The welfare milk scheme, introduced in 1945, has benefited millions of children. Milk--nature's natural food--cannot be bettered. I welcome the Government's commitment that the scheme will continue. Milk roundspeople in my constituency feel that the proposed 10 per cent. reduction in the value of the tokens will come
Column 124solely from their business operations, yet the Department of Health stated that, following negotiations with milk producers' organisations, wholesalers and retailers, each would bear about one third of the total cost of the reduction. Why should milkmen complain if that were the case? They believe that the Department of Health is naive in thinking that milk wholesalers will be willing to buy milk tokens at a higher price than they would obtain if they surrendered them to the milk token surrender unit.
There are further consequences to consider in my constituency if the regulations are implemented without a guarantee that the price reduction will be shared equally. My constituency is made up of small communities. Delivery costs, therefore, are high. As some dairymen receive 15 per cent. of their income from token sales in poorer areas, they may have no choice but to cease operations.
If there is a reduction in the number of milk rounds that are willing or able to accept tokens, recipients of tokens will be forced to go to the shops where tokens are frequently accepted for goods other than milk. An increase in that practice would undermine the scheme and what it purports to achieve.
The Department's argument, that procedural changes will make reimbursement simpler, is unsubstantiated. I am told that the additional records that would be required by the Department would increase the administrative burden on all processors. I hope that my hon. Friend the Minister will assure us that he will review the workings of the regulations in a few months to ensure that they are working as he suggests and that the price reduction for milk tokens will be shared equally and not exclusively by milk roundsmen.
Mr. Graham Riddick (Colne Valley) : On a point of order, Mr. Speaker. I have now heard enough from hon. Members on both sides of the House to convince me that the scheme is flawed. Would it not be helpful if we were now to hear the Minister's explanation of why the scheme
Mr. Deputy Speaker (Mr. Harold Walker) : Order. That is not a point of order. When the Minister rises and seeks to catch my eye, that will be the appropriate time for me to consider whether he should be called.
Mr. Thomas McAvoy (Glasgow, Rutherglen) : I wholeheartedly endorse all that was said by my hon. Friend the Member for Newport, West (Mr. Flynn). The regulations will strike at the heart of a balanced system which, on the whole, has worked well and has been appreciated by those who have received the milk. The milk provided by the scheme for many of these people guarantees that they have some nutritious food. Anything that adversely affects the milk supplier must also affect the future viability of their involvement in the supply of welfare milk.
I am sponsored by the Co-operative movement. I am well aware of the commercial impact that the regulations will have on Co-operative and other milk suppliers. The scheme costs £80 million per annum. The Government are trying to save £8 million. The Co-operative movement, reflecting the philosophy upon which it was founded, is also concerned about the commercial implications of the Government's proposals and the well-being of the users of
Column 125the scheme. We have not been told why the Government have decided to make an arbitrary 10 per cent. cut. They have given no rational or logical explanation for it.
The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) referred to what happens in Scotland. The difference between the cost in London and that in the rest of the country is due to higher costs in the London area. Surely the Minister must be aware that in Scotland, in Wales and in many rural parts of England costs must be higher because of distance and terrain.
A letter from a civil servant to suppliers states that in certain circumstances, such as when a supplier has very high distribution costs, a higher reimbursement price will be paid. That seems to be the status quo. I join the hon. Member for Ross, Cromarty and Skye in asking for some clarification from the Minister about whether that applies to Scotland and whether it will continue as nothing in the regulations makes that clear.
The Government boast about the free market. Usually, Conservative Back Benchers do, too, but tonight it seems to be only the Government. They boast about the free market and then abuse their position by imposing the idea of a discount without any rational justification for reaching the level of that discount. Surely it is infantile to suggest that the Milk Marketing Board will volunteer to take a share of the cut. The Government know full well that the board will not offer to take a share.
Mr. McAvoy : Yes. A letter from one of the Co-operative organisations about sharing the grief makes it quite clear that if the Milk Marketing Board were invited to share the grief, it would certainly be a different sort of grief if Oftel were involved in those considerations. I am grateful to my hon. Friend for making that point.
There is no bulk delivery and no guaranteed continuity of supply. The Government quote a free market philosophy, but use their power to fix the market. That is despicable, particularly when it is used against small business men.
Occasionally Conservative Members have accused Labour Members of being too closely associated with clause four of the Labour party constitution. I am quite sure that tonight's vote will demonstrate another clause which is continually the refuge of Conservative Members trying to dodge responsibility for their actions. It is the suitability clause--"never mind the principles, the policy or the people, just do what suits us". That is the clause that many Conservative Members will follow tonight when they troop through the Lobby to support the Government.
The selling price of the milk must be a matter for individual dairy companies in open competition. The Dairy Trade Federation believes that the imposition by legislation of a fixed national discount will greately impede the viability of the welfare milk scheme. I believe that the measure is the start of the death by a thousand cuts of the welfare milk scheme. It is the Government's first step towards getting rid of the scheme. They can hardly find £2 million or £3 million here and there to cope with this, but I am sure that right hon. and
Column 126hon. Members on both sides of the House believe that it is the beginning of the end for the scheme, and that is disgraceful. 11.13 pm
Mr. Christopher Hawkins (High Peak) : I realise that time is short and I shall be very brief. I can save time by saying that I am sad that I cannot support the Government and I agree with the views expressed by my hon. Friends the Members for Calder Valley (Mr. Thompson) and for Batley and Spen (Mrs. Peacock).
I have been asked by my constituents to put three short questions to the Minister. First, why should the small dairies in my constituency carry the cost of a national welfare benefit? Secondly, why give milk tokens at all if the benefit will not be spent on milk as the tokens will be cashed instead? Thirdly, where did we find the imbeciles who have recommended such a crazy scheme?
So far everyone who has spoken has been against the measure and all outside bodies that made representations to me or to anyone else I have talked to also oppose the measure. If the Minister does not withdraw the measure tonight, despite the unanimous opposition, what does he think is the purpose of this Chamber?
Mr. John Battle (Leeds, West) : It is clear that the scheme has been ill-thought out and shoddily proposed. As hon. Members have said, it was implemented yesterday, yet tonight we are debating the regulations for implementing it. That is completely the wrong way to legislate.
The comment of the hon. Member for Tiverton (Mr. Maxwell-Hyslop) that the scheme has been shunted from the Department of Social Security to the Department of Health came as a surprise to me. I thought that the Department of Health was the big-spending Department and was not involved in pound pinching or cuts. The Under-Secretary of State for Health may say that he needs this money to settle a current industrial dispute, but I cannot believe that that is the reason. The Government have a budget surplus of £20 billion, so why do they need to save £7.5 million through this scheme?
The scheme has been going for 40 years and is dependent on one-man businesses. I have received a letter from John Healy, a milkman in Wortley, which says :
"I collect around 30 Tokens a week which is about £63. I am writing to object in the strongest manner to the way this issue has been handled without any consultations or consideration to its effect". That is precisely the point. The most vulnerable groups in society--single parents in receipt of family credit with children under five, the long-term unemployed and pregnant women--are provided with the benefit of the weekly token. The Government say : "The entitlement of beneficiaries to welfare milk is not affected by this change"--[ Official Report , 24 January 1990 ; Vol. 165, c. 714 .]
That was said in reply to a question tabled by my hon. Friend the Member for Caerphilly (Mr. Davies), so we are entitled to say, "Their entitlement may not be affected, but from where will they pick up their entitlement?"-- because this will mean the end of the doorstep delivery.
The dairies have said that there can be no economies of scale. Associated Dairies wrote to me saying :
"Welfare milk is provided pint by pint to individual households and costs the same to distribute as other milk."
Column 127Milkmen will refuse to deliver welfare milk for tokens. As my hon. Friend the Member for Glasgow, Rutherglen (Mr. McAvoy) said, the cost of the change cannot be passed down the chain. Can the Milk Marketing Board legally pick up the tab for the change?
We are debating a pound-pinching measure. We should be concerned to preserve one of the great British institutions--the doorstep pinta. Conservative Members resisted EC proposals to get rid of the doorstep pinta, yet this proposal will have the same effect if it is passed. I urge the Minister to give us a last-minute reprieve.
The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman) : Three major concerns have been expressed by Labour Memberand by my hon. Friends, who spoke forcefully and with great authority in this brief debate. They were mentioned initially by the hon. Member for Newport, West (Mr. Flynn) and were touched on by my hon. Friends the Members for Batley and Spen (Mrs. Peacock) and for High Peak (Mr. Hawkins). In the short time available, I shall seek to answer not only their concerns but the other points that were made. The first concern was whether the regulations would damage the welfare milk scheme. The Government do not intend to harm the beneficiaries of the scheme. We do not intend to add to the burdens or diminish the value of the scheme ; there is no hidden agenda to remove or modify it.
The second concern was that the regulations will place an unreasonable burden on the milkman. We do not seek to place a burden or inequitable share of the discount on the milkman.
The third concern was that £8 million is an insignificant sum. That is equivalent to about £40,000 per district health authority, or three extra nurses. The money comes out of the Department of Health vote, and I do not think that it is an insignificant sum. I apologise to my hon. Friend the Member for Sherwood (Mr. Stewart) for the unacceptably late reply. As a Minister, I accept responsibility for it, and I shall look into it. The fact that the Department of Health has to answer 30,000 letters from Members of Parliament each year is no excuse, and I apologise unreservedly for the delay.
Let me deal with the welfare milk scheme. We have no intention to alter that and the proposals will have no effect on the right of beneficiaries under that scheme. As the hon. Member for Newport, West said, it benefits children under the age of five, pregnant mums in families drawing income support, and handicapped children aged from five to 16--some 800,000 beneficiaries in all. It is an important scheme and we have no intention of changing it.
My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) asked why I was to reply to the debate rather than a Minister from the Department of Social Security. The answer is that the scheme is financed from my Department's vote. It costs £80 million for Great Britain, paid for by the various health Departments. It is an important programme, providing nutrition--that is its purpose--to families and children, and accounts for about 2.5 per cent. of all liquid milk produced on our farms.
We are not basing our argument on the fact that we are a bulk purchaser. Unlike Sainsbury's, for example, we are
Column 128not a bulk purchaser because the milk is delivered in individual pints. But we argue--and we have sought the advice of our consultants, Handley Walker--that without the welfare milk scheme some extra sales, although not all the welfare milk scheme sales, would be lost. If the argument advanced by my hon. Friend the Member for Tiverton were pursued to its logical conclusion and the Department of Social Security made a cash payment to the appropriate families, not all that money would be spent on welfare milk. We estimate that about £20 million of contribution to overheads and profits can conservatively be attributed to the scheme. That is equivalent to about 0.3 per cent. of total milk turnover.
Our proposals envisage a saving of about 10 per cent. on that £80 million cost--about £8 million--and that is less than half of our estimate of the additional contribution to profits and overheads that the whole of the milk industry makes from the operation of the scheme--through the Department of Health, as opposed to the Department of Social Security, vote. We therefore propose a 3p discount on the 30p pint delivered in most of the country and the 31p pint in London, with a resulting cost per pint of 28p in London. In reply to the hon. Members for Glasgow, Rutherglen (Mr. McAvoy) and for Ross, Cromarty and Skye (Mr. Kennedy), I can say that separate provisions are made for parts of the country where the regular cost of sale is significantly higher, and the discount would operate off that higher price. The 27p price that I have cited for most of England would not apply in those instances. The discount of 10 per cent. would be taken off the larger sum.
The central point of Opposition Members' arguments turned on the question of who should bear the cost of the discount of £7.5 million to £8 million, which benefits patient care. At present the cost is being recycled in the Department of Health vote. In answer to the right hon. Member for Morley and Leeds, South (Mr. Rees) and others, the Department of Health strongly believes that the burden of the discount should be borne equitably among the producer, the processor and the distributor--I shall refer to each briefly--not the family beneficiaries through a specific delivery charge. My hon. Friend the Member for Calder Valley (Mr. Thompson) is quite right to draw attention to regulation 5. Although we do not countenance a specific charge on the beneficiaries, a general delivery charge applied to all customers is a matter between the milkmen and their customers. That is not dealt with in the regulations.
We believe that negotiations between the Milk Marketing Board and the Dairy Trade Federation should commence promptly. A mechanism exists--through the statutory joint committee--for the very modest reduction in price that would be implied by the farmer--the producer--bearing an equitable proportion of the discount. The independent deliveryman would account for 40 per cent. of the total distribution element for milk. He should bear only an equitable part of the total discount. He should pass on the other part of the discount--which we argue that the farmer and the processor should bear--either by getting his milk cheaper or by the processor--the bottler--paying a premium on the redemption of the tokens.
Column 129Mr. Hawkins : Does not my hon. Friend believe that the Government have a responsibility to sort out who pays for the scheme before they ask the House to approve the regulations?
Mr. Freeman : I will give the assurance asked for by my hon. Friends the Members for High Peak and for Sherwood and others. The regulations come before the House regularly because they must be amended. Unless there is evidence of the principle that I have outlined tonight--an equitable sharing of distribution of that modest burden between the producer, the bottler and the deliveryman--I give an undertaking that we will review the regulations.
Mr. Max Madden (Bradford, West) : The Minister seems to be struggling to defend the indefensible and the assurance that he has just given is not good enough. Will he give a clear assurance that if the burden is not shared fairly between the three sectors to which he has referred, and if we show within three months that dairymen are losing up to £40 or £50 a week, will he agree to scrap the regulations and reintroduce the status quo with which everyone is satisfied? No one can understand why the Minister is fiddling about with the regulations in this way.
Mr. Freeman : I repeat the assurance that I gave to my hon. Friends who pressed me on that point. If the burden is not being shared in the equitable fashion that I have outlined, we will review the regulations and doubtless the issue will be debated again in the House.
A few days ago I had the great privilege of discussing our Parliament with the aspiring members of the new Government in Bucharest and I spoke with pride to the people who expect to be running the country in a few months. I spoke to them in the same way that I have spoken to people in Budapest. I cannot send the Hansard report of tonight's debate to such newly democratised countries with any pride.
In this debate hon. Members from all parties have denounced the regulations. Conservative Members described them as damaging, ill- conceived, flawed and even crazy.
The regulations will be a disgrace to our statute book and a dishonour to democracy. They will cause damage, downgrading and cheating. Even at this late hour and in the event of the regulations being passed, I beg the Government to review them at the earliest possible date.
Mr. Elliot Morley (Glanford and Scunthorpe) : I shall try to be helpful to the Minister in the final minute of the debate. Will the Minister consider using some of the money that will be robbed from milkmen as a result of the regulations to promote the scheme--it operates within the welfare milk regulations--which enables every state nursery with
Column 130under-fives to claim free milk for them? The Minister is refusing to promote that scheme--he is making local county councils apply individually. Although those authorities that care about their under-fives make such an application, many others are unaware of the scheme. Given the benefits of milk to young children, why does he not promote it?
It being half-past Eleven o'clock, Mr. Deputy Speaker-- put the Question, pursuant to Standing Order No. 15 (Prayers against statutory instruments, &c. (negative procedure) ) :--
The House divided : Ayes 117, Noes 149.
Division No. 54] [11.30 pm
Archer, Rt Hon Peter
Barnes, Harry (Derbyshire NE)
Benn, Rt Hon Tony
Bennett, A. F. (D'nt'n & R'dish)
Brown, Gordon (D'mline E)
Brown, Nicholas (Newcastle E)
Bruce, Malcolm (Gordon)
Campbell, Menzies (Fife NE)
Campbell, Ron (Blyth Valley)
Campbell-Savours, D. N.
Carlile, Alex (Mont'g)
Clark, Dr David (S Shields)
Clarke, Tom (Monklands W)
Clwyd, Mrs Ann
Cook, Robin (Livingston)
Davies, Ron (Caerphilly)
Davis, Terry (B'ham Hodge H'l)
Duffy, A. E. P.
Evans, John (St Helens N)
Field, Frank (Birkenhead)
Fields, Terry (L'pool B G'n)
Golding, Mrs Llin
Griffiths, Win (Bridgend)
Home Robertson, John
Howarth, George (Knowsley N)
Hughes, John (Coventry NE)
Hughes, Robert (Aberdeen N)
Hughes, Simon (Southwark)
Jones, Ieuan (Ynys Mo n)
Jones, Martyn (Clwyd S W)
Lloyd, Tony (Stretford)
McKay, Allen (Barnsley West)
Mahon, Mrs Alice
Marshall, David (Shettleston)
Martin, Michael J. (Springburn)
Michie, Bill (Sheffield Heeley)
Moonie, Dr Lewis
Peacock, Mrs Elizabeth
Pike, Peter L.
Quin, Ms Joyce
Rees, Rt Hon Merlyn
Reid, Dr John
Shore, Rt Hon Peter
Smith, Andrew (Oxford E)
Taylor, Mrs Ann (Dewsbury)
Wareing, Robert N.
Watson, Mike (Glasgow, C)
Welsh, Michael (Doncaster N)
Williams, Alan W. (Carm'then)
Winterton, Mrs Ann
Wise, Mrs Audrey
Tellers for the Ayes :
Mr. Frank Haynes and
Mr. Ken Eastham.