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Share Options: Tax Treatment

Lord Tebbit asked Her Majesty's Government:

Lord Mackay of Ardbrecknish: The Chancellor of the Exchequer announced on 27 July that the income tax relief on the exercise of approved executive share options would continue to be available to directors and employees where the options were granted before 17 July 1995 or where a written invitation to apply for options was made formally before that date and the options were granted within 30 days of that invitation.

The Economy: Growth

Lord Rankeillour asked Her Majesty's Government:

Lord Mackay of Ardbrecknish: The most comprehensive measure of investment, whole economy gross domestic fixed capital formation, grew by 37 per cent. in real terms between 1974 and 1994.

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EC Budget: Prevention of Fraud

Lord Rankeillour asked Her Majesty's Government:

    How successful the European Commission has been in prosecuting the perpetrators of fraud against the EU budget; and whether they will consider withholding payment to the Commission until the level of fraud is brought down.

Lord Mackay of Ardbrecknish: Criminal prosecution of those who commit fraud against the Community budget is the responsibility of the relevant authorities in the member states. Details of the reported irregularities are given in the Commission's annual report on the fight against fraud in 1994, on which an explanatory memorandum was submitted by HM Treasury on 11 April (Doc 6449/95). In this context, irregularities include all overpayments whether as a result of error, negligence or deliberate fraud.

The UK cannot legally withhold its contributions to the European Community. Member states are legally bound to make contributions to the Community budget in accordance with the Own Resources Decision.

Motability: NAO Investigation

Lord Carter asked Her Majesty's Government:

    Whether the investigation by the National Audit Office of Motability will include all companies, partnerships, and business arrangements associated with Motability.

Lord Mackay of Ardbrecknish: This is a matter for the Comptroller and Auditor General.

Agriculture Council, 17 July

Lord Rankeillour asked Her Majesty's Government:

    What was the outcome of the Agriculture Council held in Luxembourg on 17 July and if he will make a statement.

Lord Lucas: The Council had before it a proposal from the Commission for an increase in the tariff quota for imports of third country bananas to cover consumption in the three new member states. Some member states wished to link this issue to wider changes in the present arrangements, so there was no majority for adopting the proposed increase. The Commission is now likely to increase the quota under its own powers.

The Commission had agreed, as part of the package of decisions at the June Council, to make a proposal authorising the payment of national aid to farmers who have suffered loss as a result of currency depreciation in member states other than their own. The Commissioner presented a proposal on these lines which will now go for technical examination. My right honourable friend the Minister of Agriculture, Fisheries and Food agreed that this measure should be drawn in such a way as to meet only genuine losses properly attributed to excess currency fluctuations.

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My right honourable friend warmly welcomed a statement from the Commissioner that he expected that his promised report on the treatment of calves reared for veal would be available in October. My right honourable friend urged that the Council should consider the report, and appropriate proposals from the Commission, as soon as possible.

During a brief discussion on the rate of set-aside for crops to be harvested in 1996, on which a proposal from the Commission is awaited, my right honourable friend made clear that he would want an undertaking that the Commission would use its powers to manage the cereals market in such a way that livestock producers would not be faced with grain prices above intended support levels.

Denmark presented information about the use of Avoparcin, an animal feed supplement. It was agreed that this material should be assessed as quickly as possible by the appropriate scientific committee. Meanwhile it was established that a majority of member states (Denmark, Germany, Austria, Finland, Sweden, Greece, Netherlands and Luxembourg) opposed the adoption of a Commission proposal to authorise the use of this product in feed for dairy cows in the Community as a whole.

Organophosphorus Sheep Dips

Baroness Turner of Camden asked Her Majesty's Government:

    Whether they have considered the results of Health and Safety Executive Research Report No. 74/1995 on organophosphates in sheep dip, and, if so, what action they propose to take; and

    Whether the Department of the Environment and the Department of Agriculture have both considered the Institute of Occupational Health's Report for the Health and Safety Executive on organophosphates.

Lord Lucas: I refer the noble Baroness to the reply I gave to Lord Lyell on 17 July (Official Report, cols. WA 1 and 2). I can confirm that both the Department of the Environment and Ministry of Agriculture, Fisheries and Food have considered this report.

Nectarines: Withdrawal Payments

Lord Tebbit asked Her Majesty's Government:

    What public interest is served by making illegal the sale of nectarines of a diameter less than 2¼ inches.

Lord Lucas: There is substantial over-production of nectarines in the EU, brought about largely by the intervention (withdrawal) system. The Commission has sought to tackle this to some extent by limiting the size of fruit that can be marketed and thus limiting the cost to EU taxpayers.

In the forthcoming reform of the EC Fresh Fruit and Vegetable Regime, the UK will be pressing for the

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abolition of withdrawal aid. Then, the needs of the market will determine the size of the fruit that is available to the consumer.

Tobacco: EU Subsidy Reductions

Baroness Jeger asked Her Majesty's Government:

    What progress has been made towards reducing European Union subsidies to tobacco growers in member countries; and what is the present amount of such subsidies.

Lord Lucas: In 1992, when the Agriculture Council agreed reforms to the tobacco regime, the Commission estimated that these would reduce expenditure by 25 per cent. by 1997, from 1233 mecu (£873m*) to 903 mecu (£639m*). The reforms are now in place. The major changes were the removal in all but exceptional circumstances of export refunds and intervention, which had accounted for about 5 per cent. of expenditure on tobacco, and the reduction in the volume of tobacco eligible for support by around 18 per cent. The full impact of these changes is not transparent in the 1995 expenditure estimate of 1132 mecu (£906 million**) because of the effect of exchange rate fluctuations and the agrimonetary system in the meantime. The regime is to be reviewed again in 1996.

    * £1 = 1.4131 ecu

    ** £1 = 1.2492 ecu

Lettuce: Control of Nitrate Levels

Lord Pearson of Rannoch asked Her Majesty's Government:

    What is the latest position in those Committees of the European Commission which are considering European legislation which may threaten the survival of the British lettuce growing industry.

Lord Lucas: Discussions on the EU proposals to set limits for nitrate in lettuce have been held in abeyance pending the opinion of the Scientific Committee for Food (SCF) on the toxicology of nitrate. The SCF has very recently reaffirmed its Acceptable Daily Intake for nitrate set in 1990, but it considered that it has insufficient information to judge whether setting maximum limits on nitrate levels in certain vegetables would have significant effect on overall intakes. The SCF is aware that the current survey of dietary nitrate intake in the framework of Scientific Co-operation may provide more information. The UK will be pressing the Commission to await the outcome of this study before it restarts discussions on the proposed regulations.

We continue to oppose the Commission's proposals on the grounds that there is no scientific evidence that they would improve safety of food for the UK consumer. In addition, the proposals would have a very damaging impact on our domestic producers. Most other member states take a different view but we continue to seek to persuade them of the merits of the UK case.

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Sheep Dipping: Airborne Levels of Organophosphates

The Countess of Mar asked Her Majesty's Government:

    Whether they will commission further research into the methods of detecting airborne levels of organophosphates in the aerosol generated during sheep dipping and the extent to which these aerosols are absorbed by humans.

Lord Lucas: As part of a broader investigation into sheep dipping practices, the relative contribution of contamination of the skin and of the inhaled air to the overall exposure of sheep dippers to organophosphates has been assessed in collaborative studies carried out by the Institute of Occupational Medicine (IOM) Edinburgh, and the Health and Safety Executive. The results were published in 1993.

The assessment methods used are well established and have been validated. In a study of sheep dipping being carried out under normal conditions by farmers, no detectable contamination of inhaled air was found whilst skin contamination was considerable. The detection methods for airborne contamination were sensitive enough to detect contamination well below that which is expected to produce harmful effects. In an additional study involving a contractor using a mobile dip, only trace amounts were found (0.035 mg/m 3 ), which were well below the concentration (0.1 mg/m*sup3;) which has been judged to be the safe limit of exposure for 8 hours every day. These studies indicated that inhalation made only a minor contribution to the total exposure to OPs resulting from dipping sheep and that efforts to reduce exposure should be concentrated on measures to prevent the dip from getting on to the skin.

We therefore do not see any need to commission further research.

A scientific summary of the findings and conclusions from these studies has been prepared and I am placing a copy, together with copies of the research reports concerned, in the Library of the House.

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