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Lord Monk Bretton: My Lords, what would happen if a major opportunity occurred? This is a fictional example, but it might occur. If M.D Foods decided to withdraw to Denmark and its enterprise here suddenly came up for sale, and the three successors to Milk Marque had the money to get hold of it--I do not know how they would find the money but let us assume that they did--how would that tie in with the difficulty we have about interpreting the MMC report? I know that the noble Lord cannot say too much about that report. Nevertheless, I hope that these big possibilities

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will be borne in mind, because a big possibility like that would really get co-operative producer processing on the move in this country.

Lord Carter: My Lords, any one of the three groups will now be free to invest in processing if it wishes to do so. In the hypothetical situation which the noble Lord poses of all three getting together again to invest in milk processing, I would imagine that they would have to clear that with the Office of Fair Trading and the MMC before they could indulge in that, because it would reproduce the situation which was frowned on in the MMC report and which led to the break up of milk marketing into the three businesses.

Lord Monk Bretton: My Lords, would two be allowed to do that?

Lord Carter: My Lords, I really cannot answer that question off the top of my head. It would depend on the size of the investment and the share of the market that was involved. But the three new businesses are now clear of any of the constraints that were on Milk Marque under the previous system.

I was about to quote from Poul Christensen. At the special general meeting last week, when the decision was taken by the Milk Marque members, he said:


    "Now is the time to put the past behind us. We must look beyond the traditional division between producer and processor to create a new industry based on partnership, ready to face the global challenges ahead. It is only by working together in large and in market-focused groups that farmers can provide the quality, the service and the value which is needed to flourish".

The future lies very much in the hands of these three new co-operatives and with individual dairy farmers. Perhaps they will invest in processing facilities themselves; perhaps they will seek more strategic alliances with existing processors, which will now be possible for any one of the three but was not previously possible with Milk Marque; or perhaps both those things or some quite different strategy. Whichever avenue they choose, I see no reason why they should not succeed on behalf of their members. I am not suggesting that the milk market will turn around overnight. Of course it will not.

The Government's priority is a thriving dairy industry which can compete on world markets. But we must recognise that, regardless of the position on CAP reform, it seems both desirable and inevitable that the next WTO round will lead to further liberalisation in world trade, which will include the dairy sector. In the coming years we face the prospect of increasing pressure on EU and dairy prices as a result of several factors. We therefore attach considerable importance to the mid-term review of the dairy regime which is due to take place in 2003. But to reform the CAP dairy regime and to phase out milk quotas, which has long been the policy of this Government--and indeed the previous government--we will need to achieve substantial support from the Commission and from our European partners.

The Duke of Montrose: My Lords, I understand that in the view of the NFU of Scotland the way these new

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Milk Marque businesses will avoid regulation is by commanding only 25 per cent of the production of milk in the country. When one hears the evidence produced by my noble friend Lord Monk Bretton about the size and the control of milk industries in other countries, one wonders whether they will be able to compete on an international scale.

Lord Carter: My Lords, that is a fair point. I am not quite sure from where the figure of 25 per cent comes. They cannot each have 25 per cent because at the moment Milk Marque in total is 37 per cent. They will be smaller businesses. They will be able to invest in processing. I suspect that they will be faster on their feet. Only time will tell. I know there is a view that one needs to be extremely large to succeed in this field, but there are some smaller organisations throughout Europe which are extremely successful in this field. We shall have to see how the market works out.

We have the basis for a dairy industry where at least some of the uncertainty which has existed for the past couple of years has disappeared and whose producer co-operatives can operate free from detailed monitoring by the Office of Fair Trading. Now that they are no longer in a monopoly position--at least from next April--they are subject essentially to the same general competition rules as the dairy processing companies. I see no reason why these changes should prove to have any long-term adverse effect on milk producers, on the rural economy or on the supply of raw milk.

In conclusion, perhaps I may add my own thanks to the noble Lord, Lord Monk Bretton, and to my noble friend Lord Grantchester. Those of us who over the years have been engaged in the House in agricultural and food subjects form a small and intimate group. We all know each other and we always used to speak in the same debates. I am extremely sad to see them go. I wish them both well in the future.

Business

Lord Carter: My Lords, I beg to move that the House do now adjourn during pleasure until 8 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 6.37 to 8 p.m.]

Lord Carter : My Lords, I understand that there is a good chance that the Welfare Reform and Pensions Bill for which we are waiting will be here within the next 20 minutes. To be on the safe side, I think that the House should adjourn during pleasure until 8.30 p.m. When we resume at 8.30 p.m., if the Bill has been brought from the Commons, I shall then adjourn the House until 9.15 p.m. for the tabling of amendments. I hope that we can begin our consideration of amendments at 9.15 p.m. I beg to move that the House do now adjourn during pleasure until 8.30 p.m.

Moved accordingly, and, on Question, Motion agreed to.

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[The Sitting was suspended from 8.1 to 8.30 p.m.]

Message from the Commons

A Message was brought from the Commons, That they disagree with an amendment proposed by your Lordships in lieu of an amendment to the Welfare Reform and Pensions Bill to which the Commons have disagreed, for which they assign a reason. They insist upon an amendment to the words restored to the Bill by their disagreement to a Lords amendment, to which your Lordships have disagreed, and they disagree to the amendment proposed by your Lordships in lieu thereof, for which the Commons assign a reason; and they disagree to the other amendment proposed by your Lordships to an amendment made by the Commons, the words restored to the Bill by the Commons' disagreement to a Lords amendment, for which they assign a reason.

Lord Carter: My Lords, I beg to move that the House do now adjourn during pleasure until 9.15 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.34 to 9.15 p.m.]

Welfare Reform and Pensions Bill

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I beg to move that the Commons reasons be considered forthwith.

Moved, That the Commons reasons be considered forthwith.--(Baroness Hollis of Heigham.)

On Question, Motion agreed to.

LORDS AMENDMENT IN LIEU OF AN AMENDMENT TO WHICH THE COMMONS HAVE DISAGREED, LORDS AMENDMENT IN LIEU OF A COMMONS AMENDMENT TO THE WORDS RESTORED TO THE BILL BY THE COMMONS' DISAGREEMENT TO ANOTHER LORDS AMENDMENT AND LORDS AMENDMENTS TO A COMMONS AMENDMENT TO THE WORDS RESTORED TO THE BILL BY THE COMMONS' DISAGREEMENT TO ANOTHER LORDS AMENDMENT AND MOTIONS TO BE MOVED ON CONSIDERATION OF COMMONS REASONS
[The page and line refer to HL Bill 62 as first printed for the Lords.]
LORDS AMENDMENT

20After Clause 18, insert the following new clause--
WAR PENSIONS FOR WIDOWS: ENTITLEMENT

(" .--(1) A widow in receipt of a widow's pension under any of the enactments mentioned in subsection (2) ("the DSS pension"), and in receipt of a pension paid under the Armed Forces Pension scheme shall on remarriage or when living together as husband and wife with a member of the opposite sex, only retain the Forces Family Pension (attributable).

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(2) The enactments referred to in subsection (1) are--
(a) the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983, and any order re-enacting the provisions of that order,
(b) the Personal Injuries (Civilians) Scheme 1983, and any subsequent scheme made under the Personal Injuries (Emergency Provisions) Act 1939,
(c) any scheme made under the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939 or the Polish Resettlement Act 1947 applying the provisions of any such order as is referred to in paragraph (a),
(d) the order made under section 1(5) of the Ulster Defence Regiment Act 1969 concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment.").
The Commons disagreed to this amendment for the following reason--
20ABecause it involves charges on public funds, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.
LORDS AMENDMENT IN LIEU

The Lords do not insist on their Amendment No. 20 to which the Commons have disagreed, but do propose the following amendment in lieu thereof--
20BAfter Clause 18, insert the following new clause--
WAR PENSIONS FOR WIDOWS: ENTITLEMENT

(" .--(1) Subject to subsection (2), a widow in receipt of a widow's pension under any of the enactments mentioned in subsection (3) ("the DSS pension") and in receipt of a pension paid under the Armed Forces Pension scheme shall on remarriage or when living together as husband and wife with a member of the opposite sex only retain the Forces Family Pension (attributable).
(2) Subsection (1) does not apply to a widow in receipt of a basic pension under section 44 of the Social Security Contributions and Benefits Act 1992; and a widow in receipt of such a pension who has remarried or is living together as husband and wife with a member of the opposite sex may not retain the Forces Family Pension (attributable).
(3) The enactments referred to in subsection (1) are--
(a) the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983, and any order re-enacting the provisions of that order,
(b) the Personal Injuries (Civilians) Scheme 1983, and any subsequent scheme made under the Personal Injuries (Emergency Provisions) Act 1939,
(c) any scheme made under the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939 or the Polish Resettlement Act 1947 applying the provisions of any such order as is referred to in paragraph (a),
(d) the order made under section 1(5) of the Ulster Defence Regiment Act 1969 concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment.").
FURTHER COMMONS REASON

The Commons disagreed to Amendment No. 20B for the following reason--
20CBecause it involves charges on public funds, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.

Baroness Hollis of Heigham: My Lords, I beg to move that the House do not insist on their Amendment No. 20B to which the Commons have disagreed for their reason numbered 20C.--(Baroness Hollis of Heigham.)

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Moved, That the House do not insist on their Amendment No. 20B to which the Commons have disagreed for their reason numbered 20C.--(Baroness Hollis of Heigham.)


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