House of Commons Hansard Debates for 28 Mar 1995

Mr. Hague: With the leave of the House, I should like to respond to the speeches made on Third Reading and try to deal with as many of the points raised as possible in the time remaining.

The hon. Member for Monklands, West (Mr. Clarke) responded to my opening speech by welcoming the fact that I announced changes during our proceedings with regard to the Government's intentions on the Bill. He said that it would be churlish not to welcome that, and it would be churlish of me not to welcome his lack of churlishness. Since the hon. Gentleman thanked all of those who have made the progress of the Bill possible, I must pay tribute to him and to his hon. Friend the Member for Birmingham, Erdington (Mr. Corbett). They have always put their case with clarity, and we have always been able to do business with them.

I join hon. Members in paying tribute to the work of my predecessor, my right hon. Friend the Member for Chelsea (Sir N. Scoot), who laid so many of the

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foundations necessary to bring forward a measure of this kind. I can only add to the tributes listed by the hon. Member for Monklands, West my own thanks to the Under-Secretary of State for Employment, my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice), who has been an indispensable part of the team. [Hon. Members:-- "Hear, hear."] I also thank the noisy bunch of parliamentary private secretaries who sit behind my hon. Friend, and the officials at the Department, without whom none of this would have been possible. My hon. Friend the Member for Exeter (Sir J. Hannam) welcomed the changes which were announced on Report, and asked about some specific points which were skated over earlier in the evening because of the lack of time. He also asked whether the law in this country debars what used to be called a deaf and dumb person from serving as a Member of Parliament. If my hon. Friend would like to inform me of the specific Act of Parliament that debars people who can neither hear nor speak from serving as Members, I would be happy to look into that. I am not aware of that Act.

My hon. Friend also asked about amendment No. 120--which was carried by the House but was not debated--as did the hon. Member for Caernarfon (Mr. Wigley). In Committee and during the consultation process, we picked up a number of concerns about the concept of reasonable adjustments. We want the law to be clear and understandable in that regard, and most of the details of reasonable adjustments have been given during the debates.

There are two particular items which amendment No. 120 brings into the Bill to which I shall draw attention. First, we have recognised the strength of the argument that an existing worker who becomes disabled should not have to apply formally for an existing vacancy that he or she could fulfil with a reasonable adjustment. As a result, we also include in our list the need to consider transfer to an existing vacancy.

Secondly, we have dealt with leave, by including a reference to absence for rehabilitation assessment or treatment. The Government amendment demonstrates that, once again, we listened to the matter raised in Committee and responded positively.

The hon. Member for Caernarfon also asked about costs and where they would fall in this regard. Access to work provides considerable help to disabled people and to employers in overcoming barriers to work. We are committed to reviewing the programme after its first year of operation, which ends in June. We will look closely at the aims and the targeting of the programme and its funding arrangements. Many adjustments will cost little or nothing. I cannot commit the taxpayer to open-ended funding of reasonable adjustments that employers will be required to undertake because of the new right, but we will look to see how the available resources can be used as effectively as possible to help disabled people to get and keep jobs.

My hon. Friend the Member for Exeter also asked about the civic rights and duties questions, which were passed over earlier because of the speed of our proceedings. I

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cannot do justice to the subject in the time available, but I will certainly write to him about that. The Government have already given a commitment in the consultation document to seek to increase the representation of disabled people on public bodies. We recognise the important role that the Government have in providing a strong lead. On access to courts, I can confirm that the Bill imposes a duty on the legal system to make the services that it provides accessible to disabled people who are making or defending a claim. Indeed, my right hon. Friend the Lord Chancellor has a continuing refurbishment programme, in which buildings are upgraded, as resources and physical constraints allow. That programme includes improved facilities for disabled people, such as ramps, better court lay-outs and infra-red hearing enhancement systems. For example, the Royal Courts of Justice have recently been upgraded and now include stair lifts, which were not previously available.

The hon. Member for Monklands, West said that he hoped that 1995 would be a year of securing the rights of disabled people. There is no question but that, when we look back on 1995 and on the Bill, we will be able to say that this was when we really got to grips with the matter and put in place the mechanisms that will bring to an end what we have come to know as discrimination against disabled people. I ask the House to remember, however, that the passage of the Bill, after it has been through another place and we have discussed the amendments made there, will not be the end of the process of stopping discrimination against disabled people. The Government, the National Disability Council and all interested parties will still have much to do to codify the duties, to ensure that the duties that we are placing on people are clear and comprehensible and, above all, to communicate to employers and service providers what their duties are and why Parliament has imposed those duties on them.

I hope that hon. Members on both sides of the House will agree that that is a task in which hon. Members of all political persuasions will be able to join. We will always face the task and we must never forget the scale of the challenge. Surveys on public attitudes about discrimination against disabled people show that the overwhelming majority of people are against such discrimination, but they also think that they do not do it and that it is nothing to do with them. Passing this legislation will make an enormous difference, but the task of education, persuasion and communication will continue. People will need a means of redress, which we discussed last night, but the overwhelming majority of employers and service providers will comply with the law straight away, if they know what it is.

This is a landmark Bill. It sets this country on a clear, workable and unambiguous course to ending discrimination against disabled people. It will make a genuine difference to the opportunities and lives of millions of our fellow citizens and I hope that it will command the support of the House.

Question put and agreed to .

Bill read the Third time, and passed.

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Milk Marketing

Motion made, and Question proposed, That this House do now adjourn.-- [Dr. Liam Fox.]

10 pm

Mrs. Ann Winterton (Congleton): Milk, that stable product to be found on doorsteps and in refrigerators around the nation, is not something which many people would immediately associate with black marketeering and bootlegging. However, the illegal trade in milk is now a growing problem for farmers, the dairy industry and its regulators.

The problem has arisen against a background of imposition on our dairy industry of a system of milk quotas in 1984, decided and enforced by the European Commission, which sought to limit the production of milk within the European Community to reduce over-capacity within the market and alleviate the need for subsidies.

I am on record in this House and elsewhere as having pointed out both the fallacy of the arguments that Britain contributes to the overall surplus of milk within the Community and the unfair way in which quotas were imposed on those same farmers whom we had encouraged for years to invest in new equipment and facilities to increase their output.

United Kingdom quota is below the level of our consumption. We are only 85 per cent. self-sufficient in milk and dairy products compared with Belgium, which is 111 per cent. self-sufficient; Denmark, which is 222 per cent. self-sufficient; the Netherlands, which are 225 per cent. self-sufficient; and Ireland, which is a massive 331 per cent. self-sufficient.

That is now milk under the bridge, as it were, as the United Kingdom dairy industry has come to terms with the quota system and the rather odd constraints that it imposes on British farmers. Surely it is time, however, that the quota system was brought more up to date and quotas were allocated more fairly than they were in 1984, as we are now in the single market, which implies the ability to transfer quota between member states. Will the Minister comment on that suggestion, which was supported at a recent meeting that I had with farmers in my constituency?

Rumours about the black market in milk began to surface in north-west England a few years ago and caused concern not only to the regulatory bodies but to other farmers and their representatives in the National Farmers Union. They have always taken the view that the law in that area should apply equally to all, and that any milk producer who suspects illegal practices should report those suspicions promptly to the appropriate authorities.

Following the abolition of the Milk Marketing Board, the number of reported movements of milk outside the quota system has increased. Higher milk prices have stimulated output of milk, and farmers have looked to lease quota from non-producers to expand their production. As a result, the demand for lease quota has risen dramatically, prices have become prohibitive and the temptation to sell illegally rather than pay super-levy has been seen, in some cases, as the only way out of the present dilemma.

The Intervention Board--the milk quota policeman--has received a significant number of calls on its fraud line reporting mysterious milk tankers arriving on farms at unusual times in the night. Following up many of those calls has revealed no sinister plot but has rather shown that,

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under the new marketing arrangements, a number of different milk tankers operated by a range of companies are on the road. Many purchasers of bulk supplies of milk, both for industrial processing, for example in cheese making, and for retailing, both through shops and doorstep deliveries, are buying and collecting milk from neighbouring farms in unorthodox but legitimate vehicles. I hasten to add that the majority of British farmers and the majority of those in the dairy and food retailing industry are acting responsibly and lawfully. Together, they continue to supply the best and highest-quality milk products in the world.

The Milk Marketing Board, as Milk Marque was known prior to recent changes in the industry's structure, as well as the NFU, have collaborated fully with the Intervention Board to provide whatever information, records or other evidence they can. The Minister will know, however, that there appears to be a small number of producers at the fringe of the industry who supply a part of their production illegally for the retail trade.

I believe that the Intervention Board and the Minister are aware of a number of "milk rings", where a tanker arrives to take milk direct from a farm. It is then sold, sometimes unpasteurised, and often through a chain that is unsupervised by the usual quality and hygiene control mechanisms, to retailers and caterers in other areas. Such farmers are able to increase their income through the sales of such "black" milk while also avoiding the penalties that might otherwise be imposed upon them for exceeding the production limits set by their milk quotas.

Three hundred milk producers recently attended a meeting at Stafford to register their concern and growing anger that little, if any, effective action appears to be being taken to tackle what is now a widely acknowledged problem in the industry. It is particularly affecting the cream of the nation's milk-producing dairy land in south Cheshire and north Staffordshire, from where, it is now believed, milk is being traded on the black market to Birmingham and elsewhere in the west midlands.

In November 1994, the Intervention Board said that it was about to take proceedings, and went so far as to tell Milk Marque that it should not take any action against its members who broke their contracts with it in case that might prejudice the board's chances of successful criminal prosecutions. Four months have now passed, and there is increasing concern among law-abiding Milk Marque and NFU members, and other producers, that no action has been taken to date, and that there is every prospect that little will be done in the future.

If the quota regime is not enforced fairly, the orderly marketing of milk will break down, great strains will be placed upon the industry, and our reputation in Brussels for the enforcement of regulations will be tarnished.

I also invite my hon. Friend the Minister to comment on the situation in other European countries, whose adherence to European regulations and their recognition of the need to enforce them effectively leaves much to be desired. We know that only too well from our recent debates on the fishing industry.

Perhaps the Minister can tell us precisely what action the Intervention Board intends to take, when it intends to take it, and what excuses it has to proffer for the unacceptable delays which law-abiding producers have already been forced to suffer.

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Let me remind the Minister that it is not just the dairy industry and the Government's reputation for enforcement that are at stake. Public health is also jeopardised by black marketeers, since their equipment and storage conditions cannot be properly monitored. They are operating entirely outside the normal hygiene and environmental health regulations.

The deregulation of the raw milk market, which took place just five months ago, has occurred at the same time as accelerating change in the retail market for liquid milk. As we know, doorstep delivery has sadly declined for many years. That decline has been hastened by continued price wars, including heavy discounting among major supermarkets. The dairy processing industry is going through a period of rationalisation because of over- capacity, and it has sought to blame the new marketing arrangements for milk for its present problems. Not all my farmers, I hasten to add, signed up with Milk Marque, which is itself not a monopoly as the old Milk Marketing Board was. In fact, there are now more than 40 players in the new free milk market, many of which are both customers and competitors of Milk Marque.

Dairy companies are buying about one third of the milk produced in England and Wales direct from farmers or sources other than Milk Marque. Deregulation was bound to bring change in its wake, and further change is to be expected once the GATT round commitments begin to be phased in from July 1995.

In conclusion, the United Kingdom has a natural climatic advantage in milk production, and a strong and innovative food and drink manufacturing industry. To benefit from those, we need to act decisively and immediately on the present black market in milk. The Government need to argue strongly for a more realistic and fairer milk quota allowance, a matter that is long overdue, and to explore options to ease up the quota system to enable quota to move to the most efficient production regions in the European Union, such as the United Kingdom.

I do not wish, and I suspect that other Members do not wish, British farmers and consumers to be placed at a disadvantage, and I urge the Minister to tackle those problems with vigour and immediacy.

10.10 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack): I first place on record my sincere congratulations to my hon. Friend the Member for Congleton (Mrs. Winterton) on winning the debate this evening and giving us an opportunity to review an important part of our agricultural activity--as she rightly says, at a time of considerable change in the dairy industry.

I am also grateful for the interest that has been shown in the debate by my hon. Friends the Members for Ryedale (Mr. Greenway), for Hexham (Mr. Atkinson), for Torridge and Devon, West (Miss Nicholson) and for Hertfordshire, North (Mr. Heald), and it would be unfair of me to forget that we also have in our midst the hon. Member for Glanford and Scunthorpe (Mr. Morley).

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Mr. Elliot Morley (Glanford and Scunthorpe): That is very fair.

Mr. Jack: The hon. Gentleman says it is very fair. He may not entirely like one or two things that I might have to say in explanation to my hon. Friend the Member for Congleton, who rightly drew our attention at the beginning of her remarks to some of the fundamental problems that have led us to the current position. Many of those relate to the history of milk quotas, and she does the House a service in enabling me to place some of those matters on the record.

It is often forgotten that the United Kingdom has never been self- sufficient in milk. Before we joined the European Union, we relied heavily on imports of cheese, butter and other milk products from our friends in the Commonwealth, principally Canada, New Zealand and Australia. After we joined the Community, our ability to produce milk was not encouraged by the then Labour Government, who, in the mid to late 1970s, did not adjust the green pound in a way that would have given the then support price mechanism the ability to encourage our dairy farmers to provide more milk.

Hence the fact that, once the constraint was removed, production leaped by about 10 per cent. between 1980 and 1983. However, when the Community introduced milk quotas to try to control the then rapidly increasing expenditure on intervention in milk products and the quota system came in, the base that was chosen was 1981. Sadly, although production had started to respond to the changes that the then Conservative Government had made, it was too late.

Mrs. Ann Winterton: My hon. Friend knows that that base was established, and we had to accept it, in 1984. However, it is 1995 now, and the position has changed dramatically. Much has changed in Europe. We are in the single market. It is ridiculous that in this day and age we should be only 85 per cent. self-sufficient and be disadvantaged and hampered by the base rate that was fixed way back in 1984. What efforts have the Minister or the Government made to change those matters in Brussels, and is it not about time that our farmers received a fair deal?

Mr. Jack: I have responsibility for the north Mercia region of the Ministry, in which my hon. Friend's constituency is located. Nothing would give me greater pleasure than to go to a meeting of farmers in her area and announce the ending of milk quotas. The message coming loud and clear from our farmers is that they want to be able to use their efficiency and expertise to produce as much milk as the market allows.

My hon. Friend rightly asked earlier, and now presses me to say from the Dispatch Box, what we are doing. The answer is that my right hon. Friend the Minister is actively pursuing in Europe at present the concept of transferability. It does not seem likely that we shall see an immediate end to milk quotas in Europe, sad though that may be for the United Kingdom. We seek to maximise the opportunities for our farmers, and my right

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hon. Friend is pursuing the aim of getting quota leased across the boundaries of the single market, which would be to the United Kingdom's advantage.

Mr. John Greenway (Ryedale): Will my hon. Friend give way?

Mr. Jack: I should like to make a little progress, if my hon. Friend will be patient a little longer.

We want to make progress, but other countries are not as reform-minded as we are. My hon. Friend the Member for Congleton asked how others were doing. She will know that one of the problems has been trying to persuade other people to implement milk quotas properly. That is why countries such as Greece, Spain and Italy, the worst offender, now face about £2.5 billion worth of disallowance because they have not played by the rules and implemented milk quotas properly. We have the most developed market in terms of lease and sale in the Community, and we maximise the opportunity for the United Kingdom.

Wherever we can obtain even just a little extra quota, we have. In 1993, as part of the SLOM 3 settlement, we were able to deal with that matter and increase quotas for other producers by half of 1 per cent--another 70,000 tonnes. In a world where every little helps, we have managed to increase quota. Our continual pressure in Europe has led to a fall in the price of intervention butter. Other intervention prices have been reduced, and we have staved off further reductions in quotas. Equally, our robust stance on milk quotas in Italy has prevented further reductions.

We all understood the sense of injustice felt by our dairy industry. My right hon. Friend the Minister will continue to campaign robustly in Europe to try to assist with transferability of quota across Europe.

Mr. Greenway: My hon. Friend is giving the House a frank and honest assessment of the overall position, but I want to tempt him further. It is becoming ever more clear that the efficiency of the United Kingdom's dairy farmers is also being penalised under the present arrangements. The butter fat content--the quality of the milk produced--is likely to trigger the super-levy this year. I am confident that, if the people of this country understood that we are not likely to exceed our quota in terms of volume, but in terms of the quality of milk produced, there would be even greater calls for some reform of the arrangements.

Mr. Jack: My hon. Friend reflects the frustration felt by some farmers because of the variations in the measurement of the butter fat content that were made towards the end of last year. There were some exceptional circumstances--there was a particularly mild run into the winter, and two different sorts of tests were used by different organisations. We have checked out those matters, and both scientific tests --the Gerber and the Rose Gottleib--are approved and accurate tests. We are considering and monitoring the results of those tests. It will not make a huge difference in terms of the super-levy. The position relates far more to a surge in production associated with the change in the marketing regime, an increase in the price of milk, and a particularly good period for milk production at the end of the year. Those factors have affected our exceeding the quota more than the

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question of testing. I will give way to the hon. Member for Glanford and Scunthorpe, and then I would like to make some progress.

Mr. Morley: The dairy industry in this country faces considerable problems because of the lack of application on the part of the Italians. I am not sure whether the Italians lease or sell quota in the same way as we do in the United Kingdom. If they do, the price of quota would reflect whether the Italians were applying the quota restrictions properly--if there is a very low price, clearly they are not applying the restrictions. Has the Ministry examined that situation, because it would indicate what is going on?

Mr. Jack: The fact that, until now, Italy has not implemented quotas properly makes it very difficult to answer the hon. Gentleman's question. Clearly, if milk quotas are not implemented properly--that was the subject of disallowance--there cannot be the same types of leased market arrangements that are in place in the United Kingdom. I assure the hon. Gentleman that the Commission is pressing Italy for a clear statement by the end of the month as to what progress it has made.

I turn to the issue at the centre of my hon. Friend's speech: the question of black milk. We must bear it in mind that milk quotas lie at the heart of the matter--if there were no quotas, by definition there could not be production above quota or black milk. It is worth putting that fact on the record.

This year, the temptation to break the rules has been perhaps greater than ever before. The factors to which I referred a moment ago in my response to my hon. Friend the Member for Ryedale--the rise in price, the change in marketing arrangements and the very good conditions for milk production at the end of last year--were too much of a temptation for some people who saw an opportunity to exploit the situation. For some farmers, conscious of the fact that they were facing the prospect of a big super-levy bill, the temptation to become involved in some of the practices to which my hon. Friend the Minister for Congleton alluded in her remarks was too great. We took very seriously the reports which came to us about that. My hon. Friend the Member for Congleton referred to the Intervention Board, which is now responsible for the administration of milk quotas. It set up the so-called fraud freephone to try to encourage an unencumbered stream of good-quality intelligence information, and it received up to 140 calls.

We have carefully examined all that intelligence and other information which farmers have imparted to people in the Ministry. Occasionally, it has been difficult to sift out the hoax or malicious calls, but all the calls that appeared to be genuine have been investigated thoroughly and properly. Those investigations are in the hands of a specialist team which has been created from members of the Intervention Board's anti-fraud unit and the Ministry's investigation branch.

Mr. D. N. Campbell-Savours (Workington): Will the Minister give way?

Mr. Jack: I should like to give my hon. Friend the benefit of a full reply to her points. If there is time, I will give way to the hon. Member for Workington (Mr. Campbell-Savours) later.

The group of investigators comprises members of the Intervention Board's anti-fraud unit and the Ministry's investigation branch. They are experienced officers, who

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have a long track record in investigating fraud and collecting the evidence needed to pursue criminal proceedings.

I understand what my hon. Friend said about the frustration felt because nothing appears to be happening. I visited the Intervention Board in order to investigate the matters personally, to meet some of the people who are involved in those exercises and to see whether meticulous investigations were being conducted. I hope that my hon. Friend will accept my assurance that I was satisfied with the efforts being made.

We must realise that, although there is a lot of rumour and discussion about fraudulent practices, we must work at securing solid, cast-iron evidence in order to bring criminal proceedings. As I said a moment ago, all leads are being followed. Tip-offs are very useful, but occasionally the people who have made allegations on television have been reluctant to come forward and provide information when pressed to do so.

It is a painstaking process to compile that sort of detail and I appeal, via my hon. Friend, to anyone who believes that he or she has information to come forward. We will certainly examine it. I have looked at some of the investigation and can assure my hon. Friend that it is very complex indeed. But complexity is not a barrier to progress, and we are fully aware of the importance of bringing cases to court as soon as possible.

I hope that my hon. Friend will understand that it is very important indeed that, when those prosecutions take place, they must be successful, because I believe that there is an element of deterrent in the success that we hope will come in that area. We do not want to have cases dismissed on the grounds of either technicality or lack of evidence.

The chief executive of the Intervention Board has assured me that good progress is being made on a number of cases. Investigation teams have selected target areas, and I can tell my hon. Friend that reports will be going to lawyers early in April for possible prosecutions to be considered. I hope that she will understand if I cannot at this stage go further about some of the areas on which she touched in her remarks, but I would not wish in any way to prejudice the investigations that have been made.

Mrs. Ann Winterton: I have just two small points that I would like to put to my hon. Friend. First and foremost, because of the quota system, it is an absolutely ghastly situation that farmer is having to inform on neighbour. We deplore the black market in milk, but we equally deplore the conditions that have made that situation arise. Secondly, will he accept as a point of principle that it is vital that a successful case is brought, because, unless there is confidence in the system of quotas that we currently have, and orderly marketing, the whole system will break down completely, which is not in the short term to anybody's advantage?

Mr. Jack: My hon. Friend's remarks correspond entirely with the comments that I have heard from farmers with whom I have had conversations about this subject. A very high proportion--I was about to say the totality --of farmers want to see these rules adhered to. They do not particularly like them, for the commercial reasons that we discussed earlier, but they do not want to see others getting away with breaking them.

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I give my hon. Friend an assurance that we take these matters very seriously indeed. I have seen for myself the meticulous work that is being undertaken, and there is a clear understanding that good-quality prosecutions must be brought to make the point that it is something that we will not tolerate, but we want to see success when it comes to prosecution.

I agree with my hon. Friend that it is not nice when people in an industry have, if one likes, to tell other people what is going on, but sometimes peer group pressure can be effective in dissuading people from breaking the rules that she mentioned.

Mr. Campbell-Savours: I wonder whether the Minister could ask his officials to carry out a mini-inquiry into the lease price, and what I call the freehold price, of quota in each of the deficit milk economies that form part of the European Union, because from that price we may learn much about what is happening in each of those markets.

Mr. Jack: I take the hon. Gentleman's point seriously. We have looked at our own market and at some of the more salacious stories that are circulating about all kinds of things, including football clubs buying up quota and rigging markets. I have genuinely found no evidence whatever as far as that is concerned.

As I said to the hon. Member for Glanford and Scunthorpe, in certain European Union countries that do not have a properly implemented quota system, it would be an extremely difficult task to undertake the kind of exercise that the hon. Member for Workington suggests. France has a highly centralised market that is different from ours. I understand what the hon. Gentleman says, but in terms of providing the answer he wants, in certain cases it would be extremely difficult to do.

I hope that my hon. Friend will understand that we take seriously the fight against black milk. As I have said, real progress is in prospect on the timing of the reports. I shall do my best as things progress to keep her and hon. Friends with an interest in the matter informed, but we must let the investigating bodies get on with their work.

My hon. Friend concluded her remarks with an interesting observation on the nature of what has happened in the marketing of milk. In many of the recent discussions that we have had, people have ignored the fact that, under the old end user pricing system, one effectively had four different uses for milk and four different prices for the same raw material.

Many farmers felt a sense of injustice about that. They realised that, within the dairy industry, there was surplus capacity. We now have an opportunity to see a modern, efficient dairy industry emerge as part of the changes in milk marketing, and to see a proper system of pricing develop for milk. But above all, we want to see greater flexibility in the quota arrangements, transferability in Europe and, ultimately, the removal of the quota.

That would be the great reward for our dairy farmers: the efficient United Kingdom industry could have its head, and we would not be here at half-past 10 in the evening debating over-quota production and black milk. That is something that we do not want to see as part of our agricultural scene.

Question put and agreed to.

Adjourned accordingly at half-past Ten o'clock.

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