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Mr. Maclean : I can help my hon. Friend considerably. What he says is just not the case. We have so many safety belts and braces on this operation it is not true. About 99 per cent. of all animals are caught at the farm stage. We then have the offals ban, which removes all offals which could contain BSE, such as the brain, from all animals. That is the first pair of braces. We also have the state veterinary service, the members of which go to the markets, and we have meat inspectors in slaughterhouses doing spot checks. So because the offals are removed, there is no prospect of meat contaminated with BSE getting into the human food chain.

Mr. Matthew Taylor : The Minister gives assurances, but I do not believe that they will reassure either producers or consumers that BSE is being prevented from getting into the human food chain. A row erupted yesterday between environmental health officers from my area and the Department. The officers believe that they are being overruled from taking the necessary action to prevent contaminated offal from getting into the human food chain through meat. I understand that, because the industry lobbied the Ministry to try to get action taken, the Ministry intervened. This is turning into a scandal.

Mr. Maclean : I advise the hon. Gentleman to check his facts. I do not blame farmers for wanting to get 100 per cent. compensation for all animals, but the hon. Gentleman must not pretend that 50 per cent. compensation is somehow leading to infected animals entering the food chain. I am satisfied that my veterinary officers behaved absolutely correctly yesterday. It is irrelevant whether the animal's head was or was not cut off before it entered the slaughterhouse.

Mr. Matthew Taylor : Why not?

Mr. Maclean : Because the relevant offals have been removed from all animals' heads. I advise the hon. Gentleman to check his facts.

Mrs. Currie : I thank the Minister for his prompt and efficient efforts to deal with the problem and in particular for the increased allocation for research into BSE, which is a matter of great concern in my constituency. As and when he is considering financial assistance for farmers affected by this problem, will he also take into account the damage done to farmers affected by the other problem of contaminated meat--lead in feedstuffs that has gone to some of my farmers' cattle?

Mr. Maclean : I thank my hon. Friend for drawing attention to the extra money that we have made available for food research, and I hope that that will stop

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Opposition Members from continually suggesting that essential research for food safety has been cut, which is patently not the case.

As for compensation, we believe that the measures that we have taken on BSE are absolutely fair, and that legal channels are open to those who have been affected by lead in feeding stuffs to claim compensation from the appropriate suppliers.

Mr. Ron Davies : If what the Minister says is true, will he explain why there are regular and consistent reports from county council trading standards departments indicating the identification of BSE-infected cattle at livestock marts and abattoirs? Is it not a fact that the Tyrrell committee, the Minister's own scientific advisers, and the Government's announcement of the new research programme are clear indications that the Government recognise the real danger that exists to human health? Given that, why will the Minister not accept that the only way to prevent BSE- infected products from going into the human food chain is by offering 100 per cent. compensation, thereby stopping the entry at source?

Mr. Maclean : That is absolute nonsense. Neither 100 per cent. compensation nor 50 per cent., compensation is the means to stop any infected offals entering the food chain. That is done by cutting out all the relevant offals. People wrongly call BSE "mad cow disease" ; but it is a disease of the cow's brain and central nervous system. Those offals are removed from all cows whether they have BSE or not. There is, therefore, no question of meat being infected by BSE as those offals are removed.

European Commission Foodstuffs

11. Mr. Cryer : To ask the Minister of Agriculture, Fisheries and Food if he will review the distribution of free European Commission foodstuffs with a view to increasing the number of distribution centres ; and if he will make a statement.

Mr. Curry : I will shortly be deciding on the arrangements for distributing surplus intervention foodstuffs to our most needy citizens.

Mr. Cryer : Is the Minister aware that great difficulty was caused in the city of Bradford by the relatively small number of distribution centres and that although that caused great distress to a number of old people who had to queue for long hours, the Ministry turned down my request for extra distribution centres? Is he also aware that organisations such as the Dovesdale club in my constituency were willing and able to distribute the foodstuffs, but were turned down? The Ministry therefore contributed to the distress and difficulty caused by the distribution process. Will the Minister give me an assurance that he will consider establishing more distribution centres?

Mr. Curry : When this not very satisfactory scheme began, we took the view that distribution would be carried out by voluntary agencies. In fact, five undertake that task in Bradford. I have no intention of erecting a Government bureaucracy. Those organisations that can satisfy our requirements will, of course, be given entitlements, but the more that take part, the less each will receive and there is very little food to go around. Although I do not think it is a sensible scheme, we shall operate it as best as we can.

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Mr. John Marshall : To ask the Prime Minister if she will list her official engagements for Thursday 11 January.

The Prime Minister (Mrs. Margaret Thatcher) : This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Marshall : Does my right hon. Friend agree that irresponsible wage claims unrelated to productivity will, if granted, lead to higher inflation, an erosion in the value of savings and the destruction of jobs?

The Prime Minister : My hon. Friend is quite right. If our wage costs rise faster than those of our competitors, our competitors will get the orders and the jobs. The movement of wage costs is disturbing. On the last available figures, for the second or third quarter of last year, United Kingdom wage costs were up by 6 per cent ; those of the United States were up by 2 per cent ; West Germany's were up by only 1 per cent ; Japan's were down by 1 per cent ; those of France were down by 3 per cent. and those of the Netherlands were down by 4 per cent. Those figures mean that all those concerned with getting orders and jobs in this country must have a careful look at keeping wage costs down.

Mr. Kinnock : Will the Prime Minister tell us how far she is prepared to blame herself and her Government's policies for the rate of inflation?

The Prime Minister : As the right hon. Gentleman is aware, we have made it quite clear that there was too much money in the system for our output and therefore steps had to be taken to correct it--and they are being taken. I should point out that a rate of inflation of 7.6 per cent. was regarded as so low by the previous Labour Government that they had ambitions to get down to it.

Mr. Kinnock : But when it is the Government's deliberate policy to keep mortgage rates and interest rates very high, to increase electricity prices and fares and shortly to impose both the business rate and the poll tax, is not the director general of the Confederation of British Industry absolutely right to say that inflation is the Government's fault?

The Prime Minister : No. Inflation happens when we have too much money in the system, which means that we are taking more out in money than we are putting in in output. That has to be corrected by two means. The first is by interest rates and the second is by keeping a tight fiscal policy. We are doing both.

Mr. Higgins : Will my right hon. Friend comment on the old-fashioned attitude of some trade union leaders who have not learnt lessons of the 1979-80? Will she reject the view that an increase in productivity automatically justifies a pay increase? It may be that productivity is rising in an industry but demand is falling. In those circumstances, a pay increase may not be justified.

The Prime Minister : I agree with my right hon. Friend. The first rule is that wage increases must not outstrip productivity. As my right hon. Friend said, the other rule

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is that increased productivity comes from substantially increased investment of capital, so there must be a return on capital. Another rule should be that increased productivity should result in price reductions. The consumer is entitled to reductions if we are to remain competitive.

Q2. Mr. Ron Davies : To ask the Prime Minister if she will list her official engagements for Thursday 11 January.

The Prime Minister : I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Davies : Can I remind the Prime Minister of the views that she expressed during a previous inustrial dispute? She said that she believed that the three emergency services--the police, the fire service and the ambulance crews--should have their pay negotiations taken out of the industrial arena and settled on the basis of a pay formula. Given the obvious merit of the ambulance crews' case, their overwhelming public support and the division in the ranks of the right hon. Lady's Government, is there any reason, other than her own love of confrontation, why there should not be a settlement of the ambulance dispute based on her own idea of a pay formula?

The Prime Minister : I do not accept the early part of the hon. Gentleman's comments. The ambulance crews' pay should be settled by reference to the NHS. The matter went before the Clegg commission, which rejected the claim that it should be settled on the same basis as the police and the firemen.

The pay claim dates back to last April. Some 84 per cent. of NHS employees settled last year's wage claims at 6.5 or 6.8 per cent. None of them were prepared to put the patients' interests at risk. It would be unfair to them to give in to those who refuse to settle through the Whitley council machinery.

Mrs. Maureen Hicks : My right hon. Friend may recall that at precisely this time last year I expressed my fear at the availability of crack spreading in our inner cities. One year later she will be aware of the escalation of the problem and the increased haulage of cocaine. In the light of those events, will she take the opportunity to reiterate the Government's determination to take every initiative possible to crack down on drug pushers? Does she have a message for young people who may be tempted to take drugs?

The Prime Minister : I agree that crack is a new and damaging form of cocaine. Last year Customs seized more cocaine than heroin, which shows that it is on the increase. We are co-operating, through the economic summit, to do everything possible to stop the laundering of the cash from drug trafficking. As my hon. Friend knows, we are supporting the efforts of President Barco of Colombia--


Hon. Members : We cannot hear.

The Prime Minister : Of course hon. Members cannot hear as they are making so much noise.

We are supporting those who wish to cut down the growing of and trafficking in cocaine in Latin America. There will be an international conference in London in the spring when, in conjunction with other Governments, we shall consider ways to try to cut the demand for drugs. We

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shall tell our young people about the dangers of taking drugs in the hope that we can prevent them from being tempted to take them.

Q3. Mr. Redmond : To ask the Prime Minister if she will list her official engagements for Thursday 11 January.

The Prime Minister : I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Redmond : Why is it that, according to ministerial answers, between now and the year 2013 the student loan scheme will cost the British taxpayer £2,170 million more than the present student grant scheme that it will replace?

The Prime Minister : There are obvious reasons. On a loan scheme, money is paid out for many years before money is returned. As it is returned-- [Interruption.]

Mr. Speaker : Order. It is impossible to hear.

The Prime Minister : I should hardly have thought that the hon. Member for Don Valley (Mr. Redmond) would need to ask the question. When the money is returned it will enable us to put more back into education.

Mr. David Howell : Given my right hon. Friend's absolute determination to defeat inflation, what does she think of the idea, apparently supported by the governor, deputy governor and former deputy governor of the Bank of England, that a statutory obligation to maintain the stability of money should be placed on the Bank of England?

The Prime Minister : That obligation should remain as part of the Government's duty. As my right hon. Friend knows, there are two ways of achieving the goal. The first is by keeping money tight, which can be done only by interest rates. Secondly, it could also be achieved by tight fiscal policy-- [Interruption.]

Mr. Speaker : Order. I am aware that there is a problem with the microphones. It is difficult to hear.

Q4. Mr. Campbell-Savours : To ask the Prime Minister if she will list her official engagements for Thursday 11 January.

The Prime Minister : I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Campbell-Savours : Does not the Prime Minister understand that if her policy is to increase interest and mortgage rates it is obvious that people at work will demand higher and higher wages to pay for those higher interest rates? Is it her view that there is no alternative to that strategy--if so, it means that the wage demand escalation taking place is irreversible--or does she have some other secret policy which she is unwilling to disclose to the House ; a sort of informal incomes policy based on the threat of higher and higher unemployment?

The Prime Minister : Wage costs and wage claims and their settlement are matters for industry. We hope that workers will take into account the fact that if wage costs price their products out of the market, workers price themselves out of jobs. The alternative to using the right policies to deal with inflation--interest rates and a tight fiscal policy--is to let inflation rip. That would result in far

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more unemployment than the steps we are presently taking, through which we have created more jobs in this country than ever before.

Q6. Mr. David Porter : To ask the Prime Minister if she will list her official engagements for Thursday 11 January.

The Prime Minister : I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Porter : As we are to some extent still a nation of shopkeepers and my right hon. Friend was born and brought up above the shop, as I was, what message does she have this week for those small businesses and shopkeepers worried about uniform business rates?

The Prime Minister : First, the amount raised from the business rate next year will be the same as this year plus inflation and, therefore, there will be no real increase in the business rate. My hon. Friend knows that there have been some changes in the business rate, one cause of which is the first rating revaluation since 1973. That has given rise to nearly three quarters of the increase in rates and would be an object lesson for anyone wanting to apply it to a domestic rating revaluation. My second point involves the way in which the business rate is collected. Because of those two factors the increases will be applied over a transitional period of at least five years so that the larger businesses do not pay more than 20 per cent. extra in real terms and the smaller ones no more than 15 per cent. in real terms each year during that period. It will be the first

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time that businesses have had an assurance about rates. It will be of great benefit to those manufacturing businesses and shops in the north and will help them to keep their costs down and get their jobs up.

Mr. Ashdown : While on the subject of shopkeepers, will the Prime Minister give her support to the "Parents Against Tobacco" campaign launched this week? Does she realise that its surveys reveal that more than 50 per cent. of shopkeepers are still prepared illegally to sell cigarettes to children under 16? What steps will she take to ensure that the law is enforced or, better still, strengthened, to provide an effective blockade between the tobacco industry and our children?

The Prime Minister : As the right hon. Gentleman knows, the law is enforced by the police. We have already taken some steps. For example, in conjunction with the European anti-cancer campaign, I announced a programme of £2 million for anti-smoking advertisements aimed at teenagers. That was launched on 11 December 1989. Although far too many young people between the ages of 11 and 15 still smoke, fortunately, the numbers are falling. Only about 8 per cent. smoke now, compared with 13 per cent. in 1984. We give our full support to the "Parents Against Tobacco" campaign. It will keep careful note of where cigarettes are sold to young children and give the information to the police. Knowledge of the campaign should already serve as an effective deterrent to those shopkeepers who perhaps do not take sufficient care to ensure that they do not infringe the law.

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