Examination of Witnesses (Questions 100
- 119)
WEDNESDAY 21 JUNE 2000
MR BRIAN
BENDER, MR
RICHARD CARDEN
AND MR
GEORGE TREVELYAN
100. But there are also technical implications
when you tell, for instance, a farmer that they have to change
the way they do something, whether it is to do with environment,
whether it is to do with pollution and so forth, but whatever
it is, you know, I would strongly urge that you re-look at that
but I appreciate that time means we have to move on?
(Mr Bender) There is the cost of complying with the
regulation in the broader sense of the word, so if a farmer has
to change practices in a complicated way, then that would be taken
into account in the Compliance Cost Assessment.
101. Okay. You hinted at it before that—I
am not sure if it was the Cabinet Office—they consult with
you about various new regulations that may be in the pipeline.
May I ask the broader question whether MAFF is consulted on regulations
from all Government departments that could affect the competitiveness
of agriculture?
(Mr Bender) Yes. It would normally be the case that
the lead Department is required to produce a Compliance Cost Assessment
of this sort and it would do it in consultation with other departments
affected. In the case of the agricultural industry, we are plainly
a department that is importantly affected. So if you take an example
of an EU environmental regulation, the preparation of the argument
would be for that department, the DETR, but MAFF would be fully
involved in the discussions as part of the normal Whitehall co-ordination
machinery.
102. If I have this right, if another department
comes up with a new regulation which may affect competitiveness
of agriculture, they systematically ask you for your opinion.
If you invent one in Health, you do not systematically—
(Mr Bender) Where I got myself onto a hook earlier
relates to whether after things have been adopted and been in
force for some time we look at every single regulation to evaluate
it. For all new regulation it is systematic and it is systematic
consultation of the sort I have described. If MAFF is in the lead
our Compliance Cost Assessment will be co-ordinated with others,
if DETR is in the lead theirs will be. For new regulation it is
completely systematic. Where there is a question, is whether everything
that is already on the statute book is looked at in an absolutely
systematic way.
103. May I just turn then to the positive. In
1999/2000 there were 120 statutory instruments when compared with
the previous three years of 183, 180 and 190 were very favourable.
How did you manage to have this bonfire then of the number of
statutory instruments made in 1999/2000?
(Mr Bender) Do you want a note on that? We are not
sure.
Mr Marsden: Okay.
Chairman
104. On that point, may I ask you a question,
Mr Bender. Do you envisage that during the period of a Fundamental
Expenditure Review that the Department will be able to revert
to the principle of full economic cost recovery?
(Mr Bender) Do you mean for all the costs, all the
work of the Department?
105. There is something on the statute book
which says the Department should seek full economic costs recovery
in respect of the cost of regulation so that we had it on Dairy
Hygiene charges, we have had a long argument about how this is
going to apply in the intensive livestock sector of the Pollution
Control mechanism, Environment Agency on sheep dips. In the Review,
the Action Plan, the Minister prolonged some suspensions and suspended
other areas, but when I asked him in the Chamber as to whether
the Treasury had agreed that full economic cost recovery simply
meant putting our agriculture at a disadvantage to Continental
where governments were not required to recover these costs and
nothing in the European regulations required them to, he said
that the Treasury had not agreed. Now given the situation we are
in in agriculture, I just wondered what assumptions you make in
your bidding for Fundamental Expenditure Review and whether you
think that the Department's way will be clear to start levying
again the charges which have been deferred in the recent Action
Plan and previous things?
(Mr Bender) The Prime Minister and Minister having
announced, for example, back in March that Dairy Hygiene charges
would be scrapped, it is not part of the Department's planning
that they should be reintroduced, if that is a direct way of answering
your question?
106. But on, for example, charges applying to
abattoirs, another area where they were deferred and there are
quite a string of those, quite a deliberate policy?
(Mr Bender) Again, MAFF has not bid in the Spending
Review for those costs.
107. When you say it has not bid for the costs,
you mean to relieve farmers of that cost requires money you have
not bid for?
(Mr Bender) The lead in this area—and it comes
back, I think, to Mr Paterson's question—because of the
responsibility of the Meat Hygiene Service to the Food Standards
Agency, is the Food Standards Agency.
108. So how does this—
(Mr Bender) I do not know the answer to that. Sir
Colin McLean is producing a report on costs in this sector and
Sir John Krebs and the Minister are in contact about this.
109. There is a review, I know that?
(Mr Bender) Yes.
Chairman: Perhaps you would keep that in mind.
I think it is probably the most important thing in the Action
Plan as a matter of fact because we were talking about competitiveness.
Now, Mr Paterson and I will come back to Mr Marsden to continue
his line of questioning.
Mr Paterson
110. Further to your last comments, you said
that you review directives where they might affect agencies where
they are the lead agencies but could affect agriculture. How come
that the European beef labelling directive got through? I have
been approached by a very large business which has a plant in
Mr Marsden's constituency and mine in a fearful state, firstly
because of this directive, these extraordinary, impractical, virtually
impossible to put into effect and secondly if it is it will cost
£20 per animal. How come that got through without being flagged
up because I am also on the European Scrutiny Committee and it
was not flagged up as being very costly and very impractical?
(Mr Carden) I think the Minister has explained to
the House the general benefit that he sees for the British beef
industry in having a European wide set of rules on labelling.
He felt it was in the UK interest and the interests of UK farmers
to support the general principle behind the labelling regulation.
There are one or two specific aspects—I will not go into
details; I think they are well known—there were one or two
features of the regulation as it was agreed in the Council of
Ministers in April that are now attracting protest from the UK
farming industry. One in particular; the requirement that beef
should be labelled according to the category of animal that it
comes from—a steer, a heifer, a bull or a cow. That point
was argued out at earlier stages and in the final Council session.
It appeared that at one point that requirement would not be in
the final deal. It appeared on the table at the final session.
The Minister of State, Ms Quin, who was representing the UK at
that meeting argued against it but did not attract sufficient
support from other Member States. It was adopted by qualified
majority against arguments from the UK side. That is in the nature
of how business is done in the Agriculture Council, mostly by
qualified majority, and one Member state arguing against a point
is not sufficient.
111. It is a classic case, because to quote
the chief executive of the company which we both share, he says:
"There is absolutely no chance of this regulation being applied
south of Paris, but as usual the UK will enforce it as we always
do." Here we have a regulation which I think this company
will do its honest best to implement, at a cost of £750,000
capital expenditure, imposing £20 a beast cost, when he is
confident his competitors on the Continent will not be doing it?
(Mr Bender) May I make two points? One is the proposal
is currently before the European Parliament so all is not yet
lost. It is possible that the Parliament will amend it on this
point and secondly the Minister has registered this issue, including
how it will be implemented, because there will be implementing
regulations underneath it, with Commissioner Fischler in Luxembourg
a few days ago. In other words there is a parent regulation, but
there is a requirement to implement it which is for a Commission
regulation underneath that, and our concern on that point is something
the Minister has already registered with Commissioner Fischler.
Mr Marsden
112. Can I be absolutely sure for the record
then. You are saying that in future you are going to evaluate
all new regulations as to their impact on the competitiveness
of agriculture and will you publish the findings?
(Mr Bender) It is not a question of only in future;
it is the present practice that all new regulations require a
Compliance Cost Assessment. My understanding is that they are
made available, they are all made public. If that understanding
is not correct I will inform the Committee.
113. Furthermore, would you also review all
existing regulations to check that there are none outstanding
at the present time that have not been evaluated?
(Mr Bender) Well that is where I am a bit more equivocal,
because there are many, many regulations on the Statute Book.
There have been a substantial series of reviews of the sort that
Mr Carden described earlier in the agricultural area and there
is a review that Lord Haskins is leading in the environmental
area that affects the farming industry.
114. I will take that as a no then?
(Mr Bender) Well, if the question is do I undertake
that the Ministry of Agriculture will review every single regulation
that is on the Statute Book as it affects the farming industry,
I cannot answer yes at this stage. I think it could be a very
resource intensive exercise. A lot of reviews have been happening
in the last few months or in the next few months.
Mr Marsden: Okay.
Mr Paterson
115. Could you then make a commitment to learn
from the potential fiasco of the beef labelling issue to try to
see these juggernauts coming over the horizon because you say
you have done your best through the course of this year, but a
real nightmare one has gone through and from what you said it
does not sound there is much chance of stopping it; it all hangs
on Herr Fischler playing ball which I think is unlikely. So can
you commit to the Committee that you really will look out for
these things and try to reorganise your way of scrutinising these
regulations as you come along?
(Mr Carden) I can assure you we are very well aware
of the point. We have been in close discussion with the industry
as this proposal went through the quite long course of negotiation.
We were watching the point; we thought we had won it at one stage.
It came back into Council and at that point it was not possible
for us to overturn it for procedural reasons, not because we did
not understand the point or had not seen it coming.
Mr Paterson: It is a good case for not extending
qualified majority voting.
Mr Marsden
116. Policy evaluation work is being redirected,
from your Departmental Report, and I quote: "....away from
individual policies and towards a more strategic approach".
What are the benefits of this development as you see it? Do you
want the reference? Paragraph 11.15.
(Mr Carden) I think I can only say that we are expecting
benefits from devoting the limited resources that we have for
policy evaluation to wider issues rather than narrow and specific
ones. We have, I think, steered in this direction because we only
have the resources to carry out a limited number of reviews of
policies in a year and we have had some that have been about quite
small and specific areas of policy. This is an attempt to get
best value from limited resources by looking for strategic and
wider issues.
117. Right. Behind you; carry on Mr Carden unless
you want to read the note.
(Mr Carden) It says page 80. I am on page 80.
Chairman: It was not the cavalry!
Mr Marsden
118. A little late on that one, was he not?
So you just think it is a good idea. Okay, right. Forgive me,
I am just astounded at this sort of lack of understanding about
strategies. I said it before in a previous discussion when we
went to the Regional Service Centre, show a bit of, dare I say,
business common sense and demonstrate that you understand the
importance of this. I appreciate Mr Hurst would disagree with
me, but every successful business takes this to heart and wants
to obviously make sure that they understand their business inside
out and to be able to map out the strategy for the future. You
are not giving me, and I suspect a lot of farmers and many other
of your customers, much confidence in this area?
(Mr Bender) If I may come back on that, does not the
sentence in this Report mean just that, that rather than looking
policy by policy we will be evaluating across a more strategic
group of policies?
119. That is what is the worrying bit, I am
afraid, Mr Bender, because I gave you the answer and you were
struggling, let us say, to get your heads around it. Okay, moving
on; can you tell us about the forecasting model that is being
developed and that is paragraph 11.18.
(Mr Bender) Still on page 80.
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