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Lord Bowness: My Lords, I am sorry to interrupt the Minister, but will he expand a little on that answer? Part I of the regulations states that,


As I read the regulations, in no way is that qualification removed if the draft documents are used in connection with the making of an executive decision or an individual executive decision.

Lord Whitty: My Lords, even under existing procedures a decision cannot be made on a report that is not a permanent report. The guidance will make that clear. Therefore, one cannot get round the regulations by taking a decision on a draft report and not issuing the draft report in accordance with the "three days" guideline.

The noble Baroness asked me to indicate clearly the status of the guidance to which I have referred and which will elaborate on the regulations. It is guidance to which, in law, councils must have regard. The regulations in a sense set the minimum standards; the guidance builds on that and provides for the approach. The guidance and the regulations cannot contradict each other--which was the other point raised by the noble Baroness. Councils could depart from the guidance only if they could show well reasoned grounds for so doing. That clarifies the relationship. There can be no conflict. Councils must follow the guidance unless they have reasonable grounds for departing from it.

The noble Baroness referred to our debates in July and to what I said about formally delegating powers to an individual member or to an officer for decision. I stand by what I said in July. These regulations will not allow councils to get around a situation by delegating the powers to an individual. The process of delegation cannot get around the requirements for openness where the substantive decision is taken.

I submit that the regulations, taken together with the proposed guidance under the regulations which I have given an indication of tonight, far from creating a new culture of secrecy will restrict greatly some of the circumstances in which secrecy has in the past been achieved and will lay the foundation of a new regime

8 Feb 2001 : Column 1341

of efficiency, transparency and accountability. I commend the regulations as they stand to the House and ask the House to resist attempts to annul them.

Lord Dixon-Smith: My Lords, before the Minister sits down, does he accept that he is in breach of his own pleading for openness? At no time has there been any indication to me or to anyone else on my side of the House that there would ever be any attempt to arrive at a consensus approach to this issue. One might reasonably have thought that if that was the intention it would have happened, but it has not. I regret that. The Minister has said that he will bring forward revisions and guidance. He has not put a time-scale on that action. I cannot say at this stage that I am satisfied with the situation.

Baroness Hamwee: My Lords, I note the comments of the noble Lord, Lord Bowness, who speaks as an ex-leader of a local authority. He knows the right and wrong ways of going about these matters and what is what. His contribution was helpful.

I apologise that I have not been able to talk to the noble Lord, Lord Dixon-Smith, over the course of the past few days--I hope that my Motion is a clear enough indication of how our minds are working--I have been much involved elsewhere, but I certainly did not intend any personal insult to him. He said that my speech supported his arguments. I am delighted to hear that. When I first raised this issue during the course of the Bill by way of an amendment the speakers were my noble friends Lady Miller of Chilthorne Domer and Lord Tope. The Minister replied. There was no speaker from the Conservative Benches. With, I think, six exceptions--I may be wrong--on the Vote at the end of the group the Conservatives stayed in their places and did not vote. I also note that what we have heard from the noble Lord is opposition but no positive proposal.

I thank the Minister for the assurances that he has given tonight. They are real assurances, not just expressions of understanding. We on these Benches want to achieve improvements now. I believe that on the basis of the assurances we shall do so. I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.

Local Authorities (Executive Arrangements) (Access to Information) (England) Regulations 2000

Lord Dixon-Smith: My Lords, we have already had sufficient debate. I beg to move the Motion standing in my name on the Order Paper..

Moved, That an humble Address be presented to Her Majesty praying that the regulations, laid before the House on 19th December 2000, be annulled (S.I. 2000/3272).--(Lord Dixon-Smith.)

8 Feb 2001 : Column 1342

8.14 p.m.

On Question, Whether the said Motion shall be agreed to?

Their Lordships divided: Contents, 63; Not-Contents, 116.

Division No. 1

CONTENTS

Anelay of St Johns, B.
Arran, E.
Astor of Hever, L.
Attlee, E.
Bell, L.
Blackwell, L.
Blatch, B.
Bowness, L.
Brabazon of Tara, L.
Bridgeman, V.
Brougham and Vaux, L.
Burnham, L. [Teller]
Byford, B.
Campbell of Croy, L.
Colwyn, L.
Cope of Berkeley, L.
Craigavon, V.
Crickhowell, L.
Cumberlege, B.
Dixon-Smith, L.
Elles, B.
Elliott of Morpeth, L.
Elton, L.
Fookes, B.
Freeman, L.
Gardner of Parkes, B.
Geddes, L.
Henley, L. [Teller]
Higgins, L.
Hooper, B.
Howe, E.
Hunt of Wirral, L.
Jenkin of Roding, L.
Jopling, L.
Kimball, L.
Knight of Collingtree, B.
Luke, L.
McColl of Dulwich, L.
Mancroft, L.
Marlesford, L.
Miller of Hendon, B.
Montrose, D.
Murton of Lindisfarne, L.
Naseby, L.
Newton of Braintree, L.
Noakes, B.
Northbrook, L.
Norton of Louth, L.
Onslow, E.
Pearson of Rannoch, L.
Pilkington of Oxenford, L.
Plummer of St. Marylebone, L.
Renton, L.
Ryder of Wensum, L.
St John of Fawsley, L.
Seccombe, B.
Selborne, E.
Shaw of Northstead, L.
Stewartby, L.
Strathclyde, L.
Swinfen, L.
Vivian, L.
Willoughby de Broke, L.

NOT-CONTENTS

Acton, L.
Addington, L.
Amos, B.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Avebury, L.
Bach, L.
Barker, B.
Bassam of Brighton, L.
Berkeley, L.
Billingham, B.
Blackstone, B.
Borrie, L.
Bragg, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Carter, L. [Teller]
Chandos, V.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cocks of Hartcliffe, L.
Crawley, B.
Darcy de Knayth, B.
David, B.
Davies of Oldham, L.
Desai, L.
Dholakia, L.
Dubs, L.
Eatwell, L.
Elis-Thomas, L.
Evans of Temple Guiting, L.
Evans of Watford, L.
Ezra, L.
Falconer of Thoroton, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Gale, B.
Gibson of Market Rasen, B.
Gilbert, L.
Goldsmith, L.
Goodhart, L.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grenfell, L.
Hamwee, B.
Harris of Greenwich, L.
Harris of Haringey, L.
Harris of Richmond, B.
Hayman, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Hooson, L.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L. (Lord Chancellor)
Janner of Braunstone, L.
Jay of Paddington, B. (Lord Privy Seal)
Jenkins of Putney, L.
King of West Bromwich, L.
Layard, L.
Lea of Crondall, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L. [Teller]
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Maddock, B.
Massey of Darwen, B.
Mitchell, L.
Morgan, L.
Nicol, B.
Northover, B.
Oakeshott of Seagrove Bay, L.
Parekh, L.
Plant of Highfield, L.
Puttnam, L.
Ramsay of Cartvale, B.
Razzall, L.
Rea, L.
Rendell of Babergh, B.
Rennard, L.
Renwick of Clifton, L.
Rodgers of Quarry Bank, L.
Roper, L.
Sainsbury of Turville, L.
Sawyer, L.
Scotland of Asthal, B.
Scott of Needham Market, B.
Serota, B.
Sharp of Guildford, B.
Simon, V.
Smith of Clifton, L.
Stone of Blackheath, L.
Thomas of Walliswood, B.
Thornton, B.
Tomlinson, L.
Tope, L.
Tordoff, L.
Uddin, B.
Walker of Doncaster, L.
Wallace of Saltaire, L.
Walmsley, B.
Warner, L.
Wedderburn of Charlton, L.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Mostyn, L.
Williamson of Horton, L.

Resolved in the negative, and Motion disagreed to accordingly.

8 Feb 2001 : Column 1343

Slaughterhouses

8.23 p.m.

Lord Willoughby de Broke rose to ask Her Majesty's Government how they expect to implement the recommendations made by the Maclean report concerning the costs of inspection and regulation of slaughterhouses.

The noble Lord said: My Lords, I begin by expressing some sympathy for the Minister who on top of his health portfolio has been landed with responsibility for the Food Standards Agency. He has, therefore, to immerse himself in the history of the slaughterhouse regulations and is responsible for hospitals and slaughterhouses. I only hope that he does not get his files muddled!

I express my thanks to the Government Whips' Office for allowing me to have this debate today. It comes at an opportune moment. The slaughterhouse industry and the Food Standards Agency are in the middle of a consultation period. I hope that this short debate will inform the Government of the industry's concerns about the Food Standards Agency's proposals while there is still time to make the necessary changes before the deadline of 1st April.

This is not a party political issue: it is about getting the matter right. I have no right of reply so I thank all noble Lords who will speak. It is good of them to have stayed this long. I also give the Government credit for having listened to the arguments on this issue, although somewhat late in the day. Powerful arguments have been made over the past two years to

8 Feb 2001 : Column 1344

consider afresh the way in which the slaughterhouse industry has been regulated. I do not propose to revisit the history of the introduction of the Meat Hygiene Service, and so on. Noble Lords who will speak are well seized of those points. I turn to the main issues that we should address.

Last summer the Government commissioned the Maclean taskforce under the chairmanship of Colin Maclean. The key point we must remember is that Maclean (if I may use that shorthand) recommended that slaughterhouses should be charged the lower of either the standard charge or their actual inspection costs where those would be lower. Maclean recommended levying the lowest of all the charges. We must bear that in mind.

Maclean reported in June. In November of last year the Government agreed that they would accept in full the recommendations of the Maclean report. I recognise--as I hope that the Government do--that they have taken on a substantial financial commitment. The industry should be duly thankful that the Government have taken the right decision. It will be a great relief to all those whose lives and jobs would have been affected adversely by possible regulation of the slaughterhouse industry had the Government not taken those arguments on board.

Having said that, it seems somewhat churlish to look this apparent gift horse in the mouth. However, we have serious reservations about the draft proposals of the Food Standards Agency. If they are implemented as proposed in the draft regulations, the measures will have the opposite effect to what the Government intended--that is, to reduce the charges for inspection of small and medium-sized slaughterhouses. The Food Standards Agency seeks powers to impose penal hourly charges on top of the standard charge. That would take us back to the unfortunate situation which threatened the survival of small and medium-sized slaughterhouses before the Government's decision to introduce and underwrite standard charges.

In the draft statutory instrument at Annex A of the consultation document, the Minister will see that sub-paragraph (9) contains the draft of a proposed new paragraph 8A. As it stands, new paragraph 8A is a disaster. Its effect in principle is to allow the Food Standards Agency, or the Meat Hygiene Service which will operate on behalf of the Food Standards Agency, to charge what it likes. For example, heading (a) refers to,


    "higher inspection costs due to a particular lack of uniformity in the animals for slaughter".

That could mean that any animal coming into a small slaughterhouse would be subject to new paragraph 8A. The Meat Hygiene Service operatives could decide that it was a non-standard animal: that it was not part of a group of 20 animals of the same size, shape, breed or colour; and that therefore they would charge more for it. That would nullify the benefits of the proposals which the Government have agreed to in accepting the Maclean report.

8 Feb 2001 : Column 1345

I shall not refer to each heading but new paragraph 8A is completely unacceptable. It would penalise older plants--that comes from 8A(2)(b). Are we going to allow only new plants to operate? It would penalise remote plants--that is a quote from the draft statutory instrument. It would penalise plants operating outside the hours of 6.30 a.m. to 6 p.m.

Above all, 8A(2)(h) is very damaging. It reads:


    "any other reason like those mentioned in paragraphs (a) to (g) above that causes the Agency increased costs".

That is a dangerous catch-all provision, because it would allow the Meat Hygiene Service inspectors to go down to the pub after inspecting a plant, decide that they needed to charge a little more and work out how to do it. That provision gives them the freedom to do whatever they like whenever they like.

I think that the industry accepts--it certainly should accept--that the Meat Hygiene Service should be protected from loss of revenue due to abuse of the system by rogue operators. That is only reasonable, but Maclean provided for that. However, the draft regulation would impose standard charges plus costs. That is not what Maclean recommended. It is also not the recommendation of the committee that I had the honour to chair, commissioned by Honest Food, because it would give the Meat Hygiene Service the unfettered power to charge whatever it wished for its services for whatever reason. Operators would have to accept the subjective judgment of Meat Hygiene Service inspectors.

That proposed power would be compounded by the fact that there is no appeal mechanism. I have a letter from Sir John Krebs, the chairman of the Food Standards Agency, which says that there should be a proper appeal mechanism and that he is going to put one in place. There is no mention of that in the draft regulations.

It is self-evident that any system that has the power that is vested in the Food Standards Agency--the power to deprive people of their livelihoods if they close slaughterhouses--should have an effective and speedy appeals mechanism. I ask the Minister to understand that there are serious concerns about that aspect of the draft statutory instrument.

Time is short. The consultation period ends next Wednesday. The provisions have to be implemented by 1st April this year. The Food Standards Agency is aware of the strong concerns that have been expressed by the industry. It may be sympathetic to them, but I am not sure. I hope that the Minister will reassure the House and the industry that those concerns will be met and a satisfactory solution will be found. We are so close to getting it right after a very long battle that it would be a disaster if we managed to snatch defeat from the jaws of victory at this very late stage.

8.33 p.m.

Baroness Byford: My Lords, it gives me great pleasure to follow my noble friend. I thank him for bringing this crucial issue to the attention of the

8 Feb 2001 : Column 1346

House. He has asked the Government how they expect to implement the recommendations in the Maclean report.

The opening paragraph of that excellent report encapsulates the essence of the European dilemma in three sentences of executive summary. Maclean finds that the present meat inspection regime needs to be replaced and that the Government, vets and meat industry experts agree, along with several member states and a number of senior Commission officials. There is clearly agreement on the issue. He concludes that everyone concerned recognises,


    "that it will take some years to effect the required changes in EU legislation".

The meat inspection regime has been the subject of many and varied debates, discussions and meetings in Westminster and Whitehall. It is of great interest to those involved in meat production. The total man hours spend on that important topic surely deserve greater attention than,


    "some years to effect the required changes".

That is why I welcome the debate.

Back in December 1999, the meat industry red tape working group said:


    "Meat hygiene service charges are punitive and rising out of control"

The Meat and Livestock Commission report concluded that charges in Great Britain were significantly--I emphasise that word--higher than in most other member states. It is clear from recent events over the importing of German beef that some inspection regimes are not efficient enough. The Maclean report notes that, in at least some member states, meat inspection charges are not collected or are otherwise subsidised, possibly contrary to EU rules. I in no way suggest that we should break those rules, but I do not believe that we should impose even greater costs and increases on our hard-pressed abattoirs and producers.

The Government finally recognised that there is a problem. In last November's rural White Paper, they highlighted the fact:


    "We are providing new, additional aid worth 8.7 million in 2001-02 in respect of small and medium-sized abattoirs".

My noble friend referred to that earlier and I, too, welcome it.

If the Government realise that there is a problem, why have they brought forward a draft statutory instrument that, in part, makes no sense? It introduces an imperative with the word, "shall". Paragraph 8A is incomprehensible, muddled and--although I am no authority--appalling English. What does higher costs due to "special travelling times" mean? What does,


    "longer waiting and otherwise non-productive periods"

mean? Longer than what?

Finally there is the catch-all of paragraph 8A(2)(h), which says:


    "any other reason like those mentioned in paragraphs (a) to (g) above that causes the Agency increased costs".

8 Feb 2001 : Column 1347

Why have (a) to (g) when there is the piece de resistance of (h)? I do not mean that flippantly. The Government will have to reconsider 8A, which is a nightmare.

The draft statutory instrument has taken the Government five months since the publication of the Maclean report, which itself was produced in a mere five weeks. As others have said, the report is a model of insight, clarity and common sense. It is seven weeks until the date of implementation, so the Government have plenty of time to rewrite their awful draft and bring it before the House.

In points 10 and 11 of the report, Maclean suggests a legal way in which the Government may contribute to the cost of meat inspection to protect the industry from the loss of small and medium-sized abattoirs. The report says:


    "It would be perfectly legal for the UK Government to contribute to the costs of meat inspection in order to help the industry".

I had understood that the Government had stated their support for that proposal. I was seriously concerned to learn of the FSA proposal contained in the statutory instrument. Is not that a U-turn by the Government? Will the Minister confirm that there was a meeting last month with Food Standards Agency officials, vets and members of the industry? Will he confirm their disquiet at the proposals in the draft?

The CLA briefing says:


    "We are dismayed that these may have serious financial consequences for the small and medium-sized abattoirs whose interests the Maclean inquiry and subsequent report were intended to address".

Standard charge plus additional cost was not--I repeat, not--what the Maclean report recommended. Yet, that is now proposed in the statutory instrument.

The employment of fully qualified vets to carry out tasks well suited to lesser qualified but highly trained auxiliaries is also mentioned in the Maclean report at page 13. It is a costly waste of a scarce resource. If it is not possible to have the rules amended quickly, will the Minister and the Government consider funding the difference between the charge for auxiliaries and that for vets in anticipation of any rule change?

Will the Minister also consider arranging training courses which would enable auxiliaries to gain further qualifications and be upgraded to a level which would free up some of our fully qualified vets? Indeed, I am sure that the Minister knows that one problem which we experience in this country is a shortage of vets to carry out that particular type of work. We are reliant on vets coming in from abroad.

Maclean has much to say about those costs. Indeed, a large part of the problem lies in the varied, and in some cases excessive, rates that are charged for the services of MHS personnel. Large abattoirs are charged 29.13 per vet per hour. Therefore, if we assume that such vets complete a 35-hour week with an additional average of five hours' overtime charged for travelling time, such a vet is probably worth something in the region of 1,165 per week or some 60,580 per year to the Meat Hygiene Service.

8 Feb 2001 : Column 1348

Small abattoirs are charged 40.50 per hour, but sometimes charges of up to 60 have been reported. It is harder for vets who work across a number of locations to charge for a full week. However, even if they manage to work for only 30 hours, that is worth, let us say, 1,215 per week at 40.50 per hour. If vets receive 50 per cent of that sum of 1,200 a week, they will receive an annual salary of over 31,000. However, I have been given figures which indicate that the Meat Hygiene Service is employing foreign vets at a much lower cost. Perhaps the Minister can supply the payment range used. Can he also confirm the qualifications of some of those foreign vets?

If we assume that 20 per cent of the 1,200 per week is spent on vet-related costs, national insurance, pension, travel costs, and so on, that still leaves some 360 per week per vet accruing to the Meat Hygiene Service. If there were some 500 vets--I suspect that there are many more--they are contributing just under 10 million to the overheads of the Meat Hygiene Service.

Surely that is a great deal of money for running the overhead element of an organisation which manufactures nothing and markets nothing. Apart from the need for vets and inspectors, surely it could be run by accountants or a small secretariat. Instead, the Maclean task force was told that the headquarters and regional offices are charged to the meat inspection service at a cost of some 5.8 million per annum.

I believe that the allocation of that charge to meat inspection should be queried. However, I want to ask the Minister the following questions. How is the 5.8 million made up? Who is employed in those places and what do they do? How much do they cost? And who, finally, controls them? Is it a case of "jobs for the boys" or does someone keep an eye on the running of the service? Great concern exists in the industry that costs are escalating.

If it is not possible to keep the present practice as a base line, it would be sensible to try. It could be varied by negotiation with all interested parties. As my noble friend said, a rapid, independent appeal service must be established to deal with small disagreements. And there should be a totally independent arbitrator to whom the more complex and difficult cases can be referred.

The Minister must surely understand that, as it stands, this draft instrument cuts right across everything that the Government have been saying--and in which they believe--about the need for farmers to diversify and about their willingness to support small rural enterprises. Indeed, it cuts across the very foundations of the rural White Paper. Perhaps I may quote from that document again. John Prescott said in his foreword:


    "Our vision is of a living, working, protected and vibrant countryside",

8.44 p.m.

The Countess of Mar: My Lords, I am grateful to the noble Lord, Lord Willoughby de Broke, for asking this question this evening. I also owe him a debt of

8 Feb 2001 : Column 1349

gratitude for so ably chairing the independent inquiry into Misregulation of the Meat Industry and its Consequences. His committee's inquiry was funded by the Countryside Alliance and published by Honest Food, an organisation of which I am chairman. I also declare an interest in that my husband and I rear Black Welsh Mountain sheep for meat. We farm in Worcestershire, where only one abattoir now remains.

We may have a new Food Standards Agency but we still have the same Meat Hygiene Service. Its offices may be new, but its personnel are the same. Despite all the effort that has been expended in an attempt to point to the fundamental problems that have arisen between the abattoir and cutting plant owners and managers and the official veterinary service, those responsible for drafting the Meat (Hygiene and Inspection) (Charges) (Amendment) (England) Regulations 2001 seem to be hell bent on destroying all the small and medium-sized operations.

The Meat Inspection Charges Task Force, under the chairmanship of Colin Maclean, was set up, as has been said, following the report of the Meat Industry Red Tape Working Group, chaired by Robin Pooley. Both those reports tended to focus upon the effects of supervision of abattoirs and cutting plant and the charges imposed by the Meat Hygiene Service. Almost as an aside, they reflected upon the effects that closure of small and medium-sized abattoirs would have upon meat production. Maclean stated that his group did not have time to investigate the validity of the claims that have been made to government over a considerable period of time.

When I asked the noble Lord, Lord Willoughby de Broke, to chair the Honest Food inquiry, his brief was to look at the effects of regulation upon the whole of the specialist meat production spectrum, from the birth of the animal on the farm to the arrival of some part of its anatomy on the plate. It is interesting to note that, even with that wide brief, it became clear that the survival of the whole of this sector depended upon the existence of small and medium-sized abattoirs sited within reasonable travelling distance.

I believe that it is worth quoting from the summary of their report:


    "However, the most serious problem that is facing the entire meat industry is the inspection of slaughtering and slaughterhouses. The existing system of inspection, involving as it does the constant presence of veterinarians and meat inspectors, has placed an unbearable burden on the slaughtering industry, particularly on the small and medium sized cutting plants. The problem has been compounded by the charging structure, which is based on time rather than number of animals slaughtered. Many plants have already closed down, creating difficulties for smaller and organic farmers, butchers and consumers, multiplying environmental and animal welfare problems. Full veterinary coverage with attendant charges is due to be imposed on 1 April 2001. This will have disastrous consequences for the slaughtering industry and for the entire meat and livestock sector as well as the rural economy in general with detrimental effects on the environment, animal welfare and consumer choice in both town and country".

8 Feb 2001 : Column 1350

When asked about the Better Regulation Task Force recommendations during his evidence to the Honest Food inquiry on 20th June 2000, Mr Geoffrey Podger, chief executive of the Food Standards Agency, told the committee:


    "I think it equally fair to say that we"--

that is, the Food Standards Agency--


    "are concerned as a public body to meet our obligations to those who are affected by our regulatory regime. Part of that is, without doubt, both providing proper times for consultation, and also providing proper transitional periods for implementation".

The Maclean report was published in June 2000. On 15th January 2001 the stakeholders were presented with a draft statutory instrument for consultation. Responses are required by 14th February 2001 in order that the statutory instrument may be laid in Parliament on 12th March. That is in clear breach of the first assurance given by Mr Podger on 20th June. There can be no excuse for allowing only 23 days for consultation when the Meat Hygiene Service has had more than six months to think about the form of the draft.

I understand that the statutory instrument is to be implemented on 2nd April 2001. I should be grateful if the Minister would tell me whether the revised charges are to be levied from that date. If they are, the second of Mr Podger's assurances is breached. The statutory instrument allows for variations in charges between plants. There must also be agreement on the operational programme for operational times and throughput, as proposed in the Maclean report. If the implementation date is 2nd April, what time is there for agreement to be reached, particularly if there is a dispute between parties? Where, too, is the independent arbitration mechanism, which was recommended in the Maclean report?

It is my understanding that Her Majesty's Government accepted all of Maclean's recommendations. The intention was to change the culture of confrontation and dispute that had developed between the Meat Hygiene Service and the industry to one of co-operation and negotiation. Part of that change will be brought about by the recommendation that charges for inspection would be tailored to individual premises within the parameters laid down by EU directives. Pooley, Maclean, Honest Food and noble Lords, including the noble Baroness, Lady Byford, and myself, have all stressedthe need for and the importance of an independent appeals machinery that would be brought in to resolve disputes rapidly and efficiently. During the passage of the Food Standards Agency Bill, much of the discussion between the noble Baronesses, Lady Byford and Lady Hayman, and myself involved that topic.

The noble Lord, Lord Willoughby de Broke, has already referred to the letter of 4th January 2001 that Sir John Krebs wrote to Dr Szamuely. In that letter, Sir John Krebs said,


    "an independent element to the internal MHS appeals mechanism is currently being developed. This will allow anyone who remains dissatisfied with an MHS decision after it has been reviewed internally to appeal and have the case considered independently ... Meanwhile, the Agency is arranging for the independent consideration of cases on an ad hoc basis".

8 Feb 2001 : Column 1351

That is not satisfactory. I need only whisper the words, "Mead Webber", for the Minister to understand that the ham-fisted and long-winded way in which that "independent appeal" has been handled is a prime example of justice denied. What difficulty is the FSA having in appointing a panel, as recommended in the Maclean report? The matter is very simple. There are appeals and tribunals all over the country on various subjects, but the MHS is having a problem appointing a panel that is separate from its organisation.

The noble Lord, Lord Willoughby de Broke, and the noble Baroness, Lady Byford, have expressed their concerns about the drafting of the proposed statutory instrument and in particular about the drafting of paragraph 8A(2). After all the discussions that we have had in your Lordships' House about the undesirability of the gold-plating of EU legislation by UK officials, I am saddened that once again we have another example of that. Will they never learn? We jokingly say that their lives would be so much easier if there were no small farms, no rare breeds and no farm shops or farmers markets, just a few monocultural large farms; a handful of identical abattoirs that handled uniformly shaped sheep, cattle and pigs; and supermarkets. The latest statutory instrument, unless it is extensively revised, would bring the joke far too close to reality.

The Government accepted the Maclean report in full. I ask the Minister to ensure that the recommendations are implemented in full without any carefully concealed ifs and buts or shalls instead of mays.

The industry wants an end to confrontation and is willing to co-operate if matters are dealt with fairly. Too many of the paragraph 8 proposals rely upon subjective judgments. A speedy arbitration system must be brought in at the same time if the new charges are to be implemented effectively.

8.53 p.m.

The Earl of Selborne: My Lords, I, too, start by thanking my noble friend Lord Willoughby de Broke for this timely Question and for his introduction to this short debate.

The noble Lord and both noble Baronesses who have spoken so far this evening dealt adequately with the deficiencies of the draft statutory instrument. I need not say more about that. My noble friend's Question asks the Government,


    "how they expect to implement the recommendations made by the Maclean Report".

I shall widen our debate. The Maclean report recommended that the Government should make all haste in getting in place a new risk-based meat inspection regime which would allow more delegation of official controls to auxiliaries. We know very well that that cannot be done in a hurry, however much haste is put into the exercise. That is because, as the Government--or the FSA--have found to their cost, the two directives to which we are required to conform, one of which relates to fresh meat and the other to poultry meat, are specific about the requirement for a veterinary presence. That is why the matter has

8 Feb 2001 : Column 1352

become a point of contention. The Government have been helpful and have sought to try to find sensible, pragmatic solutions. However, they were not acceptable to the regulatory body and we now face this sorry saga of having to implement two directives that appear to be inappropriate for the United Kingdom.

That is the problem. The directives, which date back to 1964 and 1971 respectively, may well be appropriate for the Continent of Europe, where the veterinary profession has a different tradition: veterinarians may well be the most appropriate people to do meat inspection. In our culture, which has worked extremely well--at least, it has until recently--meat inspectors are well qualified to inspect meat and could look adequately at the animal on the hoof, when that was required. That is not to suggest that a veterinarian was not always necessary; he certainly would be on occasion. Common sense suggested that if one had a specialist working in an abattoir, it would be perfectly possible to give responsibilities--whether they be veterinary or involve meat inspection--to one person, who might be an auxiliary or a veterinarian. The Government were trying to get agreement on precisely that point, but the two directives made that impossible.

I should perhaps declare an interest or an involvement at this point, as a trustee of the Royal College of Veterinary Surgeons Trust. Maclean reports in paragraph 40 that the Royal College of Veterinary Surgeons felt that some of the responsibilities that are presently prescribed to qualified veterinarians could and should be delegated to meat inspectors. I am sure that that is very sensible advice.

Is it possible in the short or medium term to get the directives altered? I have the honour to chair Sub-Committee D of the European Union Committee. That sub-committee contemplated approaching that matter; perhaps we still should. When the excellent informal report by Honest Food, which is chaired by my noble friend, was produced, we felt that it had posed the very questions that we should have posed. We therefore await the response to that report. The Minister's response at Smithfield was encouraging. However, we have already heard that the draft statutory instrument does not deliver all that we had hoped for and expected.

I return to the overwhelming need not to accept the situation, although I fear that Maclean almost seems to do so. We are told that we have to put up with these two inadequate and inappropriate statutory instruments, which confuse a situation that was previously working reasonably well, at least so far as the United Kingdom was concerned. We are told to accept that we have to put more veterinarians in the field than is necessary, that we have to carry out a certain amount of double accounting and that senior meat inspectors, meat inspectors and veterinarians should all follow the same product through the abattoir. That is quite unnecessary and inappropriate.

That prompts us to ask what the purpose of the directives is. It is important that there are directives; there were regulations in the United Kingdom

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previously. The directives exist, first and foremost, to protect the consumer. One therefore has to ask whether the directives serve the interests of consumers. Clearly they do not. They add to costs, reduce choice and consumers have made it clear that they do not think that the directives are in their interests.

Do the directives contribute to animal welfare? The opposite is the case. As one closes down the small approachable abattoirs, one becomes involved with animal welfare issues, which we all seek to avoid.

Third and last in the hierarchy of interests that one is seeking to protect through the directive come the interests of the trade: the producers and the meat industry. It is right that they should be regulated and that, whether they like it or not, there should be appropriate regulation. Clearly, the regulations are not appropriate for the producer--it is driving them out of business--or for the meat industry.

That appears to involve a triple whammy. Consumers, animal welfare interests and the industry recognise that we have to conform to a directive that the Government have, with honesty, said is not appropriate for us and is not in our tradition of separating veterinarians and meat inspectors. So I would say very firmly that I hope the Minister will take the advice of the Maclean report and make all haste in putting in place a new risk-based meat inspection regime. In other words, we need to get the directives changed. It does not take very long to change a directive if the will exists to do that. I know that some member states will not see the need for change and will fear that what is proposed is a dilution.

However, we must then ask what assurances can be given that the meat inspectors, who were clearly doing an excellent job before, will continue to do that excellent job if they are allowed to return to a regime which was in existence before. I believe that we should have no difficulty whatever in doing that.

It is really a difference in culture. I suspect that in some of the member states, the concept of veterinarian practice encompasses something which the Royal College of Veterinary Surgeons would not consider to be part of veterinary practice, but something which would come under the meat inspectors' regime.

So there is a misunderstanding which has led to this sorry story. We must recognise that we are trying to make the system work. The directives are not helping and they need changing. There is no earthly need to sit back and say, "Well, this is the law of the land and we must conform with it". It is for government to change directives when they are not helping anyone and to persuade member states that it is in their interests as well as ours to change them. Therefore, I hope that the Minister will give us every assurance that the Government will be making haste to get these directives changed.

9.1 p.m.

The Duke of Montrose: My Lords, I am most grateful to my noble friend Lord Willoughby de Broke for gaining this debate at this particular time. I am also

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very taken with the remarks made by my noble friend Lord Selborne in relation to trying to get some of the regulations altered. My remarks are drawn up in the light of the regulations as they are at present.

In discussing the costs of inspection and regulation of slaughterhouses, I must declare a financial interest. As a livestock producer, I know that the one unwritten rule of the game is that if any charges are imposed on the processing sector, they are immediately passed on and deducted from the price given to the primary producer. Those in my position certainly hope that if the Government succeed in reducing those charges, the reverse will happen.

It is not long since the farmers in this country told themselves that they had the most efficient agricultural and livestock production systems in Europe. That has been rather cruelly dispelled as we have become more and more aware of the quickening pace and quantity of production across the rest of the Continent. We have changed our breeds, refined their diets and looked high and low for more efficient means of production. But any benefit that we might have had as a result of all that effort has been stymied by the advent of BSE with its hugely increased slaughter inspection charges and the loss of many of our markets for exports. But now that there is an opportunity to resume more exports within Europe, another hurdle is the weakness of the euro, for however long that is likely to last.

Those economic disasters have been felt equally by the slaughtering and processing industry and your Lordships will be aware that whereas in 1995, there were 495 abattoirs in Great Britain, at present I believe there are only 387. Of those which have closed, 71 were killing up to 5,000 units per annum.

It appears, through the measure that we are discussing today, that the Government are addressing the first of those hurdles which I mentioned. I should add that due to the regulations made for devolution, there is a requirement for separate legal processes in Scotland and Wales to achieve the same ends. I have received a copy of the consultation package from the Scottish division of the Food Standards Agency and, sensibly enough, it exactly mirrors the statutory instrument that is before us. Perhaps that is another dimension to joined-up government that I know the Government are very keen to achieve. I expect that if any modifications are found to be needed in this piece of legislation, that will carry through also to the Scottish wording.

Representatives of the Scottish Association of Meat Wholesalers and the Scottish Federation of Meat Traders Associations attended the same meeting held by the Food Standards Agency here in London that was mentioned by the noble Countess, Lady Mar, as those representing the industry in England. They have voiced to me similar concerns to those expressed at that meeting. Their official response is to be drawn up tomorrow and will no doubt be sent to the Scottish Food Standards Agency as well as to London.

I understand that despite the Maclean task force wishing to look at the problems of small, medium and large operators, the industry is officially categorised as

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having only two parts: full throughput plants and low throughput plants. The division is made at the level of a throughput calculated as 1,000 units per annum, which is approximately 20 cattle a week, or their equivalent.

From the indicative examples provided to me by the Scottish Food Standards Agency, the straightforward application of the headage basis to full throughput plants would provide a reduction of anything from 35 to 55 per cent in the current charges. That would probably work out at between 2.50 to 3.50 per unit or cattle beast.

There is also a hidden charge that will be introduced from 1st April when those plants will require an official veterinary surgeon to be present throughout the ante-mortem and post-mortem inspections. At present, if they are in the proximity of other operators, there is room for the vet to move between them as the workload allows. But the fact that they will have to be permanently there will add to the cost of the operator but will not provide any cost savings to the Government.

The extra charges imposed under Paragraph 8A, mentioned by my noble friend Lord Willoughby de Broke, could conceivably, by good management, be avoided in that size of operation. The exception, of course, would be in the case of major equipment breakdowns.

In Scotland, due to the rationalisation that has taken place, a great many of our slaughterhouses are now in that category. The major savings on offer under the Government's proposals come in their application to the low throughput plants where, again, using examples provided by the Scottish Food Standards Agency, plants with a throughput of between 100 and 300 units could have their charges reduced by anything between 60 per cent and 95 per cent, or between 5 and 33 per unit.

In Scotland, there are 12 slaughterhouses and 13 cutting plants that fall into that category, a number of them serving extremely remote communities such as Wick, Stornaway and Elgin. Those operations are particularly vital to their communities and to the welfare of the livestock in their areas, as mentioned by my noble friend Lord Selborne. They are the ones that will be particularly vulnerable to the extra charges that could be levied under the proposed paragraph 8A. Subparagraph (2)(d) will be called up to encompass extra travelling costs and possibly even overnight accommodation. There would almost certainly be a lack of uniformity in the animals for slaughter and there would certainly be some interruptions to the process for cleaning and disinfecting as they switch from killing one class of stock to another. They may not be able to afford the slickest and latest equipment, and that might be regarded as "technical inadequacies", as in subparagraph (2)(b).

That points to the need for a forum, as many noble Lords have said, where any disputes about extra charges imposed can be aired and representations made. There may not be many businesses to which that exact argument applies in England, except for some in

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the far South West. However, the reasons for requiring such a body might differ depending on the circumstances, but it will none the less be important. Can the Minister tell the House what proposals the Government have to ensure that those who encounter such difficulties can have the benefit of an outside opinion?

9.9 p.m.

Baroness Northover: My Lords, I too thank the noble Lord, Lord Willoughby de Broke, for bringing this important issue before us. Speaking on behalf of the Liberal Democrats, I share many of the noble Lord's concerns and I urge the Government to go further than it appears is the current intention.

There are three key issues: achieving high standards in public health, managing animals humanely and supporting our rural economy. First and foremost, we must ensure that we pursue the highest of standards in this part of the human food chain. The recent inquiry by the noble and learned Lord, Lord Phillips, into the BSE crisis makes it plain that any sloppiness in slaughterhouses can have serious consequences. It charted the chain of events leading to the introduction of the centralised Meat Hygiene Service, pointing out that standards of hygiene in British slaughterhouses provided the case for such action. In 1992 the inquiry quoted Selwyn Gummer reporting to the House of Commons Agriculture Committee in the following terms:


    "Slaughter hall floor heavily soiled with blood, gut contents and other debris--no attempt to clean up between carcasses",

and so on.

The inquiry pointed out the need for high standards as shown by the fact that one half of a gram of BSE-infected brain had succeeded in transmitting BSE to a sheep. Carelessness in implementing regulations could have far-reaching consequences. We should never lose sight of the reason for inspection. However, the need for high standards does not mean that the type of inspection, expensive and intensive though it may be, is necessarily of the right kind, which was a point highlighted in the Phillips report and in this debate. Clearly, more needs to be done to ensure that inspection is targeted at real risks and that it does not simply duplicate work already carried out. Of course, the Government are covering the costs of additional inspection resulting from the BSE crisis, but in other areas of inspection they are not picking up the tab and yet that inspection is there largely for public health reasons.

I turn to the issue at the heart of the debate: the demise of the small and medium-sized abattoirs, especially in rural areas. The overheads of small abattoirs are higher than they are for larger abattoirs. As we have heard, the costs of inspection play a large part in this. As the Maclean report makes clear:


    "For many small and medium sized businesses, the cost of the required additional veterinary supervision will be unsustainable and many will be forced to close. This will be bad enough in itself, but when even the FSA and the veterinary profession admits that 100% veterinary supervision is not necessary for the protection of public health, the forced closure of such businesses becomes nothing short of scandalous".

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Does that matter? Yes, it does. If small abattoirs continue to go out of business there will be serious consequences.

I now deal with animal welfare. Animals become agitated if transported for long distances. Quite rightly, in this country we pride ourselves on our humane approach to animal husbandry. We should take such concerns seriously.

We also know how costly and difficult it is for farmers to transport their animals long distances to large slaughterhouses. We must take that seriously, especially given the parlous state of much farming today, particularly in upland areas. We should not add to farmers' costs and problems for no good reason.

The Maclean report makes it clear that small abattoirs provide an essential service in remote areas. They service a substantial proportion of the independent retail shop trade, where they can fulfil the growing demand for traceability and guaranteed provenance, including organic produce. They undertake most of the slaughtering for the ethnic minority community trade and they provide a casualty slaughter service. These abattoirs are particularly vital to small, family farmers and to local markets.

As we have heard, the current system of charging an hourly rate for inspection means that in small plants, where few animals are slaughtered in one day, the cost to the plant per animal slaughtered is much higher relative to that in larger plants, where there is a constant, high throughput. We have long advocated moving to a headage system. We welcome Maclean's proposal that the additional costs of inspection should be borne by the public purse. Services that are accessible to farmers, thus promoting both animal welfare and consumer choice, are public benefits.

As we have heard, the Government's proposals contain serious flaws which surely must be addressed. Recognising the importance of high standards of inspection, the Government should also accept that small abattoirs are an essential link between farm and marketplace. Without support, many of those facilities will be lost. The Government therefore need to go further in meeting the conclusions of the Maclean report.

9.15 p.m.

Earl Howe: My Lords, I, too, am grateful to my noble friend Lord Willoughby de Broke for introducing this important topic for debate. Like my noble friend the Duke of Montrose, I have to declare an interest as a dairy farmer. This debate is not simply about the future of small, rural abattoirs. It is, by extension, also about the health of the rural economy, consumer protection, consumer choice and animal welfare. In that sense, it is a very wide-ranging topic, which deserves more than a short debate to do it justice.

The past ten years or so have seen a marked contraction in the number of abattoirs in the UK. To say that this has come about as a result of both regulation and market forces is a broad statement of

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fact, but it is a statement that glosses over a complex set of changes in the market for British meat. On the one hand, there has been a drive for ever-greater efficiency, led to a large extent by British supermarkets, which has resulted in the establishment of larger plants and the closure of many smaller ones. On the other hand, we have seen a growth in consumer demand for more specialist meat products, which small and medium-sized abattoirs are particularly well suited to supply.

Over-arching all this, as the noble Baroness, Lady Northover, so well explained, has been an acceptance of the need to ensure the highest standards of meat hygiene. That, as we all know, has come about at a cost. I have heard it said by a number of respected commentators that the sector is currently walking a tightrope in a way it perhaps has never done. The steep rise in inspection costs, particularly over the past two years, has placed the viability of hundreds of businesses in jeopardy. Many have found these costs unsustainable and have ceased trading. The vague but long held suspicion that the costs borne by British abattoirs are at the higher end of the spectrum among EU member states has been borne out by recent evidence. By virtue of the current charging structures, it is our smaller abattoirs that find themselves most disadvantaged.

Nevertheless, the tightrope is still being walked. The advent of higher inspection charges, unwelcome though they have been to the industry, has not yet led to the sort of catastrophic contraction in the sector that many people initially feared. There have certainly been some regrettable losses and closures, but the small and medium-sized abattoir sector is still very significant. It is estimated that it accounts for some 50 per cent of cattle, 60 per cent of sheep and 25 per cent of pigs slaughtered in Great Britain.

The importance of the sector is not simply defined in terms of volumes. The Maclean report praises it for the service that it provides to farmers, to the trade and to--consumers. In that regard, I very much echo everything that was said by the noble Baroness, Lady Northover. Smaller slaughterhouses are an essential facility in remote rural areas. Farmers and their animals benefit from having shorter distances to travel--not least when casualty animals have to be dealt with--but smaller units also serve local markets. They serve most of the independent retail trade, where there is a demand for traceability and guaranteed provenance. In their ability to offer non-standardised and flexible production, they also supply the smaller end of the catering trade, as well as organic producers and many ethnic communities. That means that the continued survival of small and medium-sized abattoirs is essential if the market for home-produced meat, as we know it today, is not to change out of all recognition.

The ruling by the European Commission that the UK was under-implementing the various meat hygiene directives led to a decision by the Government to increase the levels of veterinary supervision to 100 per cent in all but the very smallest slaughterhouse. Even in the smallest premises there will still be a requirement

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for compulsory ante-mortem inspection by the OVS. Colin Maclean's task force recognised that the added costs of those changes, if borne by the industry, would result in,


    "the decimation of the sector".

In net terms those additional costs would be in the region of 11 million in 2001-02 which, for certain plants, would involve a near-doubling of inspection charges.

It is greatly to the Government's credit that they have accepted the recommendation of the Maclean task force that they should provide,


    "some degree of financial support for the industry".

The additional money on offer for the coming financial year to assist small and medium-size abattoirs is some 8.7 million. It is also welcome that the revised basis of charging set out by the task force has been adopted. With effect from April, abattoirs and cutting plants will be charged the lower of either the standard throughput charges laid down in the EU directive or the actual inspection costs, subject to a specified minimum. For many smaller units, effectively it means that in future they will be charged on a headage basis, not on the basis of time cost. That is a very positive development.

There remain, however, as my noble friend Lord Willoughby de Broke so rightly emphasised, a number of uncertainties. The draft statutory instrument sets out a whole raft of contingencies which, should any of them occur, could trigger the imposition of additional charges over and above the standard charge. I have read new paragraph 8A very carefully. I can quite see that the Meat Hygiene Service needs to be protected against the possibility that an abattoir might, for example, take all day to kill only a few animals and that under the proposed charging tariff such costs would not be otherwise recoverable, but the wording of the draft instrument is far from clear. My noble friend Lady Byford rightly pointed out that terms such as "longer" and "frequent" are unexplained and unqualified. There is also the catch-all provision that refers to,


    "any other reason like those mentioned in paragraphs (a) to (g)".

What exactly does that mean, and who is to interpret that provision?

There are those of perhaps an over-suspicious turn of mind who interpret the draft regulations as being designed more to ensure that the MHS is able to claw back its costs than to help the owners of small abattoirs. This evening we need reassurance from the Minister that the effect of the regulations will not be, as some now fear, to enable the Meat Hygiene Service to give with one hand and take away with the other more or less at will. The effect of that would be a de facto return to time-based charging and in turn, one assumes, the decimation of the sector of which Maclean warned.

There are also some practical worries. Given that all businesses, no matter how small, must comply with legislation that governs holiday entitlement and so forth, many small plants are bound to find themselves

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operating for at least part of the year at less than optimum efficiency, for example when one of the team of slaughtermen is on leave. As the regulations are drafted, how can such unavoidable eventualities fail to give rise to additional charges?

The next question is how a dispute arising from this kind of situation, or the interpretation of the regulations, is to be resolved. The Government have rejected the recommendation of the task force that there should be a system of independent arbitration in situations where the MHS and plant owners are unable to agree on an operational programme. I hope that the Minister will be able to elaborate on the Government's reasons for this. The noble Lord will be aware that the decision has caused considerable disquiet.

Finally, following my noble friend Lord Selborne, perhaps I may ask the Minister to address some longer-term issues. The Maclean report recognises that, despite widespread agreement in the EU on the need to replace the current meat inspection system with something better, any root and branch changes to the EU meat hygiene directives will take some years to achieve. It would be helpful to hear from the Minister what the Government's broad objectives are in that regard. I believe that the abattoir sector is unique in the food industry in having to submit to day-to-day inspection and supervision from outside as opposed to being able to police itself. Even if it is not possible to get away from such a system entirely, do the Government believe that a more risk-based approach to meat hygiene is both desirable and achievable? If they do, what kind of regime do they envisage? Is there scope, for example, to introduce a HACCP system in abattoirs on a plant-specific basis? To what extent should the UK press for certain responsibilities currently assigned to vets to be delegated to auxiliaries, as was recommended in the Pooley report? Finally, what is likely to be the timescale for change?

The Government's response to the Maclean recommendations have, in large measure, been greeted with appreciation and relief by the industry. But the response still leaves worrying questions hanging in the air. The sector is still walking a tightrope. I hope the Minister will take the opportunity today to provide the industry with some strong and unequivocal reassurance.

9.26 p.m.

The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, the noble Lord, Lord Willoughby de Broke, expressed some sympathy for me as a Health Minister in having to answer this Question, and, indeed, answering for the activities of the Food Standards Agency. Lest the House share that sympathy, I suppose I should confess that, along with my noble friend Baroness Hayman, I was responsible for taking the Food Standards Act through your Lordships' House. So in a sense I am now reaping what I sowed a year or so ago.

I am most grateful to the noble Lord for instituting the debate on the costs of inspections and regulation of slaughterhouses. He brings enormous experience and

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expertise to the debate. I read with great interest the report of the committee of inquiry which he chaired into the regulation of the meat industry on behalf of Honest Food which is chaired by the noble Countess, Lady Mar.

The report of the committee chaired by the noble Lord emphasised the pivotal role of slaughterhouses in the meat industry and the contribution they make to the rural economy. It also had important points to make about the problems of what is described as a "bureaucratic and overly prescriptive approach to regulation".

It also gave particular emphasis to the role of small and medium-sized slaughterhouses and saw them as having critical importance to the structure of the meat and livestock industry because of the flexibility and geographical spread of those operations. In turn, those were perceived to be crucial to farming, particularly small-scale specialised organic or mixed farming; to the survival of small businesses, such as farm shops and butchers; to consumer choice; to animal welfare; to the rural economy; and to the environment. I say to the noble Lord and other noble Lords that that view is very much shared by the Government.

The Government certainly attach very great importance to the future of slaughterhouses--large, medium and small. They play a vital role, not only in ensuring consumer choice in relation to the meat that customers buy, but also in preserving the fabric of the rural economy.

The Government clearly have recognised the difficulties faced by the meat industry as a result of increased veterinary supervision levels and the associated costs. That is why we have put in place a number of measures to help small and medium-sized abattoirs, including the freezing of hourly rates for Meat Hygiene Service inspectors in 1999/2000, which was worth around 7 million to the industry. In the current financial year the increase has been restricted to 2.2 per cent, in line with the rate of inflation.

The Pooley group, which we set up to look at the burden of cost and regulation that had steadily been allowed to overshadow the industry, made many important recommendations to the Government in December 1999. One of the recommendations was that a task force be set up to look at the issue of meat inspection charges. The Government accepted that recommendation and set up the Maclean group. As noble Lords have intimated, the main recommendation of the group was that the system of charging based on actual costs should be replaced by one based on standard (headage) charges. The Maclean recommendations were not just about a move to a headage system of inspection charges. I believe they were very much a balanced and considered set of recommendations about how we could do this while respecting European law, allowing the industry the opportunity to trade freely and enabling the Meat Hygiene Service to manage its operations efficiently and cost effectively.

8 Feb 2001 : Column 1362

That recommendation came with a substantial price tag of around 20 million. It also came with a remarkable consensus of support across all sectors of the industry as well as environmental and consumer groups. The Government have found that resource and announced their intention to implement the recommendations of the Maclean group. That is why the agency is consulting publicly on the proposals related to those recommendations which will lead to a substantial reduction in the level of meat inspection charges paid by the industry. Although the smaller plants will benefit the most, no plant will be worse off than before.

Before I turn to the specific questions relating to the issue of charges and arbitration, I respond to the points raised by the noble Baroness, Lady Byford, and the noble Earls, Lord Selborne and Lord Howe, about the philosophy that is behind the regulatory system. I have no hesitation in saying that the Government recognise that the current meat inspection is overly prescriptive, bureaucratic and is in need of a radical overhaul. The Government also accept that it should be replaced by a risk-based system of checks, as recommended by the Pooley group and the independent committee of inquiry headed by the noble Lord, Lord Willoughby de Broke.

On that basis, the Government have welcomed the proposals from the European Commission issued last year to consolidate and simplify food hygiene legislation, as well as moves to modernise meat inspection practices and meat hygiene legislation. The current rules with regard to red meat are over 35 years old--a point made by the noble Earl, Lord Selborne.

These proposals provide an opportunity for us to establish a consistent, effective and risk-based system for ensuring food production that is proportionate to the risk to public health. Protection of public health is of paramount concern and will underpin our response to the proposals.

In answer to the noble Earl, Lord Howe, the Government believe--and I believe--that responsibility for producing safe food, including meat, should rest unambiguously with the operators and should be based on HACCP principles, while independent scrutiny should provide the necessary assurances that operators' controls are appropriate and effective.

Noble Lords are impatient and see the need for haste. We all understand the process of changing EU legislation and introducing a new system of controls is likely to take some time to achieve. I accept the challenge from noble Lords that the United Kingdom needs to be vigorous in pursuing these issues. I can give them that assurance.

I turn to the issue of additional charges. The Maclean report recognised the potential for some to abuse a new headage-based charge system. The report recognised at paragraph 63 that the Meat Hygiene Service must be able to maintain or improve its current operating efficiencies. Because of that it recommended that the FSA or the Meat Hygiene Service must have powers to prevent meat plants abusing a charging

8 Feb 2001 : Column 1363

system based on standard charges. That said, the report also said that the FSA or the MHS should not introduce control mechanisms that would restrict business opportunities or opportunities to trade.

To that end the report recommended that a system be introduced whereby meat plants and the Meat Hygiene Service agreed on an operational programme, with any disagreements being referred to independent arbitration. The report specifically recommended that where plants failed to stick to their agreements the Meat Hygiene Service should be able to recover any additional hygiene inspection costs arising as a result.

In the consultation process, the Food Standards Agency did, as recommended by Maclean, include proposals for additional charges to deal with the kind of abuse that his group foresaw. But, as noble Lords have pointed out, the proposals did not follow the Maclean recommendation of agreed operational programmes backed up by independent arbitration. That was because that was seen as likely to take some time to implement and might possibly require separate legislation. The Food Standards Agency, conscious of the need to get the new charging systems in place as quickly as possible and by the beginning of April this year at the latest, looked at alternative mechanisms for recovering the additional inspection costs.

A number of noble Lords asked specifically about the draft regulations, particularly Regulation 8A. I understand that those proposals were designed to mirror the provisions in the EU charges directive. There were two consequences of that. First, there was a catch-all provision in the proposed Regulation 8A(2)(h) which meant that the Meat Hygiene Service could recover almost any increased cost from a meat plant. I have listened carefully to noble Lords who have asked the MHS to spell out the implications of the provision. I am also very much aware that many in the industry--perhaps all in the industry--think that that is draconian and gives the Meat Hygiene Service too much power.

The second consequence of the need for speed was that there was no mention of independent arbitration in the agency's proposals. I know that many in the industry are concerned about that too, particularly as the Maclean group specifically mentioned the issue of arbitration. The position of the Food Standards Agency is that these proposals, as they lie on the table, reflect a government commitment neither to over-implement nor under-implement our EU obligations. They also reflect a desire on the agency's part to avoid the necessity of introducing a dispute resolution procedure that potentially could be cumbersome, bureaucratic and costly to operate.

I should like to make a number of points and respond also to the issues raised in the debate. I want to assure noble Lords that this is not a back-door way to nullify the proposals to change the charges proposed in the Maclean report. The noble Baroness, Lady Byford, raised the issue of "shall" as opposed to "may" in regard to Regulation 8A(2). I am becoming a connoisseur of "may/shall" debates, but I find myself in the unusual position of having to defend the use of

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the word "shall" when noble Lords opposite would no doubt propose the use of the word "may". I am sure that that will be one of the issues that will be carefully considered in the consultation process.

I clearly accept that there has to be a "felt fair" system. It is not the intention for either the agency or the Meat Hygiene Service to have unfettered power in this area. I am also clear that there has to be a proper appeals system. The Food Standards Agency intends to introduce an independent appeals mechanism for the Meat Hygiene Service. That will be consulted on shortly and will be a separate exercise from the current consultation on charges, although once implemented it might be possible to use it for complaints regarding inspection charges. In a sense, however, that will need to be discussed as part of the response to the consultation process.

Noble Lords will appreciate that we are still in the middle of the consultation process. For that reason, some points have been raised to which I cannot respond. This is a real consultation exercise and it is our intention to listen carefully to what is said and for a genuine effort to be made to take on board all the points raised and concerns expressed. I know that the agency is committed to doing that. The Government will wish to ensure that that is what happens.

The noble Baroness, Lady Byford, referred to a meeting with key industry stakeholders. That meeting did take place. I can confirm to her that the industry made its views quite clear on the issues of charges and independent arbitration. I do not believe that the agency could be in any doubt of the views expressed by the industry on those matters.

The consultation exercise will not have run its course until 14th February. No doubt more comments will yet be received. However, I can assure the House that the agency is considering carefully those concerns and is putting together alternative options to present to the Government in due course. Furthermore, I can assure noble Lords that the comments made in the course of our debate tonight will be fully played into the consultation process.

Time is moving on, but I should like to respond to some of the points that have been put to me. Perhaps I may respond to the noble Countess, Lady Mar, by saying that as far as the Mead Webber investigation is concerned, I share her disappointment that that investigation is taking so long to complete. I understand that the Food Standards Agency and the chairman of the investigation panel are pressing for the need to make faster progress. I should like also to comment to the noble Earl, Lord Howe, on the need for the complex set of changes which has impacted on the number of slaughterhouses. In 1979, there were 975 slaughterhouses in England. By 1997, that number had reduced to 375; by 2000, it had further reduced to 329.

We have had an important discussion. It has given me the opportunity to underline the importance of slaughterhouses and, indeed, to pay tribute to all those who work in the industry. They have a tough and challenging job to do and I for one take my hat off to the men and women working in slaughterhouses. They

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make an extremely valuable contribution to the meat industry, to the economy as a whole and, of course, to the rural economy. I also acknowledge the value of small and medium-sized slaughterhouses. The Meat Hygiene Service has no intention or wish to drive such slaughterhouses out of business. If there were any evidence of that, the Government would be extremely concerned about it. As the noble Earl, Lord Howe, pointed out, the small and medium-sized sectors of the industry make a major contribution in terms of the number of animals slaughtered. It is important to remember that.

The Maclean report recorded many views on the contribution made by small and medium-sized abattoirs. Although it did not have time to investigate the validity of those claims, it made the point that the decimation of small and medium-sized abattoirs would reduce diversity for the consumer and the efficiency of market clearance in a way that would be detrimental both to the farmer and the consumer. The Government have little argument with that statement. It is also clear that noble Lords do not. That is why we have decided to implement the Maclean report.

In concluding this debate, I wish to assure noble Lords that the current consultation is very much an open process. The Government will listen carefully to the genuine concerns that have been expressed. Ultimately, the Government wish to see a thriving and competitive slaughterhouse market in which the inspection system assures that public health is paramount--I very much agree with the comments made by the noble Baroness, Lady Northover, on that point--but which in the long term is founded on a risk-based system with a fair and sensible approach to charges. In that spirit, the Government will listen carefully to all the comments which have been made by noble Lords tonight.


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