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12.12 pm

The Minister for Food (Mrs. Angela Browning): I shall begin by picking up some of the points that hon. Members raised during the debate. Throughout his contribution, the hon. Member for Knowsley, South(Mr. O'Hara) worked on the assumption that the Meat Hygiene Service has cost £54 million--which was the figure that he mentioned in the Statutory Instruments Standing Committee. I am astonished that hon. Members on both sides of the House have assumed that that figure is absolutely correct. Any one of them could have tabled a written question in the past few weeks and received an answer from my office as to the exact cost of the service 10 months down the road. The hon. Gentleman's figure is quite inaccurate, as I told him in the Standing Committee. Today, I shall provide the correct figures, which prove that the basis of the hon. Gentleman's argument is flawed and that the allegations made by hon. Members on both sides of the House are totally without foundation.

I shall deal now with the points raised by hon. Members. We consult not just the Federation of Fresh Meat Wholesalers, but the Quality Meat and Livestock Alliance, British meat manufacturers and a whole range of people who represent both large and small companies. The hon. Member for Knowsley, South pointed to regulation inconsistencies between different abattoirs. The system that we operate in this country is based on the hazard analysis critical control point system. So as not to over-regulate them, plants are assessed individually and the amount of inspection required is based on things such as throughput and the need for further inspection.

That system has been welcomed not just by the meat inspection industry, but by whole areas of British industry as a minimalist approach to regulation. In other words, inspection is concentrated on those points in the process and on those premises where it is deemed necessary. We seek to reduce regulation by working in partnership with the abattoir owner. That is why some plants have more inspections than similar plants.

The hon. Gentleman then suggested that we should adopt the European proposal, but the Europeans are considering the system that the United Kingdom has pioneered in that area. Under our system, inspections are different from plant to plant, but regulation is minimal. We do not over-regulate where regulation is not needed. The system also helps plants to recognise the role that they must play to reduce the number of inspections of their premises.

The hon. Member for Knowsley, South also said that the MHS is not subject to Treasury controls. That is not the case: it is subject to both Treasury and National Audit Office controls. I point out to him and to the hon. Member for Newcastle-under-Lyme (Mrs. Golding) that the fact that we are having this debate, in which I can answer for the Meat Hygiene Service, proves that that service is directly accountable to my right hon. and learned Friend

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the Minister of Agriculture, Fisheries and Food and myself. Consequently, I am here today to account to the House of Commons. There could not be a more transparent line of communication between the service's operations and its accountability to this place. I think that the hon. Gentleman described it as a self-financing regulatory authority, but that is not the case. There is a clear line of direct contact, which I welcome.

Many hon. Members mentioned competition in Europe. My hon. Friend the Member for North Dorset (Mr. Baker) made a very telling point, using the example of the small abattoir at Sturminster Newton in his constituency. I have met my hon. Friend and the owner of that abattoir, and I issue an open invitation to hon. Members to meet me, with abattoir owners from their constituencies, and talk about problems in abattoirs and about the details of individual cases.

That abattoir owner came to my office and said, "We want the European health mark. We want to be able to export, because it is a £1 billion industry and we are very good at it." The demands of the marketplace, both at home and abroad, create huge opportunities for those abattoirs that aspire to those standards, that control and the health mark. The industry is asking for that. That is where the industry is heading in the next century, and I am astonished that hon. Members want to see a reduction in the controls that allow British companies to compete.

The hon. Member for North Cornwall (Mr. Tyler) referred to other member countries. Many, such as Ireland, Denmark and Holland, have centralised inspection systems. There is no evidence to suggest that the United Kingdom is disadvantaged commercially as a result.

I shall deal now with the main substance of the debate, as I should like to put the facts to the House. I am very grateful to the hon. Member for Knowsley, South. When the Statutory Instruments Standing Committee debated the regulations which transferred responsibility to the Meat Hygiene Service last April, the hon. Gentleman painted an alarming--indeed, an apocalyptic--picture of the effect that the MHS would have on the meat industry. I am sorry that he chose to pursue that theme in his remarks today because, 10 months down the road, I can provide more information.

I can confirm that accountability was made very clear from the time that the MHS was established. It will produce an annual report after the first year--it is now 10 months old--which will be placed in the Library. There is no question of any secrecy, and it is rather disappointing that the hon. Member for Newcastle-under-Lyme did not know that.

The hon. Member for Knowsley, South predicted that the industry would have to bear overhead costs averaging £20,000 per abattoir and that his constituent, Mr. Morphet, would be charged an extra £30,000. He said that the MHS would have a built-in incentive to maximise its own requirements, that it would drive small and medium operators out of the industry, that consumer choice would be restricted and that prices for livestock farmers would be reduced. The hon. Gentleman even predicted that fewer than 95 slaughterhouses would remain in business by the end of 1995. He will have heard the figure I gave twice, and I hope that the hon. Member for North Cornwall also understood the figure. I told the Committee in April that those accusations were unfounded. This morning, I shall give the House the facts.

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The story of the Meat Hygiene Service is worth telling. When we set it up, Ministers gave it a target of achieving an efficiency gain of 10 per cent. in relation to estimated costs--our figure of £45 million, not that of £54 million given by the hon. Member for Knowsley, South--in 1994-95. We expected the MHS's operational costs, with the 10 per cent. efficiency gain, to amount to £40 million in 1995-96.

We also took the view that it should be possible for the MHS to achieve further efficiency gains in future years, and we concluded that it would be right to make available some financial assistance in the first year to ease the transition to the new arrangements. We therefore made available up to £3 million, for 1995-96 only, and we made it plain, in the House and in another place, that the Meat Hygiene Service would be expected to find the efficiency gains necessary to compensate for withdrawal of that transitional relief after 31 March 1996. In other words, the MHS was required to ensure that chargeable costs in 1996-97 would be less than £37 million--the amount that we expected to be charged for the industry in 1995-96, taking into account the efficiency savings and the transitional relief.

The MHS is now forecasting, just two months before the end of its first year, that its operation costs for 1995-96 will turn out to be £35.2 million pounds. I wish that hon. Members had thought to ring my office or put down a parliamentary question, because the contributions to the debate, including that by my hon. Friend the Member for Macclesfield (Mr. Winterton), have been based on the wrong assumption that the figure was almost double the actual figure. The erroneous figure was produced by the hon. Member for Knowsley, South last year and was perpetuated by him this morning.

Mr. Nicholas Winterton: The Minister is making much play of the actual costs of the MHS. My figures show that, in 1990, local authority costs for a similar service when there were 700 abattoirs and more than 100 poultry plants were £32 million, yet in 1995 the figure for the MHS, when there are only 400 abattoirs--not 700--and a static number of poultry plants, is about £37 million. Will the Minister comment on the statistic quoted by my constituent about his abattoir--

Mr. Deputy Speaker (Mr. Michael Morris): Order. The hon. Gentleman knows that these are short debates, and one question is sufficient.

Mrs. Browning: I hope that my later points will help my hon. Friend.

The MHS is now forecasting that its operational costs for 1995-96 will be £32.5 million. That is an efficiency gain of more than 20 per cent. in the first year, despite the fact that we had charged it to make an efficiency gain of 10 per cent.

Because the European legislation prohibits subsidisation below the level of the so-called Community standard charge, and the MHS charges to many plants are coming out below that standard charge, only £2.5 million of the £3 million allocated to transitional relief will be used. So the total amount paid by the industry in 1995-96 will be some £32.7 million pounds. I appreciate the point that my hon. Friend the Member for Macclesfield made about fewer plants, but we are several years down the

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road and the MHS is charged with additional responsibilities. For example, it now has a very important role in animal welfare in the abattoirs.

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