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Lord Boardman: My Lords, does my noble friend agree that the Government's rejection of the Social Chapter is a fine example of their determination to tackle recurring unemployment?

Lord Henley: My Lords, my noble friend is absolutely right. That is why I am trying to persuade the

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party opposite of the folly of continuing to pursue its policy of signing up to the Social Chapter and, even worse, signing up to a minimum wage, which, as I am sure many members of the party opposite recognise, would lead to a loss of jobs.

Earl Russell: My Lords, the Minister will recollect a report from the CBI, which is now a number of years old, which puts the cost to business of transport congestion in London at £15 billion a year. Do the Government yet have any concrete measures in prospect to reduce those costs?

Lord Henley: My Lords, I do not recall that report and I fail to see what it has to do with the problems of recurring unemployment.

Lord Dormand of Easington: My Lords, is the Minister aware that we on these Benches warmly welcome the reduction in the number of unemployed, which was announced today? Is he further aware that, if he had announced that the figure had been reduced to the level that was in existence at the time the Government came to power 17 years ago, we would have been standing up and cheering? As the Government frequently comment on their success of conquering unemployment, and the Minister has done so today, what does he have to say about the better records of our two large trading countries, America and Japan, and three European Union countries?

Lord Henley: My Lords, I suggest that the noble Lord looks at what our competitors in Europe are doing and looks at their folly in pursuing the Social Chapter and minimum wages, which are leading to a decline in the number of jobs as against the trend in this country. The noble Lord is right to draw attention to the success of the American economy in creating jobs. We must and are trying to emulate that but the party opposite is not trying to do so with its adoration and devotion to introducing a minimum wage. Perhaps I may remind the noble Lord of what was said by the deputy leader of his party some years ago when speaking of the minimum wage. He said:

    "I knew the consequences were that there would be some shakeout. Any silly fool knew that".

Lord Acton: My Lords, is the Minister aware that the rate of unemployment in Japan is 3.4 per cent.? Should not that be the goal of this country?

Lord Henley: My Lords, the noble Lord is absolutely right.

Lord Stoddart of Swindon: My Lords, does the noble Lord recognise that unemployment rose considerably after we joined the ERM and has come down consistently since we left it? Can I have an assurance that under no circumstances will the Chancellor or the Government be bullied into rejoining a revamped ERM or any ERM at all?

Lord Henley: My Lords, the noble Lord points to the changes which have taken place since we left the ERM. The noble Lord should recognise also that the

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Government have pursued other policies which have led to the fall in unemployment; for example, low inflation, low interest rates and a continuing programme of labour market reforms. If the noble Lord could persuade his party of the wisdom of pursuing those policies, I should be most grateful.

Lord Hughes: My Lords, the Minister referred to a five-year low. Will he go further and tell the House the figure for unemployment when this Government took office in 1979?

Lord Henley: My Lords, the noble Lord will be very interested to know that unemployment did rise in the early years of this Government but then fell. It then rose again. However, it is interesting to note that the second peak was lower than the earlier peak. That is the first time that we have seen a fall from one cycle to the next since the early 1960s.

Lord Hughes: My Lords, could I have an answer to my question? What was the unemployment figure when this Government took office?

Lord Henley: My Lords, I do not have that precise figure. The point which I was trying to make--and it is a very valid point--is that for the first time since the 1960s, unemployment peaked at a lower figure.

Lord McCarthy: My Lords, will the noble Lord take it from me that it was 1.3 million?

Lord Skelmersdale: My Lords, are there not two sides to this Question? Should we not explain unemployment in terms of the number of people to be employed? Will my noble friend give those figures in relation to the past few years?

Lord Henley: My Lords, my noble friend is quite right to draw the attention of the House to levels of employment. I assure him that the United Kingdom has some 68 per cent. of its working-age population in employment compared with a European Union average of 59 per cent., while the average for Germany is 65 per cent., for France 59 per cent. and for Italy, 51 per cent. I assure my noble friend that not only is unemployment falling but employment is rising.

Lord Molloy: My Lords, will the Minister bear in mind that when those unemployed people eventually find jobs, they make a contribution to the economy and the fact that they do not have to be paid unemployment benefit must help the Treasury? Will all those points please be considered by the Government?

Lord Henley: My Lords, obviously my right honourable friend the Chancellor of the Exchequer takes those matters into account. However, I am sure that the noble Lord will accept that it is simplistic to think that one can merely spends one's way through those problems and by merely spending more money, create more jobs. Jobs will be created by the right sort of economy.

Baroness Farrington of Ribbleton: My Lords, will the Minister give the House the figures for

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unemployment in percentage terms and in actual terms were the Government still to use the same scale for assessing those matters as was used when they came into office in 1979?

Lord Henley: My Lords, if the noble Baroness is alleging that in some way we have fiddled the figures, I totally reject that allegation. As the noble Baroness will know, there are two counts for the unemployment figures. There is the straightforward count of those out of work and in receipt of benefit; and there is the ILO recognised count, the labour force survey, which comes out quarterly. The noble Baroness will know that those two figures broadly follow each other and provide broadly the same figures. Can we have an assurance from the party opposite as to whether it will be reverting to a different method for counting those figures?


Lord Strathclyde: My Lords, I should like to say a few words about today's debate standing in the name of the noble Lord, Lord Richard. Other than the mover, Front Bench spokesmen and the Minister replying, speakers will be limited to seven minutes. I should remind your Lordships that if any noble Lord were to speak at greater length, he would be doing so at the expense of subsequent speakers in the debate. I might also remind your Lordships that, when the digital clock shows seven minutes, the full seven minutes have elapsed and the speaker is already trespassing on the time of others.

The Beef Industry

3.4 p.m.

Lord Richard rose to call attention to the need for consistent and coherent policies to deal with the crisis in the beef industry to ensure food safety and to protect the interests of consumers; and to move for Papers.

The noble Lord said: My Lords, the exodus of noble Lords from the Chamber is almost as bad as that from beef in recent weeks. The House clearly feels that this is a timely debate in view of the fact that there are no fewer than 43 speakers. It is not only timely, it is also extremely important. My noble friend Lord Carter will deal with the technical aspects of the matter in his winding up speech at the end of the debate. I wish to try to take an overview of the general situation as it has arisen.

It seems to me that there are three issues in this matter which the House and the country should consider: first, the state of the medical evidence; secondly, the Government's handling of the situation; and thirdly, what on earth we should do now.

In relation to the medical evidence, having read many of the papers which have been submitted to me on this matter and doing my best as a non-scientist, it seems to me that the position is fairly clear.

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When the matter first broke on 20th March Mr. Stephen Dorrell, Secretary of State for Health, put the issue as follows:

    "There remains no scientific proof that bovine spongiform encephalopathy can be transmitted to man by beef, but the committee has concluded that the most likely explanation at present is that those cases are linked to exposure to BSE before the introduction of the specified bovine offal ban in 1989".
That was the considered view of the Secretary of State for Health.

Replying to that my honourable friend Ms. Harriet Harman said:

    "We must all be concerned, must we not, that 10 cases of a new strain of CJD have appeared. Will the Secretary of State confirm that what is worrying about this new cluster is that it has occurred in people under the age of 42, and that all the cases have occurred in the past two years and only in the United Kingdom? The conclusion that stares the British public in the face is that there may well be a link between BSE and CJD".
Responding to that, in turn, Mr. Dorrell said:

    "I believe that the hon. Lady's description of the cases that have led to the advisory committee's further revision of its advice is broadly correct".--[Official Report, Commons, 20/3/96; cols. 375-7.]
I do not think that that opinion has been changed since then. I do not wish to weary the House with quotations but, on scientific matters, the words of the Royal Society carry more weight than mine. Indeed in a paper I received yesterday from the Royal Society the issue is put as follows:

    "BSE has been found to infect other species fed on infected material, despite the barriers against prions from one species infecting another. It must therefore be possible that BSE could infect humans. Ten cases of an unusual form of CJD in subjects of no known risk factor have recently been confirmed in the UK, and have rightly given rise to concern that they could be attributed to BSE that has crossed the species barrier".
As I understand it, that is the state of the scientific evidence.

I think it is worth while for a moment to look at the facts about BSE in cattle as we know them. It was first identified in UK cattle by the Central Veterinary Laboratory of MAFF in November 1986. Epidemiological investigations indicated that BSE was caused by the consumption of infected feed, probably due to the inclusion in cattle feed of protein derived from scrapie infected sheep. A ban on the use of ruminant derived protein in cattle feed was introduced in July 1988 to prevent further transmission of the infected agent. Since August 1988 all suspect cases of BSE have been compulsorily slaughtered by Ministry veterinary staff and their carcasses destroyed. At the same time the UK also banned the use of brain, spinal cord, tonsil, larynx, spleen and intestine--known as specified bovine offal (SBO) in food for human consumption. Those are the facts up to that date.

The facts on the handling of BSE are, however, somewhat daunting. The appearance of BSE in cattle appears to stem from changes during the early to mid 1980s in the preparation of protein supplements for cattle feed from rendered sheep and cattle carcasses, including sheep with scrapie, and in the practice of rendering.

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If the House will forgive me, I should like to say a few words about the practice of rendering. Previously the carcasses had been processed to produce tallow, bone meal and animal feed, by the use of solvents to remove the tallow and high temperatures to remove the organic solvents. It appears now that this destroyed the infectious agent (the prion) from scrapie. However, driven by economic factors (a fall in the price of tallow, an increase in solvent and energy costs) and by safety factors (the exposure of workers to solvents) the process was changed to avoid solvents and to avoid the necessity for the high temperatures. The result was that the scrapie prion survived the new process and subsequently infected cattle, creating an apparently new cattle disease, BSE. As I said, I speak as a non-scientist, but I speak with the authority of many scientists and, indeed, of the Royal Society in putting it thus.

Had those high temperatures been maintained, it seems very likely that the infectious agent from scrapie would have been destroyed. Unfortunately, they were not maintained and the infectious agent was not destroyed. What was the result? The result was that the number of cases of BSE in cattle in the United Kingdom rose to no less that 160,000, a figure which is 422 times the number of cases in the whole of the rest of the world. The country with the nearest figure to that of the UK is Switzerland, where there have been just over 200 and in respect of which the infection can be traced to imports of UK cattle feed. Finally, there was the discovery recently of this new cluster of cases of CJD.

On the figures of BSE, I must say that to contend that somehow or other there are masses of concealed cases of BSE in other countries of the world seems to me to be totally fanciful. It would imply--would it not?--that there was a virtual worldwide conspiracy among vets and among public officials to conceal the true nature of the animal diseases which were appearing and to falsify the official record. I find that impossible to accept.

In those circumstances, and against that background, it seems to me to be impossible to contend with certainty that there is no risk. At best the verdict would have to be one of "not proven", and either way the issue resolves itself into the questions of whether that risk is an acceptable one and whether it could have been avoided.

So far as concerns food, there are no objective standards of acceptability. For unacceptability one can have objective standards; indeed, one can ban things that objectively and clearly do people harm. But people cannot be forced to buy one food in preference to another; not even the market--with respect to the other side of the House--can do that. Any question of accepting a risk in food must be a subjective and not an objective one, based as it is on matters of taste, the importance that one attaches to the risk, one's own views as to healthy food and a whole host of other concerns, all of which are essentially personal. The Government's major problem, and the start of the whole crisis, lies in their assessment of the way in which the public and Europe would react to the scientific evidence of that risk. They made a major miscalculation.

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On the same day, March 20th, the Minister for Agriculture, Fisheries and Food, Mr. Douglas Hogg, also made a Statement. Rather touchingly, in retrospect, he said:

    "The market will fall only if there is a serious lace of confidence in beef. That depends upon the judgment that the public make about the quality and safety of British beef and beef products. That is why my right hon. Friend and I have come promptly to the House to make the two statements that we have made and to tell the House that the best opinion that we have is that beef and beef products can be eaten with confidence".
He then went on to say:

    "If the public accept that advice, there will be no damage to the market, but, as I made plain in my statement, there are mechanisms within the common agricultural policy that can be brought into play if there is damage".--[Official Report, Commons, 20/3/96; col. 389.]
Mr. Hogg repeated the essence of that Statement on a number of subsequent occasions. Unfortunately, the public did not accept that advice and the market is in ruins as a result.

Clearly the Government expected plaudits for their frankness, openness and concern for the nation's health. They believed that things would then settle down and we could all go on much as before. That must have been the equation as the Government saw it, and they were clearly wrong. There were no contingency plans; indeed, there was not even a contingency approach, let alone detailed plans to deal with the matter--else why not lay the foundation for those announcements? Why wait until yesterday to announce plans for compensation? Why wait so long to settle the details of a slaughter policy which, up until today, still remains unclear? Why not consult more closely with Brussels in advance? The storm that took place clearly took the Government totally by surprise and, in a manner not totally unknown to this Government, they sought to blame anyone else but themselves. They blamed Europe, they blamed vegetarians and, of course, they blamed the Labour Party. May I say that I am sick and tired of the canard that, somehow or other, the loss of confidence in beef is due to the Labour Party. Responsibility without power is even worse than the other way around and, frankly, I refuse to accept it. The initial reaction of my honourable friend Ms. Harman was characterised by Mr. Dorrell as broadly correct and Mr. Strang's approach, as Mr. Hogg confirmed yesterday in another place, has been consistently helpful.

The fact is that the Government's assessment of public and European reaction was totally and massively wrong. That is where the responsibility for this crisis must lie. There is no way that they can avoid responsibility for their 17 years in office. One can argue--and it is a forceful argument--that the Government should have pursued a slaughter policy earlier on when the disease first appeared. A similar problem faced the Irish. They took slaughter measures and seem to have eradicated the disease. We did not. In retrospect that would have been the sensible policy to have taken here. But even without that, there is, as the House knows, grave disquiet about the extent to which existing regulations have been applied, particularly in the slaughterhouses. Tightening them up now is a bit like shutting the cow-shed door after the cattle have

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gone to market. One thing that the Government should certainly have done was to have paid compensation at the full rate after 1988 and not merely at 50 per cent.

Following those Statements of 20th March, confusion has reigned both here and in Europe. Mr. Hogg assured us that British beef was safe, though how he could give that blanket and certain assurance in the face of those figures and the scientific evidence I frankly do not know. Later he went on television and talked about the slaughter of a large number of cows. The day after he again assured the country that beef was safe and said nothing about slaughter. That was, apparently, after the intervention of the Chancellor of the Exchequer who, not unnaturally, was concerned with the financial implications of a large-scale slaughter policy and, indeed, after the weekend meeting of the scientific advisory group which repeated its earlier opinions and advice.

In the face of all this confusion it is hardly surprising that there was a large-scale exodus from beef eating. The European Union imposed a ban. I am indebted to my noble friend Lord Bruce of Donington for drawing my attention to the precise wording of the directives under which the worldwide ban was apparently imposed. Having read them, I am bound to say that there does seem to be considerable doubt as to the legal basis for the world ban which the Council of Ministers saw fit to impose. I am not sure whether the Government's reaction to that was as vigorous or as sensible as, perhaps, it should have been.

However, Mr. Hogg then went back to Brussels to try to persuade them to lift the ban. He failed and we end up with the worst of all possible worlds: a continuation of the ban and a commitment to slaughter a large number of cattle which the Government still assure us are perfectly safe. That is not exactly a triumph for British diplomacy. But what should they have done? The initial announcements were clearly made under the misapprehension that the scientific assessment of risks would be ignored as so minimal as to be meaningless. They were wrong. Why on earth was the matter not discussed with the Commission in advance of the announcements being made? As I understand it, the Commission was given precisely half an hour's notice. It surely should have been obvious that Brussels was bound to be heavily involved in any consideration of the issue and it would have been far better to have discussed it with Brussels in advance.

Thirdly, the Government should have determined a line on the assessment of risk and on a policy of slaughter and stuck to it. That is where we are now--confusion, and worse, confounded. It raises the inevitable question as to where on earth we go from here. There are three points which I think are crucial.

First, the Government have to take such steps as will lead to the restoration of public confidence. We really should not wrap cows up in the Union Jack as if eating beef was now somehow a patriotic duty. Nor, indeed, is it sufficient for the noble Earl, Lord Lindsay, to suggest, as he did yesterday, that the saga started off on the basis of science but was blown off course by some rather idle comment. As regards idle comment and being blown off

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course, it was a hurricane that hit the Government, not a zephyr. If restoring public confidence involves a selective slaughter policy, I think that most people would accept that. But why a herd of cows bred for beef which has been fed exclusively non-animal feed and which matures in 36 rather than 30 months should be sacrificed to get the Government out of this difficulty is frankly beyond me.

Secondly, whatever the Government do now has to be done in close consultation with Brussels and the member states. Brussels and the member states are not stupid, nor are they particularly malicious but, understandably perhaps, they see that a problem exists. To pretend that it does not in my view worsens, not cures, an already difficult situation.

Thirdly, they must recognise that this self-generated crisis has caused, and is causing, grave financial hardship to thousands of people in our agricultural and associated sectors. Yesterday's announcement--which was welcomed by us--goes some way towards meeting this problem.

Finally, the Government must at last be frank with the British people. The British people are not stupid either but they are confused. The lead given by the Government has been flabby and uncertain and still is. I give one example. How many cows are likely to be slaughtered this year under existing policy? I do not know, nor do I know what government policy on slaughter is. Nor do I have any confidence that it will remain what it is supposed to be after the next meeting of the Council of Ministers in Brussels. The industry clearly does not yet know what it will have to face. This is, I am afraid, a sorry tale of miscalculation and incompetence. I only wish I could see an end to it. I beg to move for Papers.

3.22 p.m.

The Parliamentary Under-Secretary of State, Scottish Office (The Earl of Lindsay): My Lords, the noble Lord the Leader of the Opposition can hardly accuse the Government of failing to be frank with the British people or indeed of being flabby and uncertain after four agriculture Statements to both Houses and after two health Statements. Across those Statements we introduced some 28 measures. We have secured a commitment of rescue funding to the tune of around £1 billion. If the noble Lord opposite fails to understand what some of the measures mean and what the current practices are on culling, I think that is because he has failed to read the Hansard extracts or to listen to the Statements which have been made fully and honestly by Ministers in both Houses.

We understand the anxiety and the frustration that the BSE scare has caused to many people. We understand the irrationality that is driving people mad with concern. They do not understand why hysteria has entered into a subject which should best be left on the scientific basis from where it started. We acknowledge the extreme anxiety that has been caused by hysteria and irrationality. We also acknowledge that no one single measure could possibly provide a complete answer to

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this problem. That is why over the 28 days we have brought forward a large series of targeted and effective measures. If there are other noble Lords, like the noble Lord, Lord Richard, who do not understand all these measures, I hope that my noble friend Lord Lucas, who will have much more time to explain some of the measures, will cover those points where explanation is needed.

Suffice it for me to say that the 28 initiatives which we have brought forward over 28 days are designed to cover public and animal health. Vitally, they are aimed at consumer confidence and at market activity. They provide emergency support for those parts of the beef trade where viability is vital. We want to secure as much of the beef industry as we can and we want to provide as much help to as many parts of that complex and long chain as we can. We know that jobs are at stake and we want to secure those jobs.

Are these measures effective? Unlike the noble Lord, Lord Richard, who described the market as being in ruins, I believe that the measures are effective. The market is picking up strongly now. The domestic market at the consumption end is up to a figure of about 80 per cent., and in some cases is much higher. At the abattoir and processing end, activity is up to a level of about 60 per cent. By the end of this month when the various measures that we have announced are fully implemented--I refer to intervention, to the calf scheme and to the cull cow programme or the residual beef programme--that market activity will increase significantly beyond the current figure of 60 per cent.

There are some slaughterhouses in Scotland where I know for a fact almost the same number of cattle are being slaughtered now as were being slaughtered exactly 12 months ago. Confidence is returning strongly. To hear scaremongering speeches from anyone does not help the restoration of confidence. We have worked throughout this crisis with everyone who is most affected by it. We have worked with farmers and with those in different parts of the slaughter, cutting plant and processing industry. We have spoken to the banks about the measures that they can bring forward to help. We have worked with retailers, wholesalers and consumer organisations. We have also worked hard with Brussels and with our European partners despite what the noble Lord, Lord Richard, implied. We have listened and we have acted. We have a comprehensive commitment to the future of the beef industry.

One of the messages which has come back from the people we have consulted who are most affected by the crisis--beyond the shopping list that they delivered to us and on which we have delivered action--is that they are annoyed at the party politicking that this issue has attracted.

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