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Lord Campbell of Croy: My Lords, I am grateful to my noble friend for confirming that matter. I had tabled

Questions on that subject and that was the information which I had received. Your Lordships may remember the Question because I pointed out that the shark is absolutely harmless and its bask is worse than its bite!

Baroness Trumpington: My Lords, in conclusion I should say to the noble Lord, Lord Butterfield, that of course we are aware of the dangers which surround the future of fish and fisheries. The Government's policy is to promote more efficient and sustainable exploitation of fisheries resources to benefit both the UK industry and the marine environment.

I am most grateful to the noble Lord, Lord Perry, and to the other noble Lords who have spoken in this afternoon's debate. Their contributions, together with the Select Committee's report, will, I am sure, help all those involved in the fishing industry and in managing fish resources to focus more effectively on what is required of them before it is too late, so that we are able to prevent a collapse of stocks near to home, such as happened in the case of the Grand Banks cod stock.

Lord Perry of Walton: My Lords, I too am grateful to all noble Lords who have taken part in this afternoon's debate. I should like to make two brief points. First, I do not withdraw my criticism of the Government's written report that it is both complacent and lacking any sense of urgency. I am delighted to hear the Minister assure me that the Government are not complacent and that they do have a sense of urgency. I shall look for evidence of that fact in the next few months.

Secondly, I suspect that the impact of the risk to the fish stocks of the world will last longer and be of vastly greater importance than the current apparent risk to beef supplies which the House will discuss next. The degree of public awareness of the problems in relation to fish stocks seems to be tiny compared with public awareness of the risks to beef stocks.

On Question, Motion agreed to.

BSE (Agriculture)

5.29 p.m.

The Parliamentary Under-Secretary of State, Scottish Office (The Earl of Lindsay): My Lords, with the leave of the House, I should now like to repeat a Statement which has been made in another place by my right honourable friend the Minister of State for Agriculture, Fisheries and Food. The Statement reads as follows:

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    "I reported on 3rd April extensions in the coverage of beef intervention. On 12th April a further widening of the categories of intervention applicable in the UK and the removal of weight limits were agreed. For the first time, intervention on young bulls will be possible in the United Kingdom.

    "More generally, I am also pursuing with food retailers and manufacturers ideas for quality assurance schemes to help restore confidence in British beef. As a result, I am able to announce that we are urgently proceeding with arrangements to improve animal identification and traceability. I hope to be in a position to introduce a system of mandatory animal passports for this purpose with effect from 1st June. That will make a valuable contribution to the development of marketing strategies by retailers and manufacturers to persuade consumers that our beef is of the highest quality.

    "I believe that these measures taken together, in addition to those we have already announced, will provide the essential support that our beef farming sector needs.

    "So far as manufacturers are concerned, on 12th April I amended the Emergency Control Order to allow imports of beef from animals over 30 months of age produced in certain third countries traditionally supplying the UK in which there is no history of BSE. That was necessary to prevent closures in parts of the meat manufacturing industry that for technical reasons are heavily dependent on imports of older beef. I should emphasise that my decision to lift the ban on imports does not apply to imports from EU countries.

    "I turn now to the slaughtering sector. In my recent Statements, I have informed the House of the additional resources that we are giving to the Meat Hygiene Service to ensure rigorous enforcements of the rules on hygiene in slaughterhouses, in particular on SBOs. We have now received a report from Coopers & Lybrand who were appointed on 4th April to quantify the economic difficulties facing the slaughterhouse sector. I have today placed in the Library of the House a copy of their report, with minor excisions for reasons of commercial confidentiality. Coopers & Lybrand have concluded that there is a substantial "blockage" of unsold meat in the slaughtering sector, valued at some £132 million at pre-crisis price levels, which is undermining the financial viability of many companies to the extent that, in the absence of action, widespread company failures are likely soon. Against this background, I believe that exceptional assistance is justified.

    "I can announce today that I propose to introduce an aid scheme which will inject some £110 million into the slaughtering sector. This will consist of two elements. The first is that all slaughterhouses which continue to slaughter bovines will receive payment based on their throughput of cattle in 1995-96. This payment will be made in two stages, 80 per cent. to be paid immediately and the remaining 20 per cent. in two months' time. This assistance will replace the

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    proposal to relieve slaughterhouses from Meat Hygiene Service red meat inspection charges to which I referred on 3rd April. Assistance will be paid at the rate of around £8.75 for every bovine slaughtered during 1995-96, giving a total of £30 million to be paid under this head.

    "The second is that the Government will introduce arrangements for purchasing and disposal of the blockage, which has already been identified and audited under the supervision of Coopers & Lybrand. The Intervention Board will purchase these stocks at a valuation of 65 per cent. of the pre-crisis market price and will take responsibility for their secure disposal. The board will enter into urgent discussions with the trade associations on the detailed mechanisms.

    "We estimate that the total cost of this second aid will be some £80 million, making £110 million in aid overall.

    "Pending parliamentary approval, which will be sought by way of Supplementary Estimates, necessary expenditure for this and the top-up payment to producers of animals over 30 months old, to which I referred a few moments ago, will be met by repayable advances from the Contingencies Fund.

    "The slaughtering sector was recognised, before the latest crisis, to have substantial over-capacity and Coopers & Lybrand have confirmed that view. Rationalisation is therefore necessary. The substantial package of support that I have announced should, however, provide a breathing space during which companies can adjust to the new market circumstances and make rational decisions about their future operations. Without this support, we risked the disorderly collapse of a sector upon which a secure and efficient beef supply chain crucially depends.

    "I am, of course, aware that there may be other sectors which also have stocks which they cannot bring to market. The support that I have announced today is, however, based on the particular circumstances and the role of the slaughtering sector. The Government do not therefore consider that equivalent assistance should be paid to other sectors. In the interests of public health and market confidence I am, however, asking the Intervention Board to accept responsibility for disposal of unsaleable stocks currently held in the United Kingdom at Government expense, if requested to do so.

    "The waste material, offals and carcass meat resulting from the actions that I am announcing today will be treated primarily by rendering, with the resultant material to be disposed of by the best practicable environmental option. The ways and means of this are being discussed urgently with the industries concerned.

    "This indicates the importance of the rendering industry to the beef chain. I announced previously a temporary subsidy for renderers and first payments will be made this week.

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    "Madam Speaker, the announcements I have made provide a comprehensive system of support for the essential links in the beef chain. They should enable the industries to plan ahead for the future with confidence.

    "However, there are two other aspects on which the House will wish to know the Government's position. I refer to the EC ban on UK exports and the possibility of selective culling to accelerate the decline in incidence of BSE.

    "So far as the ban is concerned, the Government will make every effort to secure its speedy elimination by whatever means are most likely to prove effective, including a legal challenge in the European Court of Justice shortly.

    "So far as selective culling is concerned, my experts are looking carefully at whether a cost effective scheme could be devised. This remains to be seen. However, I should say at once that the picture that some have painted of a mass slaughtering policy involving millions of cattle and a large proportion of the British herd is wholly unreal. The Government have no intention of adopting any such measure which would be altogether unacceptable on many grounds. The models we are looking at involve limited numbers of individual animals--in the low tens of thousands, and not hundreds of thousands, far less the millions which are sometimes described--and do not provide for the slaughter of whole herds.

    "If an acceptable scheme can be devised--that is, one which is likely to reduce the incidence of BSE significantly at acceptable cost--then the Government will consult on the details with all those interested before taking matters forward. So far as implementation is concerned, we would only go ahead if we were satisfied that to do so was to the clear benefit of the UK beef industry; for example, if there was a direct understanding about the lifting of the EC ban.

    "The past few weeks have been a period of great concern for all those who work in the beef industry. As a Member of this House representing a rural constituency, I share the very real anxiety felt by all those who farm and whose livelihoods depend on the beef industry. The extensive package of measures I have announced today should go a long way to reassuring farmers and other essential sectors of the beef industry that they can rely on the full support of the Government in this their hour of need".

My Lords, that concludes the Statement.

5.44 p.m.

Lord Carter: My Lords, I thank the noble Earl for repeating the Statement that was made in another place by his right honourable friend. As always, I declare an interest in that the farming company with which I am involved has dairy cattle and we shall be involved in the cull cow scheme and possibly a selective slaughter scheme if one is produced.

I quote from the Statement,

    "cattle throughput in markets is nearing 60 per cent. of previous levels".

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However, I am sure the Minister is aware that this still represents a substantial problem. We have had a late, cold spring and forage stocks are running out fast. Until the cattle throughput has returned to something like its normal level, there will still be a substantial financial burden on farmers. We are pleased that the calf premium scheme is to start next week. It is slightly ironic that the Government refused to introduce the scheme to stop the export of live calves when that was proposed some time ago but a large number of those exported live calves have now been slaughtered in Holland and in France.

The nationally funded supplement to the basic premium in respect of steers and heifers is obviously welcome. However, I wonder how practical it is to say that this supplement will be payable for six months, and that that will allow producers time to adapt their marketing programmes to the new circumstances. The production of beef is not like an industrial production line. It will take a lot longer than six months for the beef producers to adjust their systems. As I understand the Statement, the top-up will be set at no less than 25p per kilogram--that is, about £125 for a 500 kilogram animal--for the first four weeks that the scheme is in operation. Is the Minister able to give us any idea what will happen after the four weeks? What do the Government think should happen then?

My next point is extremely important. Can the Government explain which Act of Parliament gives them the legal power to introduce the slaughter scheme at all? Is it introduced on grounds of animal health or on grounds of public health? We welcome the exemptions for the specialist breeds as we are all aware of the problem in that regard. It is interesting that the Government are now pursuing the idea of a quality assurance scheme. That was proposed by the Labour Party after the first Statement was made on 20th March. Your Lordships will remember that the idea was comprehensively rubbished by the Prime Minister in the other place. We are glad to see that that idea is now being accepted.

The matter of traceability is extremely important. We are pleased to note that there will be a system of mandatory animal passports. The decision to lift the ban on imports does not apply to imports from the other member states of the European Union. Are the Government confident that they can control the trade of animals which are exported from other member states and are then reimported here from third countries? As regards the slaughtering sector, the Coopers & Lybrand report states that the stocks are valued at some £132 million at pre-crisis price levels and the Government are proposing aid of £110 million. As I understand it, that means that the slaughtering sector is being asked to pick up the tab of £22 million in a short period of time. I wonder whether that will be sufficient to prevent the widespread company failures to which the Government referred.

As regards the Intervention Board arrangements to purchase the stocks which are a part of the blockage, as it were, the Government state that the Intervention Board will purchase these stocks at a valuation of 65 per cent. of the pre-crisis market price and will take responsibility for their secure disposal. Will the Minister

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tell us exactly what that means? What is meant by secure disposal? What is the method that is intended to be used to dispose of these stocks? Are they able to enter the food chain or do they have to be destroyed?

As regards the disposal of the unsaleable stocks which are currently held in the United Kingdom, the Government state that these will be cleared, but have they any idea of the compensation levels that will be paid for the unsaleable stocks? Have the Government any idea of what this will cost? There is also the overwhelming problem of the disposal of the offal from the rendering industry. The Government are considering the best practical environmental options for this. As we all know, the meat and bonemeal industry has been a massive exercise in waste disposal. It would be helpful if the Minister could tell us just what environmental options the Government are considering.

On the question of the legal challenge in the European Court of Justice, we heard this morning that the NFU is proposing to sue the Government and Customs and Excise as a party of the first part, as the lawyers say. Will the Government explain how that action will march with the one which they are proposing in the European Court of Justice? Will they bring the Commission or the Council of Ministers in as a third party or will it be a separate action? How will the two actions march together? On the subject of the ban, the Government have been asked before to give the precise Community authority, by article of treaty, by regulation number or by directive, which gives the European Commission the power to impose the ban. I believe that question has been asked before but I am not sure that it has been answered.

We welcome the fact that whole herds or large numbers of animals will not be slaughtered. As the Statement correctly stated, some have painted a picture of a mass slaughter involving a large proportion of the British herd and that is unreal. I remind the House that that was a remark made by the Minister, Mr. Douglas Hogg, on a television programme on the Sunday after the first Statement was made. It is important that if there is to be a selective slaughter system we should know about it as quickly as possible as the situation is creating uncertainty.

As regards the selective slaughter scheme and the European ban, the Statement states that so far as implementation is concerned, the Government would only go ahead in the context of a clear understanding about the lifting of the EC ban. But which comes first? If your Lordships will excuse the pun, this could be an expensive game of chicken. Can the Minister now give the final cost of this measure to the UK taxpayer after deducting the European contribution from our rebate next year? It is not easy to work that out from the Statement. What will be the final cost to the UK taxpayer when all the various complicated transfers have taken place between this country and Europe? Can he give us any idea of the global figure?

This is four weeks of the worst crisis that any of us can remember in our farming lifetimes. We shall wish to call the Government to account in the debate in the name of my noble friend Lord Richard on the Order

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Paper tomorrow. But at least with this Statement the Government are starting to recognise the magnitude of the problem and are beginning at last to deal with it.

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