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Lord Donoughue: My Lords, I agree with the thrust of the noble Baroness's argument. One of the first initiatives I launched was to bring together those departments to see how we could advance the school milk programme. We have had regular inter- departmental meetings. We have been in touch with the Intervention Board. The Intervention Board has now taken steps to simplify the procedures. It will issue this week a leaflet to all local authorities explaining the benefits of the scheme and the mechanics of it with a simplified claim form. It has also issued a questionnaire to local authorities and schools to discover how the matter can be improved. So we have done a good deal.

At the June Agriculture Council my honourable friend argued strongly against the Commission's proposals to abolish the scheme and was supported, for instance, by Germany, France, I think Spain, Sweden and Austria, so we have the makings of the support of a qualified majority. As a result of the steps we have already taken, the take-up of school milk has risen since we came to power by upwards of 10 per cent whereas in the last three years of the previous administration it declined by 20 per cent. So we have had considerable success. There

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is now a 25 per cent take-up in schools. It is a good scheme and we are fighting strongly not only to preserve it in Europe but to increase the take-up here.

I agree with the noble Baroness about the fruit. The regime has been amended a little, so fruit such as apples and pears withdrawn from the market can be distributed to good causes--hospitals and so forth--and schools will be included. The distribution of apples to schools will soon begin.

Baroness Byford: My Lords, I am sure that noble Lords will be pleased to hear the Minister's response. However, a great deal of work is still to be done. I understand that the subsidy is to be cut by half in September and the whole scheme to be abandoned by July next year. With that in mind, will the Minister consider giving support to such groups as the women's food and farming union which can promote the use of milk within our schools?

Lord Donoughue: My Lords, yes, such groups do an excellent job. Indeed, I have met them and they helped me to launch my defence of the scheme. Perhaps I may make it clear that as yet it is a Commission proposal built into the budget. It has not been formally proposed to the Agriculture Council, but when it is we shall strongly resist it and continue to attempt to build up the coalitions, which has been part of our European policy since we took over. We still hope that we shall be able to defeat the proposal.

Lord Mackie of Benshie: My Lords, is the Minister aware that while milk is good for children it is now time to consider whether beef on the bone would be better for adults?

Lord Donoughue: My Lords, I am sure that the noble Lord is aware that today we are happy to announce that beef exports from Britain will resume. That is another success of the Government's policy. However, as the noble Lord knows, the issue of beef on the bone will shortly arise for consideration and an announcement will be made accordingly.

The Countess of Mar: My Lords, what prospects are there for the United Kingdom dairy industry providing milk for schools when the ruling of the Monopolies and Mergers Commission on Milk Marque will make it even less remunerative to farmers to keep dairy herds? My local farmer sold his herd simply because last year he produced more milk than he had ever produced and still managed to make a loss.

Lord Donoughue: My Lords, it is true that our dairy industry has serious problems and we do whatever we can to support it. The report of the Monopolies and Mergers Commission into Milk Marque was an independent report and discovered serious abuses of the monopoly position. It made proposals to break up the industry and for interim measures which would diminish the monopoly of uses in selling practices. My right honourable friend the Secretary of State for Industry did

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not accept the proposals to break up Milk Marque, but has accepted that there should be radical changes in selling practices.

I do not believe that a viable industry should be dependent upon bad monopoly practices. I believe that the industry is good enough to survive without that. It needs to have more and better marketing for more and better dairy products. That is the way of the future.

Electricity Trading Arrangements

2.54 p.m.

Lord Ezra asked Her Majesty's Government:

    What progress is being made in the review of electricity trading arrangements.

Lord McIntosh of Haringey: My Lords, the review of the electricity trading arrangements is being led by the DTI and the Office of Gas and Electricity Markets. We expect to publish a consultation document at the end of July which will contain details of the proposed new market. Final proposals will be published in the autumn. Legislation to implement the new trading arrangements will be brought forward as soon as parliamentary time permits.

Lord Ezra: My Lords, I thank the Minister for that Answer. Will he accept that the changes proposed in the electricity market will surpass in their extent and complexity the changes which were introduced during the privatisation of electricity and could therefore affect everyone in this country? Will he further accept that many problems are as yet unresolved; for example, in the case of combined heat and power and renewable energy, in which I declare and interest, the present arrangements would definitely be prejudicial? I know that those matters are under consideration. Has the Minister anything to announce as regards their resolution?

Secondly, and more importantly, will he accept that the new arrangements will require major new computer networks at national system level and at the level of the generating and supply companies? I am sure that he hardly needs to be reminded that the combination of new computer systems at the same time as the introduction of massive new procedures can be a lethal combination. Will the Minister assure the House that, before the arrangements are introduced, the Government will conduct complete cost-benefit and risk analyses, publish them and have them fully debated?

Lord McIntosh of Haringey: My Lords, it almost sounds as though the noble Lord is asking me to delay decisions rather than, as is more common, to speed them up. He is right that the issues are complex. We must look after the security of supply, price transparency, sufficiently liquid markets, the impact on combined heat and power and renewables, and the impact on the non-fossil fuel obligations. All those issues have been considered over recent months and will be considered during the consultation period.

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As regards IT, the noble Lord is again right. It would be most unwise to implement other changes at the same time as devising a new IT system. On the other hand, the IT system that is necessary is basically a trading system, and plenty of examples are already available.

Lord Geddes: My Lords, will the Minister ensure that in the review in question, the whole subject of net metering is investigated in considerable depth, whereby those individuals who currently produce electricity--presently primarily through the use of photovoltaics--are paid the same sum per unit as they pay?

Lord McIntosh of Haringey: My Lords, I understand that that is an additional complication. On the other hand, anyone who seeks to preserve any aspect of the pool operation which we have had for the past nine years, and which was an absurd and perverse result of the way in which privatisation was carried out, needs to think very carefully.

Foxhunting

2.58 p.m.

The Earl of Caithness asked Her Majesty's Government:

    Which Ministers and officials have been in contact with the International Fund for Animal Welfare (IFAW) or the Political Animal Lobby to discuss policy on foxhunting and whether they will publish the memorandum of 21st May 1999 from the Parliamentary Under-Secretary of State at the Home Office, Mr George Howarth, reporting a telephone conversation with the director of IFAW.

The Minister of State, Home Office (Lord Williams of Mostyn): My Lords, as is appropriate and as part of their work, Ministers and officials have met--and will continue to meet--interested parties from all sides of the debate. As has already been made public, officials at 10 Downing Street held a meeting last Tuesday with representatives of the Royal Society for the Prevention of Cruelty to Animals, the League Against Cruel Sports and the International Fund for Animal Welfare. That followed previous meetings with the Countryside Alliance and other interested parties. Foxhunting was among a number of animal welfare issues which were discussed. As the noble Lord will recall, internal working papers on policy matters are not routinely published.

The Earl of Caithness: My Lords, I am grateful to the Minister for going some way towards removing the veil of secrecy on what has been happening within government. Does he agree that the antagonistic policies of the Government towards those in the countryside would be more easily understood if they were rationally driven rather than financially driven?

Lord Williams of Mostyn: My Lords, They are not financially driven at all. If we want to go into financially

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driven policies of the previous government I am happy to spend a few hours doing that. One of the contributions given was by the Political Animal Lobby. That was published in our 1997 accounts. The recent donation has also been made public. That was £100,000. This morning I looked at a copy of the Daily Telegraph dated November 1997 and saw that the same lobby had given the Conservative Party almost £170,000.


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