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Column 1174to create a programme for the prevention of stress and a comprehensive package of care in the workplace. Where stress had not been prevented, it was necessary to ensure that sympathetic policies were followed so that individuals suffering from mental stress were able to continue in work, either full time or part time, as described in detail by my hon. Friend the Member for Motherwell, South. I shall deal now with the discrimination suffered by citizens with a disability such as manic depression. My hon. Friend the Member for Motherwell, South spent a great deal of time outlining the problem, and rightly so. The level of discrimination against those suffering from mental illness or a perceived mental illness is a challenge for policy makers of all political persuasion. One and a half million people with disabilities are without a job and are not in training. People with a psychiatric history experience severe discrimination in the employment market. Those recovering from mental distress need help to find ways back to work and may need support in the workplace so that they can work on equal terms with other employees. A survey of users and ex-users of mental health services carried out by MIND, the National Association for Mental Health, found that there was a massive exclusion of such people from the workplace as a mental health disability was seen as relevant to the ability to do a job. Sixty-three per cent. of people felt that their job prospects were affected by their history while the unemployment rate among ex-patients was found to be sometimes as high as a staggering 62 per cent. The most poignant fact to come out of the survey was that one third of those suffering from mental stress said that finding a job was the single most important thing that could assist them back to health and help them to regain their dignity.
Why is employment such a low priority for health and social services funding? Users of mental health services regard employment and training as high priorities, but, of the 554 projects funded by the mental illness specific grant, only 19 are employment related. That is a travesty, and the problem is compounded by the fact that the Employment Service restricts the funding of rehabilitation programmes to 13 weeks' crude targeting of the funding criteria. It is leading to severe discrimination against users and former users of mental health services.
There is a danger under community care that the Government will declare that many people are too well to be dealt with by the health services but too unemployable to be helped by the Employment Service, which means that they will fall between two stools and fail to get access to employment and training opportunities.
People suffering from mental illness require the Government to initiate an action plan. They need urgent policy initiatives by the Departments of Employment, Health and the Environment to rectify the lack of co-operation between Government-funded agencies and to provide employment and training opportunities. We need a redefinition of mental distress at work as an occupational health issue, which would mean enforceable codes of good practice involving support at work. I shall explain what is required in a moment, but it is important at this stage to point out that, as my hon. Friend the Member for Motherwell, South said, there are employers--large and small--that already have in place model agreements with their work force to ensure that
Column 1175there is a policy for the prevention of stress and mental illness and that, when people are suffering, there is a code of practice agreed between the employers and employees.
The Post Office has one of those codes of practice, which I advise other employers to read. It represents a way forward with regard to preventing mental stress or dealing with it so as to ensure continuity of employment for the individuals concerned, if possible, or at least to ensure that they are treated with dignity in the workplace during a period of mental stress.
The first aspect of the code is interesting, as it clearly shows the responsibility of the Health and Safety Executive, through the Health and Safety at Work, etc. Act 1974. It says:
"The parties to this agreement recognise that stress at work is a health and safety problem and that employers have a duty under Section 2 of the Health and Safety at Work Act to take all reasonably practicable measures to prevent stress at work. Under Section 7 of the Act employees have a duty not to endanger themselves or others and to co-operate with their employer in meeting statutory requirements."
The Post Office is an employer that implicitly accepts that causing mental stress and mental illness at work because of poor conditions of employment is a breach of health and safety legislation. It is to be commended for accepting that responsibility.
The code says much more. It specifically sets out positive measures that the employer will take to ensure that an individual suffering from mental stress can remain in the workplace during a period of treatment, with opportunities to work full or part time, by agreement. There are also practical measures to be taken by the employer to eradicate aspects of workplace activity that are leading to mental stress or to an escalation of mental stress, culminating in illness. That is a major step forward and the Post Office, and its employees represented through their unions, are to be congratulated on that model agreement.
Some of the other aspects of an action plan to ensure good support and good practice at work are as follows: extending paid sick leave; provision for retraining or other assistance to enable an individual to continue his or her job or to undertake another job; contacting appropriate Government services and health services for advice, and discussing with an employee whether he or she can continue in the same job or needs to receive special assistance to continue in work. Counselling, too, must be a major aspect of that activity. Those employed in counselling by the employer must, none the less, be independent of the employer and must provide a confidential counselling service to the individual concerned.
There should be provision for special arrangements when employees return to work--for example, flexibility in the times of leaving and arrival; a phased return to work, allowing individuals to come back, probably part time, extending attendance to full time later; extending rest periods for people who wish to continue in work while receiving treatment for their illness, which may be stress related; and exploring the possibility of finding an alternative job, or part-time work, when an employee is unable to continue with his or her existing job.
Those are all practical ideas, and if they were adopted by most employers in the United Kingdom, they would go a long way towards meeting many of the needs described by my hon. Friend the Member for Motherwell,
Column 1176South on behalf of sufferers from depression who are in employment and wish to remain in employment, or who are out of work but wish to return to the work force.
It is also important to examine other aspects of the way in which we organise our employment and training services in the community, to ensure that those services are designed to meet the needs of people with disabilities, especially people who suffer from mental illness or mental stress from time to time. The Department of Employment must act as a facilitator and catalyst at the local level to bring together the Department, local authorities and other agencies to ensure that there is a strategic responsibility at local level for collaboration on, and provision of, specialist resources for employment opportunities for people with mental illness. There must be a direct link between health, social care and employment. As I said earlier, the report by MIND stated that one of the most important aspects of the social care of mental illness was the ability to have access to training and worthwhile employment; bringing social care and employment together had a dramatic effect in improving an individual's overall health. That is particularly important for people who suffer from manic depression.
To help mental health services users become involved in, or to re-enter, the labour market, all training and enterprise councils should employ specialist disablement resettlement officers. I support the TEC movement and I know that many TECs do that. However, determining the level of that input in a particular TEC is usually left to a reliance on the keenness of the individuals on the ground. We must ensure that such provision does not simply rely on a commitment at local level by individuals in a TEC. All TECs must have minimum levels of standards in terms of the deployment of disablement resettlement officers to ensure that there is a coherent strategic approach to retraining and re-entry to the marketplace by people suffering from mental illness.
It is therefore important to consider the record of TECs in the provision for disabled people. Where we can improve things, we should surely do that. We should give TECs tasks with regard to this difficult area of the employment market. We should clearly define the right to quality assessment of rehabilitation and training for work or college-based schemes for people with mental illness. It is essential that they can enter, and have easy access to, training, but it must be quality training and it must fit in with the employment needs of the individual.
There is nothing worse than for someone suffering from a mental illness to be put into a scheme that is going nowhere and has poor training and, at the end of it, poor opportunities for entering the marketplace and for getting employment. That is a rejection and it undermines the well-being and mental health of the person concerned. For many people who have suffered mental illness in the past and are looking for a way back into the workplace, proper training schemes are an important aspect of that rehabilitation programme. I would welcome the Minister of State's comments on the specific action that she would like TECs to take to become involved in that aspect of activity with regard to mental stress at work and getting people with mental illness back into the workplace.
My hon. Friend the Member for Motherwell, South quite rightly raised the issue of anti-discrimination legislation. We look forward to seeing precisely what is
Column 1177in the Government's mind with regard to their Bill this Session. As a minimum standard, I hope that it will ensure the prohibition of discrimination in respect of selection, promotion or dismissal of people suffering from mental stress in employment.
It is important that the Government use that Bill as a clear message to employers not to use mental stress as an easy means to sack employees. Instead, employers should take the positive attitude of prevention of mental stress at work and model agreements between themselves and the employees and employee representatives to ensure that, when mental stress arises, it is eradicated and that it is not, in any circumstances, used as an easy method of dispensing with individuals or a group of individuals in the workplace.
The marginalisation and exclusion of people with a mental health problem, or a perceived mental illness, from the labour market is an overwhelmingly significant factor in undermining their rights to participate in society as a whole. In 1995 and for the remainder of the decade, we will still see, tragically, the continuation of the mass lock-out of people with a mental illness. We will also see the insidious and damaging health effects of long -term mass unemployment.
Of the 1 million people in the United Kingdom who have been unemployed for more than a year, many have experienced or will experience an impairment of their mental health--distress, feelings of depression, anxiety, irritability, sleep loss, inability to concentrate, a lack of or loss of confidence, and a strain in close personal relationships. They are direct consequences of unemployment and the Government's failure in labour force strategies.
It is an appalling indictment that young people may be passive about their plight in terms of unemployment, but that belies the major strains in family relationships and deep-seated feelings of anger which will eventually manifest themselves in individual or collective actions of hostility. Alienation is linked like an umbilical cord to mental health and suicide. The suicide figures, as my hon. Friend said, are a sobering indictment on society. Many young people feel total hopelessness about their lives and their ability to be seen as a meaningful part of society, and they end up taking their lives because of the alienation of unemployment in the community. I hope that I have demonstrated that the Labour party is genuinely in the business of advocating co-operation with employers, employees, users and ex-users of mental health services, to ensure appropriate, genuine access, free from discrimination, to training, rehabilitation and employment opportunities. I hope that the Minister will rise to the occasion and give a clear indication that the Government, at long last, will take seriously the growing scandal of mental stress at work and, with it, the cost in human terms and to the British economy.
The Minister of State, Department of Employment (Miss Ann Widdecombe): I congratulate the hon. Member for Motherwell, South (Dr. Bray) on obtaining the debate and on using it for the purpose that he chose. He put his case in a sensitive, moderate and thoughtful way, which contrasted somewhat with the ranting which emanated from the Opposition Front Bench.
Column 1178Before addressing the general issues surrounding mental illness and manic depression in so far as they relate to employment, I shall refer to some specific points that have been raised. One or two specific points were more properly for my right hon. Friend the Secretary of State for Health, my right hon. Friend the Secretary of State for Education with respect to one point, and my hon. Friend the Minister for Social Security and Disabled People. Nevertheless, because there is rather more interdepartmental co-operation than the Opposition spokesman gave us credit for, I will be able to answer other points raised under those other departmental responsibilities. Clearly, how the consultative document will translate into law is a matter on which I cannot give detailed advance notice tonight, even if I had all the details at my disposal. However, there will indeed be guidance to employers about the implications of employing people with different types of mental illness and the types of reasonable adjustment that could be made in respect of employing them. We do not yet know whether that will be guidance or a formal code, as the hon. Gentleman requested, but there will be guidance, and it will not just be on mental illness en bloc. There will be guidance in respect of different types of mental illness. I hope that the hon. Gentleman is reassured on that point.
I support what the hon. Gentleman said about the public perception of depression. I think that that spills over into employers' perceptions of depression and how it affects the individual's ability to work. I hope that the disability legislation which we will be introducing in the current Session will focus employers' minds on the issue.
The hon. Gentleman raised the question of access to work and suggested that, whereas the scheme does very well by the physically disabled, perhaps it is less efficient in assisting those with mental illness. The scheme makes provision for support workers to attend in the workplace people with mental problems, or those who have had problems in the past. The support workers smooth people's transition into work, set up communications with colleagues and support them when they perhaps feel uncertain in the early stages.
However, the Government are always interested to hear further suggestions about what else the access to work scheme could provide. It is a highly successful scheme which has been broadly welcomed and generally praised, and we would be delighted to consider any suggested refinements to it. I am always willing to receive representations from the hon. Gentleman, either by correspondence or in person-- as I told him earlier in the day.
The hon. Gentleman drew a comparison between a prisoner and a mental patient in terms of the information that must be revealed when applying for employment. He suggested that mental conditions did not need to be declared after five years. I point out to him that, even in the case of discharged prisoners, in some occupations it is possible to make inquiries about a person's previous convictions. I am sure he will agree that one cannot make a sweeping generalisation: in certain circumstances-- particularly where the safety of others is concerned-- it may be appropriate to inquire about someone's medical history, including his or her mental medical history.
Column 1179The hon. Gentleman asked for a clear legal framework on discrimination. I hope that he will not be disappointed with the Government's disability legislation. He queried whether tribunals were the best place to hear claims for discrimination on grounds of mental disability.
The advantages of tribunals are that they are cheap, informal and, despite the hon. Gentleman's reservations, they are probably the simplest court in which to operate. It is possible to be represented either fully legally or at a lesser level, and I think that, if we are to make sense of anti- discrimination laws as they apply to disability, our tribunals already have ample experience in interpreting the niceties of discrimination law in respect of sex and race. Those bodies have experience in dealing with both employers and complainants.
Obviously at the moment I cannot set out the details of what redress will be available to complainants, how it will be available, and what the procedures will be. That will be made known when the legislation is finalised and brought before the House.
The hon. Gentleman queried the working of the disability working allowance. I share his disappointment at the low take-up generally--quite apart from the low take-up among those with mental illnesses. The figure is somewhat higher than he suggested: it is now 4,562. The Policy Studies Institute has released an encouraging report which states that, although take-up is low, the trend seems to show that the allowance is reaching the people whom it is meant to target. There is a note of cautious optimism there. Nevertheless, the Government have seized on the fact that the take-up of disability working allowance has not been as rapid or impressive as we would have liked. Therefore, various initiatives have been taken to ensure that DWA customers are better off in work rather than, as the hon. Gentleman suggested, possibly facing some sort of poverty trap. We have now raised the threshold for single people from £43 to £54.75 a week. When that is implemented, it will raise the point at which single people float off DWA from just over £108 a week to £120 a week. We have also addressed the rate for couples and lone parents, whose allowances will be increased from £63.75 to £73.40 a week. We have also decided that DWA recipients with less than £8,000 in savings will now qualify for remission from NHS charges, bringing them into line with those receiving income support and family credit.
We have also adjusted child care elements. Earnings up to £40 a week will now not be taken into account when we calculate entitlement to family credit, housing benefit, council tax benefit and DWA. There have been various other initiatives which I will not go through in detail. I shall write to the hon. Gentleman about those if he is interested.
The hon. Gentleman also raised the question of the statutory instrument which has been laid, and the issue of the procedures which those claiming invalidity benefit must go through if they are mentally--
Miss Widdecombe: The hon. Gentleman is quite right. He raised the issue of the procedures that those claiming incapacity benefit have to go through if they are suffering from mental illness or disability. It is true that those procedures were not specified in the regulations, as it was not believed to be necessary to do so. It was never
Column 1180intended that the same questionnaires would have to be filled in by those suffering from mental illness. My hon. Friend the Minister for Social Security and Disabled People has written to the Royal College of Psychiatrists to offer reassurance on that point and to say that, since the matter has caused concern, the explanation will now be made explicit through necessary amendments.
Miss Widdecombe: I will have to write to the hon. Gentleman on that point, as that is the responsibility of my hon. Friend the Minister for Social Security and Disabled People. I have been told that he has written today to the Royal College of Psychiatrists to offer the necessary reassurances, and to make it clear that those would be made explicit. I cannot comment on the exact nature of the wording to the hon. Gentleman and therefore I will have to write to him. I also entirely endorse the hon. Gentleman's support for supported employment and for sheltered workshops. I very much value those schemes, as do the Government. I endorse what he says about the efficiency of the schemes in dealing with people who are suffering from the type of disability that he mentioned.
I turn now--with some reluctance, I must admit--to the speech of the hon. Member for Makerfield (Mr. McCartney). May I first congratulate him on his appointment, and secondly apologise for just not noticing him? He and I share one disadvantage, which is that when we are sitting behind the Dispatch Box, we disappear.
Having noticed the hon. Gentleman and listened to his speech, I must say that I thought it introduced a jarring note into what had been, up to that point, a series debate. The hon. Gentleman tried to lay the blame for mental illness, suicide and just about every other disaster which could befall an individual at the door of the Conservative Government. I regard that as a trivialisation of an extremely serious subject, which had been receiving a proper debate in the House until that moment.
Mr. McCartney rose --
Since the hon. Gentleman raised so many issues, some of them should be addressed. We heard the old myth that part-time work is a source of stress and is somehow second-rate work. That assumption completely ignores the results of the labour force survey, which is completely independent and is not written by the Government. That survey found that 87 per cent. of those who are in part-time work are not in that work because they could not find a full-time job. I should have thought that, given
Column 1181the subject of the debate, the hon. Gentleman would have welcomed the availability of part-time work because it offers opportunities for precisely the type of people we have been talking about--people suffering from specific types of illness--to ease themselves back gently into the workplace.
The hon. Gentleman then said that the British feel very much worse than their European colleagues because of their employment situation. What an extraordinary comment, when we have a lower than average European unemployment rate and a high percentage of part-time work. It is all very well making comparisons of how workers feel appreciated at work, but the first and most important thing is to ensure that they have work in the first place. We appear to be doing rather well on that point.
The hon. Gentleman then called for a proper Government strategy. I can only conclude that he has never read "The Health of the Nation", in which we made mental illness one of the five key areas; set targets for improving the health and social functioning of mentally ill people; set a target to reduce the suicide rate of the mentally ill by 33 per cent. by 2000; and set out a three-year public information strategy to try to combat stigma and attitudes, in which we aim to increase understanding, reduce stigma and help users to understand their rights and responsibilities.
The hon. Gentleman then raised the issue of training--at that point I had sympathy with his remarks. The training and enterprise councils operating agreement requires TECs to ensure that suitable high-quality training for work is made available to all participants who are shown by assessment to have disabilities or other special needs. That specifically includes people with mental health problems. I agree with him that we must monitor that agreement carefully to ensure that it is realised in the practice as much as in the theory. I share that aspiration.
People with disabilities, including those with mental health problems, are eligible for training for work, regardless of how long they have been unemployed. They also have recruitment priority for suitable places. About 11 per cent. of people who start training for work have a disability; that is an encouraging statistic, but it is one on which we could obviously build.
The hon. Gentleman spoke about interdepartmental co-operation. An inter- agency group has been set up by the Government, which advises on improving mental health in the workplace. The Government are working to improve employers' awareness of mental health issues. In November 1994, which was not a million years ago, we published the "ABC of Mental Health in the Work Place". In October, the Secretary of State chose the subject of mental health to speak on at the Confederation of British Industry conference. In July, the Department of Health ran a stand on mental health in rural areas at the royal agricultural show. None of that detailed attention is the mark of a Government who are ignoring the issue.
Column 1182I should now like to consider the serious speech of the debate and to answer the points raised by the hon. Member for Motherwell, South. We recognise that manic depression is a serious mental illness and a serious disability. It causes profound changes in mood. It can swing an individual from severe depression and deep lethargy to high elation and over-activity. Such mood changes significantly affect a person's ability to function in all aspects of life, including the workplace. The illness typically follows the pattern of remission and relapse, but it can generally be controlled by mood-stabilising medication. Consequently, people who even have severe manic depression can often function perfectly well for much of the time. People who have the illness are covered by the same employment legislation as those with other disabilities and they can benefit from Government help that is available to disabled people in the labour market. Current legislation on the employment of disabled people is contained in the disabled persons employment legislation that we introduced this year, under which the quota scheme was established. Hon. Members may recall that the scheme imposes a duty on all employers with 20 or more employees to employ registered disabled people as 3 per cent. of those employed. It is abundantly clear, however, that the scheme is not working as intended and does not meet the needs of disabled people.
The quota scheme does not take account of people who become disabled while in employment as the enforceable duties relate only to recruitment and dismissal. In addition, many disabled people think that the entire approach of the scheme stereotypes and stigmatises them.
People with disabilities are increasingly asserting the wish to be treated as individuals and to train and work alongside non-disabled people. They wish to earn their own living in productive jobs on the basis of their abilities. This change in the aspirations of disabled people has increased their reluctance to register as disabled. There are now only about 1 per cent. of registered disabled people in the labour force, many fewer than would allow the 3 per cent. quota to operate as it was originally designed.
My hon. Friend the Minister with responsibilities for disabled people has therefore announced that we intend to replace the quota scheme with a new statutory right that will protect disabled people from unjustifiable discrimination in employment. We know from the response to our consultation document, which was published in July, that the measure will win the support of many disabled people and their representatives. It will be a major step forward in improving the work position of people with disabilities.
The legislation that we propose to introduce will make it unlawful for an employer to treat a disabled person less favourably than a non-disabled person unless there are justifiable reasons for the difference of treatment. Employers will be required to make a reasonable adjustment to the workplace or to working practices where to do so would help to overcome the practical effects of an individual disability.
Under that legislation, disabled people who consider that they have been the victims of discrimination in employment will be able to make a complaint to an industrial tribunal, as I have already said. The proposals and remedies will be broadly the same as those in relation to complaints under other discrimination legislation. The
Column 1183Advisory, Conciliation and Arbitration Service will similarly offer the full range of its conciliatory services. We shall be consulting on a statutory code of practice to accompany the new Bill. We shall take into account representations such as those made by the hon. Member for Motherwell, South this evening. The consultation will be painstaking and thorough. We shall want to be sure that the code takes account of the views and needs of the fullest range of people with disabilities and their representative organisations, and of employers, on good employment practice.
Dr. Bray: I am glad to hear the Minister's intentions. I hope that she will listen also to my hon. Friend the Member for Makerfield (Mr. McCartney). I assure the hon. Lady that he is a sensitive, active and able advocate on behalf of the causes of which she is speaking.
Miss Widdecombe: I recognise the hon. Gentleman's courtesy to his colleague. I shall read what the hon. Member for Makerfield said. If I can extract anything from it that appears to be a sensible proposal, I shall, of course, take it into account. Most of it, however, will be lost in the rhetoric of how the Government are responsible for all ills.
The new right will apply to persons with a physical or mental impairment that is long term or recurring and has a substantial effect on the person's ability to carry out normal day-to-day activities. It will not, therefore, apply to someone with a temporary disability, such as a broken leg, but people with a long-term substantial or recurring depressive illness--hence manic depression--would be covered.
More generally, the Government would always encourage employers to treat all their employees with the consideration due to them, and to adopt fair and objective personnel policies which maintain a high degree of employee morale and commitment. A comprehensive framework of statutory employment protection rights exists
Column 1184to safeguard employees against unreasonable treatment by their employers, and naturally that applies to individuals with a disability in the same way as it does to other employees. The Government have recently extended and enhanced those rights, including especially provisions in the Trade Union Reform and Employment Rights Act 1993.
We are committed to safeguarding legitimate rights of employees, but we must be careful not to damage employment opportunities by imposing excessive financial and administrative burdens on employers. We are satisfied that the current employment protection legislation strikes the correct balance between the rights of employees and the costs to employers, but we stand by our long-term policy of educating and persuading employers to implement good practice in the employment of disabled people.
We aim to enable disabled people to progress as far and as fast as their talents and capabilities allow. The Employment Service network of placing, assessment and counselling teams will continue their work with employers, providing specialist advice and helping them to adopt good policies and practices. Significant progress has already been made, with more than 950 employers now using the disability symbol--twice as many as did so this time last year.
We have debated much tonight about what should be done, but perhaps one should also consider what has been achieved and pay tribute to that. I believe that the introduction of disability working allowance, the carer's premium in income support, the improvements that we made during the passage of the TURER Act, the disability symbol, the work done by placing, assessment and counselling teams and the continuing support that we give to Remploy and other organisations provide solid evidence of our commitment to disabled people. More than 53,000 disabled people were helped to find work last year by Employment Service advisers.
The debate has been useful, and for the most part constructive. I repeat my congratulations to the hon. Member for Motherwell, South. I am glad to be able to share many of his aspirations and I hope that, in turn, he will give a genuine and enthusiastic welcome when our Disability Bill comes before the House.
Mr. Michael Colvin (Romsey and Waterside): I am pleased, as a result of the luck of the draw, to speak so early in the Adjournment debate following the Consolidated Fund measures, when the House voted a further total of about £146 million for Government expenditure by various Departments of State. If my hon. Friend the Member for Tiverton (Mrs. Browning), the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, who is to reply to the debate, could have won just one tenth of that amount for the pig farmers of this country, my speech would not be necessary.
It is no bad thing to start a speech with an undisputed fact. British farmers are the most efficient in the world. However, farmers everywhere have a reputation for being prophets of gloom. Even so, no one can deny-- not even I, as a farmer, and one with an interest to declare in that respect, though not as a pig farmer--that in the past two years agriculture has received considerable benefits from the devaluation of the green pound and that on the whole business has been very good. Arable farmers did well this summer because the weather was kind for once.
Things have not, however, been good for the pig industry, whose fortunes are very low at present. Peaks and troughs have always been a feature of pig farming, but the current trough has been deeper and longer than any others that I can remember. Pig producers financial losses, coupled with existing and pending legislation on nitrates in water, slurry storage and sow stalls is making them consider carefully whether they can continue as pig farmers.
It was clear to me from talking to pig farmers in my constituency only last Friday that specialist pig producers are losing money for the second year running and some may even face bankruptcy. Many of them farm on quite a small scale and quite small acreages and do not have the luxury of being able to diversify into other farm enterprises.
The continuing low level of pigmeat prices has been largely due to a long period of oversupply. The pig herds of European Union states have increased, while here the size of the herd has remained static. The latest EU survey now anticipates a Community-wide fall in the breeding herd which may lead to reductions in 1995, but that is unlikely to result in a big enough increase in prices to stave off a disaster facing the UK pig industry.
To illustrate the problem on prices, I quote from a note from the National Farmers Union provided by Dafydd Owen, the NFU pig adviser. I thank him for the help that he has given me with the figures. He says:
"The cost of producing pigmeat in Britain is estimated at around 105 pence per kilo when fully costed and including depreciation of capital. The Average All Pigs Price, which is a weighted average of the prices paid for pigs in the UK, has only exceeded this for one month out of the last 16. The AAPP in the week ending 10 December"-- just recently--
"is 102 pence, producers are therefore continuing to lose money on the pigs they produce."
Those losses are market related, but the market has been distorted, first by unfair competition from Europe, particularly Holland, Denmark and France, and secondly, by the self-inflicted burdens of British legislation.
Column 1186I know that the Government are committed to ensuring fair competition among member states. The common agricultural policy rules must be obeyed at home and when other member states cheat they must be punished. I welcome the fact that as a result of pressure from the Government the European Commission has opened proceedings against a package of state aids to French pig farmers and that the Commission has ruled against the schemes and has demanded the repayment of aid paid illegally. That is welcome, but there is further action that I would like to hear that Her Majesty's Government will take. In 1991, the House approved regulations which ruled that breeding sows should not be kept in close confinement systems as they were detrimental to the welfare of the animals. I accept that those regulations will not be revoked, but their economic impact can be reduced without compromising the principles that they encompass. I am also happy that the Government have undertaken not to introduce any further unilateral farm welfare measures which could undermine the competitive position of our producers. That is precisely what the Welfare of Pigs Regulations do. They ban the use of stalls and tethers but give the industry until 1998 to phase them out. Those regulations have been followed by action in Europe and an EC directive now bans the use of tethers in the EU from 1 January 2006. It does not ban the use of stalls. A ban on tethers will therefore not come into force until seven years after the Welfare of Pigs Regulations 1991 have banned the use of stalls and tethers in the UK.
Imported pigmeat produced using restricted systems will have a cost advantage over our domestic product and imports are likely to win an expanded market share. The economic impact of the regulations on the UK is devastating. The Meat and Livestock Commission estimated that the additional cost of the regulations will be up to £2.70 per pig sold. That is the equivalent to between 15 and 50 per cent. of the annual profit margin. The ban will therefore absorb a significant proportion of the profits, if any, in good years; and when the pig cycle is on the downturn it will merely exacerbate the losses. The sum of £2.70 per pig is equivalent to more than £1 per sow per week or £2,000 per month for a 500-sow herd. It is estimated that at least 40 per cent.--about 300,000 sows--of the British breeding herd are still kept in stalls with tethers. The total cost of the ban will amount to more than £15 million a year across the industry and will seriously damage the competitiveness of British pig production. In comparison, 90 per cent. of Danish sows are housed in close confinement systems and discussions with Danish industry representatives show that a ban on the use of tethers is not expected to have a major impact.
The MLC estimates that a 10 per cent. fall in pigmeat production in the United Kingdom would weaken our balance of payments by about £100 million--and that excludes the impact of any loss of employment and added value in the processing and manufacturing sectors. There will also be a tremendous impact on individual businesses. The production of pigmeat has become specialised and the backbone of the industry is the hard core of large and efficient producers. Within the UK, 80 per cent. of pigmeat is marketed by fewer than 20 per cent. of producers. The impact of the ban will not be even; those most affected will be the innovators and the committed pig producers, rather than the laggards in the industry, of which there are a few.
Column 1187What am I asking the Government to do? First, they should amend the regulations to allow the use of stalls for 35 days post-weaning to ensure maximum protection for sows immediately after weaning and during the service period. Secondly, the re-phasing of the ban should be timetabled to harmonise with the European Union tethers-only ban, which does not come into force until 1 January 2006. I should like a firm commitment this evening that Ministers will press to have the EU directive reviewed at the earliest opportunity, with a view to the rules being brought into line with our own, or the ban on the use of stalls and tethers in the UK should be delayed until 1 January 2006. The third action relates to financial help for pig producers. The amendments that I have suggested will not remove the need for reinvestment by most pig producers of more than £200 per sow. Financial support is necessary to offset that cost. That could be achieved either by introducing a grant scheme or through the taxation system. Currently, expenditure on capital investment may be depreciated at only 4 per cent. per annum when calculating the tax liability of the business. That should be increased to at least 10 per cent. All external fixtures and fittings necessary to replace stalls and tethers should be treated as plant and machinery so that they can be depreciated at a rate of 25 per cent. per annum. Better still, such expenditure could be treated as revenue expense and entirely offset against the earnings of the business.
The other financial help that could be given to pig producers is through the farm and conservation grant scheme operated under objective 5a. That EU regulation allows grant assistance for investments made to improve welfare, but that is not included in the FCGS. I should like the Government to extend the FCGS to include the reinvestment necessary to meet the requirements of the welfare of pigs regulations.
One other measure, which is a Treasury rather than MAFF matter but on which I should like my hon. Friend the Minister to comment, would be to enable the industry to carry back losses for three years to bring its personal taxation into line with corporation tax. The last measure that I want the Government to consider is a degree of compensation from EU farmers for those being forced to leave the industry because we have been unable to level the pig playing field. On the positive side, at the Smithfield show a year ago I was pleased to see the launch of the British quality assured pigmeat initiative--BQAP--in which all parts of the British pigmeat industry have co-operated. There are already encouraging signs that that initiative will develop successfully.
Britain's processors, retailers and producers are working to distinguish British pigmeat from that of our competitors on the grounds of higher quality and welfare standards. They also take every opportunity to add value to their pigmeat products for the benefit of everyone in the production and marketing chain. That will help to improve pig prices, but many producers will not be there to enjoy the improvement if the Government do not seriously consider and, I hope, implement the measures that I have outlined this evening. On Friday I went to see my pig farmers. I have always enjoyed going to a pig roast. I do not enjoy being the roast, but that is what I was last Friday evening. I am pleased that my hon. Friend the Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food, is replying
Column 1188to the debate. I did a little in 1992 to help to get her elected and I hope that she will do a great deal to help the pig farmers of the United Kingdom.
Mr. Martyn Jones (Clwyd, South-West): I congratulate the hon. Member for Romsey and Waterside (Mr. Colvin) on obtaining his debate early in the evening. It certainly helps me, and I am sure that it helps the Minister.
The Labour party's view is that it will be best for the animals if the ban on sow stalls and tethers is maintained in Britain. We appreciate the position of the Government on the issue. They made a stand vis-a -vis our European Union allies, but possibly they went a little too far. I cannot criticise the Government for doing that. However, we should press strongly to have the same rules within Europe. It is not right that we should protect our animals if we can then import animals from the European continent which have been treated far worse.
We agree with the hon. Member for Romsey and Waterside that use of stalls should be allowed for 35 days after birth. Research seems to show that that is best for the offspring of the sows. If it is confirmed that that is the case, we shall support such a proposal. We believe that the tax regime should be exactly the same in Britain as in our European competitor countries. I hope that the Minister will agree to do everything that she can to make sure that the tax regimes will be the same.
"Level playing field" is perhaps a phrase that should be banned within these four walls. However, it is possibly the best way of describing what should be the case. It helps no one and it certainly does not help the animals if unfair treatment is exported to other countries. The animals suffer just as much in other countries as in Britain. Our animal welfare conditions are on the whole better than those of any other country in Europe. It is important that we in Britain make sure that our animals in Britain are treated as well as they can be. Our farmers would support that. Animal welfare organisations do so, but I hope that there is no support for exporting to other countries poorer treatment of animals. I am sure that the Minister will consider that point.