Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


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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