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Several hon. Members rose--

28 Feb 2001 : Column 943

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. With the leave of the House, and given the special circumstances that overhang the debate, I call the Minister to make a short statement.

Mr. Nick Brown: With the leave of the House, I wish to report further cases of foot and mouth disease.

As of 5.30 pm, the total number of cases in the United Kingdom is 26. There are two further cases, in Warwickshire and Chelmsford. We have already traced links with earlier sources: the Warwickshire case is linked by transport to the seventh outbreak, in Devon. The link with the Chelmsford outbreak has not yet been traced, but the farm is contiguous with the site of an earlier case. The Warwickshire outbreak involves 80 sheep and 220 cattle; on the Chelmsford holding, 600 sheep and two pigs are affected.

5.48 pm

Mr. John MacGregor (South Norfolk): I thank the Minister for his statement. It underlines the gravity of this outbreak and, sadly, the fear that it may continue for some time.

Let me begin by declaring an interest. As the Register of Members' Interests states, I am a non-executive director of two companies that are inevitably involved in the problem: Associated British Foods and Uniq. However, I shall speak mainly on behalf of the agriculture industry and farmers. As the Minister knows, I represent not only a major agricultural area, but one of the country's key pig-farming areas, which was heavily affected by classical swine fever. I am grateful for the Minister's acknowledgement of the plight of the pig sector.

I congratulate the Minister on the manner in which he has approached the debate. As one who knows how difficult it is to deal with these issues, I pay tribute to the comprehensive and understanding way in which he is handling them. He will know that he has the support of the whole House. He certainly has my support in all the measures that he is taking. Before I come to the two main points that I want to make, let me refer to two of those measures briefly--they have already been dealt with at some length.

The first is in relation to disinfectant. I am getting the same reports as everyone else: there is a real worry that disinfectant is still not getting through to where it is needed. Obviously, if there are more outbreaks such as those that the Minister has just announced, that becomes a more important issue. I know that he is paying attention to that matter and I am grateful for his announcement earlier, but it will be a key issue.

The second is in relation to the licensed slaughter scheme, which I understand the Minister intends to announce on Friday. He put the point fairly--I am paraphrasing his words, not quoting--when he said that the issue was to get the supply chain moving without compromising the eradication of the disease. Although I fully understand the desire to get the supply chain moving, as that would deal with many issues, including the demands of the supermarkets, I hope that he will err on the side of caution. From my awareness of some of the issues and complications involved, it may take him more than two days. I would not mind if it did. I am well aware of some of the issues and it could easily go wrong. I am sure that the whole industry would prefer to have an absolutely cast-iron scheme than to move too quickly.

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In that context, the Minister said that he had had discussions with representatives of the livestock industry; I know that he has had discussions with the National Farmers Union. My understanding, as of lunchtime today, was that one of the chief executives of a major processing firm and abattoir had not yet been consulted. As he might be exactly the sort of person who will be heavily involved in the practical implementation of the scheme, perhaps the Minister should look at that matter and consider whether to consult more widely.

I can cover my two main points briefly because so much has been said already. In both the points, I aim to strengthen the Minister's hand in what he is trying to do. The first is on compensation. Of course, I welcome the announcements on the agrimonetary compensation payments and on the acceleration of the pig outgoers scheme, but, as my hon. Friend the Member for South Suffolk (Mr. Yeo) brought out well, in the light of the effects of sterling on the agricultural industry, the agrimonetary compensation payments should have been in place anyway and were designed for a different purpose.

It is helpful that the Minister has been able to get the Treasury to agree to the pig outgoers scheme now. That may not have been possible without the current crisis. Nevertheless, we must remember what the scheme was designed for. It does not help much in these circumstances. As the Minister knows--it may be one of the reasons why he has been able to accelerate the scheme--the take-up has not been great, so not much money has been involved. Therefore, although both those initiatives are helpful, more may need to be done.

As a former Chief Secretary as well as a former Minister of Agriculture, Fisheries and Food, I can see the hand of the Treasury in the two announcements that have been made. In both cases, the schemes are very limited: the costs are ring-fenced. There has been great pressure for one of them already; the other is simply an acceleration of a scheme.

I shall make a plea to the Minister--I hope that I am strengthening his hand. In his statement on Monday, he kept saying in relation to any proposals for consequential loss that there was no precedent for such schemes. He is right. I understand the problem for other industries, such as the road haulage industry, but I am talking only about consequential losses for the agriculture industry and farmers.

My response to the point that there is no precedent is that we are now in an unprecedented situation. When the last outbreak occurred in 1967, the industry was not on its knees, so it was able to recover quite quickly. The income position was wholly different. The industry had the resources to recover and the scale of the outbreak turned out to be nothing like what appears to be the scale of the current outbreak. It was confined to three counties, or certainly to two areas. It was not England and Wales wide, as, unhappily, this one is. The scale of the current outbreak appears to be much bigger, but the industry is in a much weaker position. That is the big difference.

Today, as the Minister fully acknowledges, after four extremely difficult years for the farming community, every sector of the industry has been rocked back on its heels in a way that I have never seen during my parliamentary lifetime--indeed, during my lifetime because I cannot remember the 1930s. As we know, incomes are heavily down and cash flow is much affected.

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Cash flow for many sectors, such as the pig industry, has been awful for some considerable time. Many people in the industry are now eating into their capital, if they have capital, and others have borrowed heavily. Thus the industry's finances are much worse than in 1967. That is an important point in relation to precedent.

I am glad that the Minister is keeping an open mind on the matter, as he has said. I hope that he is willing to go to the Treasury again for further support for the agriculture industry alone if the problem continues for much longer.

Mr. Drew: I am sure that the right hon. Gentleman agrees that there are difficulties with the precedent argument. I make no apology for returning to the case of bovine TB. Although foot and mouth is on a different scale in that it is a national problem, some of us have had to live with the threat of bovine TB, which also results in the closure of units and a lot of cost. I am sure he agrees that it would be dangerous to set precedents.

Mr. MacGregor: I have already made the point that this looks like an unprecedented situation. It will obviously depend how long the disease continues, but my understanding is that, with the problems of animals stocking up on farms, the cost of feeding and the loss of value when farmers sell, the total cost could amount to £150 million a month. That is the latest assessment that I have been given. I am sure that it is a very rough assessment at this stage, but it puts into context the relief given on the agrimonetary payments. I realise the difficulties of working out a scheme and I know all the problems of going to Brussels, but if this continues, I hope that the Minister will be prepared to look at the matter again.

Another reason why this crisis is different from 1967 is that there is a heavy surplus in the Government's finances. Again, I speak as a former Chief Secretary. The contingency fund is intended for exactly this type of situation. Unlike many schemes and programmes that the Minister is sometimes urged to take up, it is a one-off crisis that would not be repeated in later years. Therefore, in that context, from the Treasury's point of view, it is not a bother.

The contingency fund is intended for exactly that type of purpose. I do not want to raise a politically contentious issue, but most people in the country would regard some use of the fund--even surpluses beyond the fund, if that were necessary--for that purpose as much more worth while than bailing out the dome. The cost of such a scheme, payable in one year only, would be small in relation to the securing of an industry and home supplies.

I with to stress the position in relation to the pig industry. The Minister has been right in everything that he has said. The pig industry has not had many EU support schemes. We know all the issues in relation to the pig industry, which, after classical swine fever, is in a serious position. Most pig farmers simply do not have the resources to cope with a long continuation of the present outbreak, particularly as they have now over-borrowed.

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