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The Minister for Food (Mrs. Angela Browning): I am sorry to interrupt the hon. Gentleman, but he should be aware that, prior to the MHS carrying out the testing duty, Mr. Morphet was invoiced by Knowsley borough council. It was not a free service--he received bills for the inspections.

Mr. O'Hara: There was a dispute at that time between Mr. Morphet and Knowsley council, and the council understood that Mr. Morphet was making a test case at that time. When I was referring to a free service, I meant the service that was in operation before EU directive 86/469. I am grateful to the Minister for pointing that matter out, but I was aware of it.

I was referring to the charge of £12,000 per annum for the analysis of eight pigs' kidneys per month. While £12,000 in itself is a burden on Mr. Morphet's business, he could not believe what happened next. During the summer of 1995, MHS officials arrived at his abattoir with a fridge-freezer, which they plugged into his electricity supply--without asking permission, by the way. Eight kidneys per month were placed in the fridge-freezer by MHS inspectors but, from June to December, no one came from the MHS to collect them. However, on 14 December 1995, Mr. Morphet received a bill for £5,000--for the inspection of the kidneys that were still in the refrigerator.

In case one thinks that that was an isolated case of cavalier charging in the meat industry, I shall give the example of Cig Mon Cymru, from the constituency of the

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hon. Member for Ynys Mon. In March 1995, the firm received its last bill from the local authority for inspection services at its abattoir in Llangefni. The charge was £9,945.18 for 60,061 sheep slaughtered in a four-week period, which works out at 16.56p per sheep. On 27 June, the firm received its first invoice from MHS for a two-week period from 3 to 14 April 1995, when 25,699 sheep were slaughtered. The bill was for £6,405, or 24.92p per sheep--an increase of 50 per cent.

There are by-products of these increases. For example, the increases are not uniform across the industry, so livestock traders will pick and choose their abattoirs. That can mean that a longer distance is travelled by live animals for slaughter. Jobs are being lost in abattoirs, which may have to close for that reason or because of heavy charges alone. The current position also encourages live exports to Europe, where abattoir rates are cheaper. No wonder Sammy Morphet faces an extra £30,000 a year in charges for his average throughput of between 2,000 and 3,000 pigs per week.

Another example of cavalier charging relates to the recognition of experienced slaughterers. The industry might understand a charge of £65 for the validation of newcomers to the trade, large though the increase is in comparison with the original nominal fee of £1--the charge may have been reduced recently; I do not know the exact figure--but experienced hands in slaughterhouses not only consider the charge exorbitant, but find it demeaning to be validated by official veterinary surgeons who, although they may have professional veterinary skills, do not possess the manual skills with the knife that are the essence of the slaughterer's trade.

That brings me to the nub of the dispute between the dissident element in the trade and the MHS. The justification for the new system is the implementation of European directives governing meat hygiene. No one argues with the principle, but it must be asked how the new charges here can be higher than charges elsewhere in Europe. In fact, the question, "How are the charges so high?" is easy to answer; more interesting is the question, "Why are they so high?"

Let us deal with the "how" question first. Ante and post-mortem inspections are carried out in abattoirs in accordance with European Union directive 91/497. Under the MHS, they are conducted by official veterinary surgeons, who cost more than mere meat inspectors. Yet it is maintained that the identification of unsound meat is a special skill that can be acquired by technicians who do not need the full range of skills possessed by the veterinary surgeon--stockmen or slaughterers, for instance. Indeed, it could be argued that a typical OVS does not possess the knife skills that are necessary for the post-mortem examination of a carcase under directive 91/497. Official veterinary surgeons are expensive--and that is why MHS costs are so high.

Members of the trade would maintain that OVSs are not needed in static postings in all abattoirs. Indeed, it could be said that it is their visible input in static postings that has lowered their credibility among experienced practitioners in the trade. OVSs would make better use of their specialist skills, and recover their credibility, in the role of monitors of meat inspectors in more than one abattoir. The resultant service would be cheaper, too, and directive 91/497 would be met. I understand that the system works satisfactorily elsewhere.

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Let me make two further points. First, it may be asked what the ante-mortem inspection achieves that cannot be achieved by the post mortem. Secondly, I am advised that the whole system of inspections is--here I use a word that I have used before--a shambles. Abattoirs are reporting variations of as much as 400 per cent. in the inspection hours allocated to similar slaughtering operations. In some abattoirs, inspectors will examine "green offal"--stomachs and intestines--and in others they will not. Some inspectors insist on being present throughout the time when killing takes place; others do not. The Government have cited inconsistencies between local authorities as a justification for the new system. So what is different?

Previously, if a proprietor had a complaint or query, he or she had only to call in at the local council office; now he or she must try to communicate with a remote organisation in York. No wonder it is known as the Kremlin: it cannot communicate answers to simple questions such as how many hours are being charged for when invoices are presented.

MHS field staff are no less bewildered. They find themselves being arbitrarily allocated to slaughterhouses miles from their former work places, and doubtless their travel costs are passed on to the slaughterhouses. They find that overtime is subject to random variations, and that--especially in the case of part-time inspectors--work is erratic and uncertain. They find that the overwhelming burden of paperwork takes colossally more time than under the old local authority system, and they must endure a constant flow of confusing edicts and counter-orders from York. That is what I mean by a shambles.

Mr. David Nicholson (Taunton): On 4 April last year, a Standing Committee implemented the regulations. The hon. Gentleman was a member of the Committee; I attended, although I was not a member. When I asked my hon. Friend the Minister to assure us that the system that was about to be introduced was the simplest and most cost-effective system that could be introduced consistent with the European directive, she told me that there would be

The hon. Gentleman has done Parliament and the country a great service in bringing to our attention horrific evidence of the costs of the new system, and I wish him well in his efforts.

Mr. O'Hara: I thank the hon. Gentleman for his support. Sadly, all the horrifying predictions are coming true.

I said that the organisation was a shambles. That brings me to the other question that I posed: why does such a system exist? That, as I said, is the interesting question. The answer lies in the nature of the MHS, which is not a simple quango but a self-financing regulatory authority, or SEFRA. It has an establishment of about 1,000 staff, and its total running costs are some £53 million or£54 million--all to be financed from charges levied from the trade. It is not subject to Treasury strictures and controls like other quangos--like, for example, my local NHS hospital trust, with which I had some dealings earlier this week. It is currently having to cope with a directive to cut management costs by 5 per cent. and allocate the savings to front-line services.

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A SEFRA, however, has every incentive to perpetuate its bureaucracy by imposing ever more, and ever more unreasonable, regulations on what it calls--in a distortion of the term--its customers. It means the trade. The customers of the MHS are, in fact, the public, whose health it purportedly exists to protect. It is as if the police financed their traffic services with the fines levied on speeding and over-the-limit motorists, and called them their customers.

There is, however, a more sinister aspect, which also derives from the nature of a SEFRA. I mentioned earlier that a large block of the trade--some 120 firms--had lost faith in the Federation of Fresh Meat Wholesalers. That is because they feel that the big operators who are the hierarchy of the FFMW are supporting the MHS, with all its faults, precisely because its operation, as I have described it, will drive the small operators like Sammy Morphet out of existence. I shall not use the term "unholy alliance", but there is a convenient coincidence between the interests of the big operators and those of the people who run the MHS.

What is in it for the big operators is that they will eventually dominate the trade when the small operators are driven out of business; what is in it for those who run the MHS is a lucrative, risk-free business with rich remuneration. That is why last year, in early-day motion 845, I questioned the interests involved in that risk-free business.

What is the prognosis for the long term? When the big operators have the field to themselves, they will call the shots. They will be in a position to dictate to the MHS. For example, by threatening to relocate elsewhere in Europe--many are multinationals--they will be able to expose the MHS shortfalls in fee income and so ensure that their wishes dominate the continuing activities of what is called the "Service". The technical term for that is regulatory capture.

I am talking about cartels. They will be able to force the imposition of new regulations, which will drive smaller rivals out of the trade and prevent newcomers from coming into it and it will all be done in the name of such virtuous cloaks as meat hygiene.

I have the evidence for that in a letter from the general secretary of the FFMW to the principal finance officer of the Ministry of Agriculture, Fisheries and Food, dated8 November 1995, which refers to unpaid bills that existed at the time and includes the words:

This is the interesting point:

That is a sinister comment in a letter from an officer of the FFMW to an officer of MAFF.

What will be the consequences for the true customers of the MHS--the meat-buying public? There will be a reduction in consumer choice, as the fewer large outlets will concentrate on standardised fare to the exclusion of

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the variety of livestock breeds available through smaller, specialist outlets. I imagine that such outlets exist in constituencies like that of the hon. Member for Ynys Mon--in rural areas.

The cartel will be able to control prices to a much greater extent because small, independent livestock buyers will be removed from the market. There is a close analogy with the domination of the retail trade by the giant supermarket chains. But, in the case of the meat industry, there is an added and serious dimension. Food safety--the ultimate rationale of the MHS--will deteriorate. With fewer, larger units processing greater numbers, there will be increased danger of cross-contamination in slaughterhouses, increasing the spread of such bacteria as the salmonellas, campylobacter and E. coli 0157. Incidentally, it is worth noting that the only E. coli outbreak ever associated with meat came from a fully approved EU slaughterhouse of the type that I predict will dominate the trade. Tracing sources of infection will become inestimably more difficult and the break-up of the present food hygiene system, with the introduction of the MHS, will make it more difficult to trace food poisoning. In short, we are not merely looking at a monster in the creation of the MHS, but at a nightmare for public health.

The local authority system, for all its faults, was not broken, although it may have needed some fine tuning in keeping with progressive demands. Sadly, however, one cannot expect local authorities, pressed as they are to meet their statutory responsibilities in many fields, suddenly to step in and bail out the Government by resuming a responsibility so summarily removed from them.

Yet a system is needed to enforce the regulations, which necessarily and rightly flow from EU directives on meat hygiene. The interesting thing about the abomination of a system that the Government have introduced under the Fresh Meat (Hygiene and Inspection) Regulations 1995, is that it makes the option of opting out of the EU regulations more attractive than it otherwise would have been to many people. There are those who say that we should opt out for ideological reasons. Others are saying that we should do so because the system is such a mess.

Given that the EU is reviewing the meat inspection system to bring it into line with more modern systems of risk assessment, there is scope for returning the responsibility for inspecting their own produce to the meat traders, leaving the regulatory officials the simple task of monitoring systems in the same way as they are monitored for the rest of the food industry.

I conclude with this appeal to the Minister: pursue that self-regulatory line in Europe, pressing for the development of systems that will make the MHS redundant as soon as possible. She would thereby be doing a great service to the economic health of the fresh meat industry, the jobs of people employed in it and, more importantly, to the health needs and wealth of choice of the meat-buying public.

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