Orders of the Day — BSE

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

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Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Treasury) 9:50 pm, 22nd May 1997

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.