Examination of Witnesses (Questions 60-79)
14 MAY 2003
MR ELLIOT
MORLEY MP AND
MS MANDY
BAILEY
Q60 Mr Jack: So call it £3 million
in round figures.
Ms Bailey: In round figures.
Q61 Mr Jack: So we might expect on
the same sort of pro rata basis a couple of million out of Scotland
and Wales, so we are about £4 or £5 million adrift?
Ms Bailey: Yes.
Q62 Mr Jack: Is that the make or
break, Minister, that if we are £4 or £5 million adrift
between friends this whole things goes off the radar?
Mr Morley: It is not quite as
simple as that, Chairman, is it? Bear in mind this is £30
million and between us all maybe up to £10 million, that
is £40 million. First of all, you have got to be careful
that you are not straying into state aid territory because there
is a limit we can legally contribute.
Q63 Mr Jack: I am enquiring humbly
after facts.
Mr Morley: There is a limit legally
that we can contribute and you have to be careful that you do
not overstep that limit.
Q64 Mr Jack: I am not sanctioning
it, you are.
Mr Morley: There is also a principle
as well in that we believe this is an industry issue and therefore
there should be an industry contribution. I think we are being
very generous in relation to the contributions we are making.
To give you an idea of the figures—and I will not read them
all out because there are a lot of them and you might want to
look at these to analyse them properly—in terms of the response
from small units, the total number is 47,453. We had no reply
from 39,457.
Chairman: It is because all of the post
offices have closed!
Q65 Diana Organ: It is behind the
mantlepiece clock.
Mr Morley: I suspect so. On the
medium-sized units we have a total figure of 43,943 and 28,203
have not replied, so the response has not been that great.
Mr Jack: I hear what you say about the
scheme and I am sure there are great efforts being made by the
National Farmers Union and others to get this through. It is an
interesting question. I bet you would have had a few replies if
you had said "if you reply to this by return of post you
get the first collection free". You would have had a lot
of uptake on that. Anyway, I think that gives us an indication
of the financial side.
Q66 Mr Borrow: Just following on
from the point that Mr Jack has just made, why should the taxpayer
pay anything?
Mr Morley: I think that is a very
good question, why should the taxpayer pay for it. We do not believe
that the taxpayer should pay for it. We also are not allowed to
pay for it all. I know it has been claimed that other countries
pay for it all, but it is not quite as simple as that. France,
for example, paid for it by a tax on meat, some countries have
no contribution whatsoever, and there are a few other countries
who have a subscription scheme along the lines we have been proposing.
What we are proposing is not very much out of line with what other
countries do.
The Committee suspended from 3.32 to 3.42
for a division in the House.
Chairman: We will carry on. Mr Borrow
was in the process of asking a question.
Q67 Mr Borrow: Minister, my understanding
of the situation was that the Department drew up a draft scheme
or had some ideas about a scheme in April 2002.
Mr Morley: Yes.
Q68 Mr Borrow: And then spent a year
or so in discussions before the current scheme emerged. Were there
specific reasons that those discussions went on so long?
Mr Morley: There was a hiatus
because the NFU principally wanted 100% government funding and
we made it clear that that was not an option. While we were prepared
to negotiate with them on details, it was never going to be 100%
and for a while they did not want to negotiate unless it was on
the basis of 100% funding.
Q69 Mr Borrow: What was the difference
between the original concept of the scheme and the scheme that
emerged? Were there major changes as a result of that?
Mr Morley: The major change was
the split in the contribution. I think it is fair to say that
we did agree to an additional contribution over a three-year period
to get it off the ground, although there was always an offer of
funding to help the scheme get off the ground. To be fair the
NFU, and indeed other organisations, when we reached agreement,
have been very strong supporters and advocates of it.
Q70 Mr Drew: We have talked a lot
about funding so I am not going to go over the same points again.
Let's suppose that the scheme gets up and running, Elliot, and
you have got the numbers obviously, how long will the Government
be committed to its side of the bargain? Is it an endless contribution?
Mr Morley: It will vary. The additional
funding is over three years on a regressive basis. This is all
from ourselves and the devolved administrations, the same approach.
Some of the underpinning money is for BSE and TSE monitoring.
We monitor potential BSE in all fallen cattle and we also take
quite a large sample of sheep. We do not do all sheep but quite
a large sample of sheep in relation to scrapie monitoring and
TSE monitoring. That funding is likely to be an underpinning funding
for some time to come.
Q71 Mr Drew: And what happens if
the number of contributors drops?
Mr Morley: Again, that is a decision
for the industry to make. It is like everything else, Chairman,
the more people who participate, then the lower the unit of cost
and the bigger the benefits and advantages there are to those
people in the scheme.
Q72 Mr Drew: But it is fair to say
if there were a drop off after an initial good couple of years
then the scheme is not endless?
Mr Morley: If there were lots
of people who withdraw or if the industry felt it was not viable,
then of course it could jeopardise it. I must emphasise it will
be an industry run scheme not a DEFRA run scheme, so the decision
is not for us.
Q73 Paddy Tipping: Let's talk about
the scheme. Supposing it gets off the ground. You have extended
the consultation period to 28 May and you have then said it will
take another three months to set up.
Mr Morley: If the scheme is viable
it will be about three months to set it up.
Q74 Paddy Tipping: So a starting
date of the middle of October, something like that? Explain what
this scheme is going to look like. You have been at pains to tell
us that DEFRA is not going to run it, it is an industry scheme,
what kind structure is it going to have?
Mr Morley: It is along the lines
that Mandy was talking about.
Q75 Paddy Tipping: Like the AA.
Mr Morley: A bit like that.
Q76 Paddy Tipping: I am not sure
they would like this comparison.
Mr Morley: I am not sure they
would like it very much.
Q77 Paddy Tipping: They could use
it in their adverts.
Mr Morley: They could use it to
jump start animals maybe! What they would do there is provide
a phone contact, a help line number. We have a help line number
set up now to advise farmers and indeed if this scheme does not
get off the ground we would not be averse to funding some kind
of centralised help line to give people the contact points of
their nearest collector basically. I think the idea would be that
you would have a national scheme, and all the major renderers
and knacker industries would be part of that. They would decide
themselves where animals would go, it would be geographical I
guess, they would have participating members across the whole
country in different regions and they would ring up their participating
members for collection. They are likely to be people already involved
in the collection of fallen stock.
Q78 Paddy Tipping: So this is going
to be an umbrella body with a payment into it?
Mr Morley: To join you would pay
a subscription. The subscription would go into the scheme and
therefore there would be an element of cash upfront for the renderers
and everybody else involved to finance it, and of course that
would be added to by the payments that we make in relation to
what we already pay to various companies and organisations.
Q79 Paddy Tipping: So DEFRA staff
are not going to be an involved in the scheme?
Mr Morley: Not directly involved,
no.
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