled, BSE would be a top priority. Given the Adjournment debate prospects both on Wednesday mornings and at other times during the week, I would have been astonished if there had not been a brief debate on BSE.

I also congratulate the hon. Gentleman on a measured speech. If I cannot respond now to all the points he made, I shall do my best to cover them in correspondence.

I thank him sincerely for his kind remarks about me. It is true that I do not have an agricultural background, and that my constituents are not exactly versed in the ways of agriculture. However, everyone is a consumer. One does not need to be an expert in agricultural technology and procedures to understand that there has been a massive crisis of confidence in British food, not just beef.

That has had catastrophic implications for job prospects for many people who would not usually be associated with enterprise, including lorry drivers and shopkeepers. Therefore, I make no apology—nor does my right hon. Friend the Minister—for Members of Parliament who represent urban constituencies taking a broader view. Their constituency interests are the same as those of everyone else—safer food for all our people, and a restoration of confidence in our food production system.

As the hon. Gentleman mentioned—it shows how efficient the system is—my right hon. Friend the Minister has today written to all right hon. and hon. Members telling them about our plans for BSE. It was important to do that, as we are about to start a short recess. I am pleased to have this opportunity to emphasise some of the points made by my right hon. Friend. I shall come in a minute to aspects of the ban mentioned by the hon. Member for Gordon.

The BSE inheritance is not a happy one. We inherited concerns about public health, a loss of confidence in beef, lingering animal health problems, a battered British beef industry, stores stacked high with cattle remains, a colossal bill for the taxpayer—which is rising daily—and antagonised, deeply suspicious, European partners. There are also a great many angry farmers. If I were a farmer, I would be angry, too.

We also inherited Administration failures. The previous Administration failed to enforce the rules properly, such as the offal controls in abattoirs to protect the public, and the controls on animal feed to eradicate BSE. They had a failed policy of non-co-operation in Europe. That did not bring any benefits to this country. They failed to deliver on their promise to get the beef ban lifted by last November.

The previous Government failed to get cracking with the selective cull. I was astonished at what I found when, within a day of coming to the Ministry, I asked about the figures on what had happened in the six weeks of the general election campaign, when there were still Ministers around who could have been asking questions and pressing ahead. The previous Government failed to reassure consumers. We have inherited a catalogue of failure, and much needs to be done.

I can assure the House that we shall do everything in our power to turn things around. We must have a safer food policy. We must make the point that our policing of the beef production system is second to none in Europe. We produce the finest and safest quality beef anywhere in Europe. That point must be repeated to our partners.

We also have to regain the trust of customers—a key way in which we shall do so is to set up a food standards agency. There has to be an independent element to help to restore confidence. We are consulting on that, and we hope to produce a draft Bill this Session for introduction in the next Session. Meanwhile, there is much that we can do to turn matters around.

We shall rebuild bridges across Europe—that process has already been begun by my right hon. Friends in the Cabinet, including my right hon. Friend the Prime Minister. We shall seek to restore hope to a battered industry. We shall work tirelessly to get the export ban lifted, although that will not be done overnight. Our action will consist not of one single measure, but of a range of measures. We shall continue to give more impetus to the selective cull. We shall move rapidly to create a computerised cattle tracking system.

Those are the Government's challenges and priorities. They will be my personal priorities, as well as those of my right hon. and hon. Friends in the Ministry of Agriculture, Fisheries and Food—and for which we shall account to the House.

Photo of Mr Paul Tyler Mr Paul Tyler Liberal Democrat, North Cornwall

I entirely endorse everything that my hon. Friend the Member for Gordon (Mr. Bruce) said, and I echo his congratulations to the Minister on his appointment. We have high hopes for tackling this difficult problem with a fresh brain and a fresh start. In underlining what my hon. Friend said, may I ask the Minister to address the following point about imports? It is not just unfair to British producers to have imports of lower standards into this country: it is unfair to the British consumer, who is being given many products that are not up to the standards on which the Government and the European Commission insist.

Photo of Mr Jeff Rooker Mr Jeff Rooker Minister of State, Ministry of Agriculture, Fisheries and Food, Minister of State (Ministry of Agriculture, Fisheries and Food)

That is clearly the case, and there will be an appropriate moment to reinforce that point.

The incidence of BSE is in strong decline in the United Kingdom today. That is largely attributable to the measures taken in 1988 to ban the feeding of cattle remains back to cattle. But since that time, there have been more than 30,000 cases of BSE in cattle born after that ban, which proves that it was not properly enforced, and that there was a lack of action on the part of the previous Government.

Controls have been progressively tightened since then. We now have a complete ban on the use of meat and bonemeal in any farm animal feed or fertiliser. We shall ensure that existing controls continue to be properly and rigorously enforced.

Scientists predict that BSE will fall to a low level by the year 2001. We intend to ensure that action is taken to eradicate BSE in the United Kingdom as quickly as possible. Meanwhile, we shall apply a high level of precaution in line with the scientific advice available—we shall operate a safety first policy. That is the only way to encourage the return of confidence.

The Government's priority is to ensure the highest standards of food safety. Having received Professor James's report, my right hon. Friend the Prime Minister announced on 8 May—one week after coming to office—the Government's plans to set up a food standards agency. Until then, the handling of food safety matters will remain with the Ministry of Agriculture, Fisheries and Food, which will work in close contact with the Department of Health and the other agricultural Departments in Scotland, Wales and Northern Ireland.

The handling of food safety matters will be on a new and much more open footing. Our watchwords will be openness and accountability to the House and people outside. There will be no secret reports and no secret meetings; we shall disclose everything that comes our way from the scientists and, within the bounds of commercial confidentiality, we shall be as open as we can when answering parliamentary questions.

We shall base our actions on the best scientific advice. We shall continue to look to the independent scientific advisory committee, the Spongiform Encephalopathy Advisory Committee—SEAC—for that advice. The committee meets regularly; it keeps the evidence on BSE and the new variant of CJD under constant review, as well as checking that controls are in place to protect public health. We will act promptly on SEAC recommendations, as and when they come to us—there will be no delay.

I turn now to the export ban on beef and beef products. We intend to press, and are pressing, for the earliest possible lifting of the ban. My right hon. Friend the Minister has spent two days in Europe and Brussels this week meeting not only Commissioners but members of the European Parliament—something our predecessors in office flatly refused to do, thus creating enormous ill will against our country, and undermining the efforts of our industry and the people who work in it to rebuild confidence. We intend to press for the earliest possible lifting of the ban, but it will not be easy, given the position that we have inherited.

The Government do not want to raise false hopes. Since taking office, we have discovered that it was never credible to pretend that the ban could be lifted by November 1996, as the former Prime Minister told the House. When serving as shadow deputy Leader of the House, I was present during nearly all the statements that were made on this subject, and having asked the questions and received answers and advice from inside the Department that we could not necessarily have got while in Opposition, that is what we have discovered.

We intend to respect the Florence agreement—we have no choice about that. We will work constructively with the Commission and other member states on how best to make progress under that agreement. My right hon. Friend the Minister has already initiated action with Commissioners Fischler and Bonino on that matter.

The Florence agreement set out five preconditions for the UK to meet before the ban can be lifted. Action is in hand on all five, and it is being checked on and chased up daily—sometimes hourly. However, delays have occurred with the selective cull, so we are making it a priority to speed up its operation. We have invited the Commissioners to send further missions here if any other issues are causing them concern.

We are also keen to pursue the steps set down in Florence for the progressive lifting of the ban. The Commission knows that we want to press ahead with the export-certified herd scheme, which our predecessors tabled. Mrs. Bonino has been very helpful in arranging for that proposal to be examined by the appropriate European Union scientific committees. Their scrutiny should be completed next month, and we look forward with interest to the outcome.

The Florence agreement also provides a basis for us to table further proposals, and I can assure hon. Members that we are giving active thought to the best way of doing so. Our aim is to maximise the possibilities of an early resumption of exports, to the ultimate benefit of all parts of the United Kingdom. We are the Government of the United Kingdom, and are working to serve all parts of the United Kingdom. We shall therefore table further proposals when we judge it would be fruitful and in the interests of the United Kingdom to do so.

In the meantime, we shall continue to pursue the challenge to the legality of the ban through the European Court of Justice. There is no sense in not pursuing that case, because we do not concede the legality of the ban. I understand that a hearing date has been set for 2 July. In addition, we shall adopt a much more positive and open approach to the European Parliament's temporary committee of inquiry. The committee was, of course, highly critical of the previous Government.

British beef will be exported only when consumers throughout Europe are convinced that it is not only of the highest quality, but as safe as beef from anywhere else in the European Union. We would submit that, because of all the checks and controls that we have implemented, it is safer than beef from anywhere else in the European Union; but, because of the scares based on false premises, we have to reassure our European partners, their consumers and their constituents that that is true.

The Florence agreement, which was heralded with much acclaim last year, provides a framework, but no more. It will clearly require a good deal of hard work to win back the trade. We have made a start on the process, but much remains to be done if we are to repair the damage. We will need to carry the whole House with us on this issue. Real progress depends on restoring confidence in British beef, and that will come about only by allowing measured consideration by experts, not by trying to bludgeon our beef back on to European dinner tables.

Starting a trade war will not help. I understand hon. Members' feelings, and I have received urgent representations about beef imports from producers, supermarkets, burger chains and so on. The position beggars belief, and our farmers and beef producers do not understand how it came into being. However, given the sensitivity of the problem—which, because of the imprecision of the Florence agreement and the position bequeathed by the former Prime Minister, has as much to do with politics as with science—we have no choice but to work within the framework. I hope that we will be able to bring good news to the House soon.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury)

Will the Minister undertake to review the way in which compensation is paid, so as to ensure that those who have got nothing might at least be considered?

Photo of Mr Jeff Rooker Mr Jeff Rooker Minister of State, Ministry of Agriculture, Fisheries and Food, Minister of State (Ministry of Agriculture, Fisheries and Food)

We are reviewing all policy and all actions related to the situation we have inherited. We are giving the House information on figures and our policy objectives within the inherited framework, so that we can carry the whole House with us.

Question put and agreed to.

Adjourned accordingly at half-past Ten o'clock.