Examination of Witness (Questions 80 -
99)
TUESDAY 23 MAY 2000
RT HON
NICHOLAS BROWN,
MP
80. The balance between outgoers and supporting
those who are staying in but reducing capacity, has any thought
been given as to precisely where that balance will lie?
(Mr Brown) Yes. There has been some thought given
to it. I do not want to state a final balance, although certainly
for the first year of the scheme the balance in money terms lies
with the outgoers rather than the ongoers. That is what we anticipate.
However, remember that we are going to take sealed bids for the
outgoers scheme, in other words people bid for the capacity which
is being taken out. I do not want to go much further. I do not
want to say anything which jeopardises what is, after all, a commercial
arrangement.
81. Those who are staying in, will part of that
support involve assistance with marketing as well?
(Mr Brown) Yes, it does.
82. Obviously some additional marketing assistance
has been given previously earlier in packages specifically targeted
at the pig sector.
(Mr Brown) Yes.
83. Have we reviewed how effective that additional
help has been?
(Mr Brown) The help was given relatively recently.
84. About a million, was it not?
(Mr Brown) As you know, there have been changes in
the market place. I have to say, and maybe it is claiming too
much for cause and effect, the domestic market has strengthened
considerably. I do think the measures we have taken have at least
in part assisted that.
85. Some further help on the marketing side
to consolidate the position of an increasing UK customer adherence
to British pork would be money well spent?
(Mr Brown) I believe that and, indeed, the Meat and
Livestock Commission has just launched a new and very hard hitting
campaign to bring home to the consumer the animal welfare benefits
of the domestic product, and good for them.
86. Finally, on this, there is still an element
of persuasion to come I think towards pig farmers to show them
that there was no other way to define an aid package. I am sure
you regularly receive correspondence
(Mr Brown) I do.
87.I still do from pig farmers who say
"Well, there is a BSE tax to compensate for, why not have
money for that and a variety of other purposes?"
(Mr Brown) Yes.
88. To what extent are we getting across the
message that the aid package that has been defined is the only
route through the current restrictions that arise from the Commission?
(Mr Brown) I meet farmers' leaders and leaders particularly
of the different pig sectors regularly and I have explained this
in terms. As you know, I was quite keen to keep my foot in the
door with the Commission for as long as possible to see if it
was possible to devise a scheme that would explicitly meet the
disposal costs arising from the precautionary measures relating
from BSE. More than that, again as the Committee will know, I
have twice been to SEAC to check whether there is some way of
getting commercial use into material or, on the first occasion,
whether the ban was absolutely necessary. The advice is very clear
and the Government will stick to it.
89. One does note that SEAC have been given
a further brief in this particular action to once again review
the measures.
(Mr Brown) That is correct.
90. Would one assume that they will look at
this particular aspect once more?
(Mr Brown) I have asked them to and I expect them
to come back. As you know there is a debate in the European Union
that is moving in the opposite direction, an increasing view that
meat and bone meal should not be recycled anyway.
91. Yes.
(Mr Brown) Since we do not we shall make a virtue
of it and say so. Of course, as you know, it is a cost the domestic
industry bears, competitors do not. It is a fixed cost so as the
price comes down the effect of it bears more heavily. I was very
keen on looking at every avenue to relieve that but the fact of
the matter is if I was to make a proposal to the Commission it
would be knocked back under the State Aid Rules. I believe when
the Select Committee visited the Commission you explored this
matter with Commissioner Fischler and received the same view.
92. We received a very clear answer.
(Mr Brown) Yes.
Mr Öpik
93. Minister, the outcome of this element is
a bit like a retirement scheme. Do you agree with that to begin
with?
(Mr Brown) No.
94. I thought you might say that.
(Mr Brown) I can see where it is going.
95. How would you describe that scheme in that
case?
(Mr Brown) It is a restructuring measure in order
to permanently remove capacity.
96. Okay. To rephrase my second question before
I even ask it then. If it is good enough for the pig industry
surely there is a case to do the same for dairy and the lamb industry?
Perhaps by connecting the outgoer scheme to some sort of ingoer
scheme as well, we have to make sure there is not an influx coming
in at the bottom.
(Mr Brown) Why would we want to intervene to permanently
remove capacity from the sheep or the beef or the dairy sector.
The Government does not propose to make such an intervention and
in any event these industries are all constrained by Common Agricultural
Policy instruments.
97. Are you saying strategically you would not
be willing to consider some kind of an outgoers scheme given that
there are some
(Mr Brown) Are you really asking me about the early
retirement scheme?
98. Of course I am.
(Mr Brown) You are. As you know, when I became a Minister
I reopened consideration of the scheme in the Department. If we
could have made a go of such a scheme I would have liked to have
done so. I share that with the Committee. I have said it before
on a number of occasions. The reason that we cannot is in summary
because of the dead weight cost of the scheme.
Chairman
99. Minister, you used the phrase "permanently
remove capacity", would implementation of this scheme have
any implications for our future ability to build capacity in response
to the same study market?
(Mr Brown) No, the only occasion would be those who
have gone out of the industry under this scheme could not come
back under the capacity itself
|