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Mr. Philip Dunne (Ludlow) (Con): May I emphasise the importance of dairy farming? Prices are a matter of supply and demand, and if free school milk were withdrawn, it would be unlikely that that demand would be replaced by a demand for milk by parents and households. The element of demand would go from the marketplace, which would inevitably depress prices further. That would have a deleterious effect on the farming industry and many more farmers would thus leave it.

The importance of the debate resonates outside the House. Recently, the intervention of one of my hon. Friends had an impact on a major high street retailer. It was stocking chocolate oranges at the counter, but is now stocking apples and real oranges as a result of the intervention. I am impressed that the hon. Member for Chorley (Mr. Hoyle) has secured the debate and I hope that it will encourage even more schools to take up free school milk.

Mr. Hoyle: I am not quite sure who has all the chocolate oranges at Smith's any more, but that is another matter. The hon. Gentleman is quite right about the future of farming. We have a great chance to help farmers in the UK by ensuring that there is a market that we can expand as more children benefit from the nutritional value of milk.

I look around the Chamber and see my hon. Friends the Members for Middlesbrough, South and East Cleveland (Dr. Kumar), for Derby, North (Mr. Laxton), for North-West Leicestershire (David Taylor), for Heywood and Middleton (Jim Dobbin) and for Bolton, North-East (Mr. Crausby), as well as Opposition Members, who are taking a keen interest in the importance of not only farming, but the future of free milk in schools. Hon. Members on both sides of the House are supporting the benefits of free school milk and the benefits of that for British farming. Free school milk will play a key role in the future. There is no doubt that farmers in my constituency and dairy farmers throughout Lancashire welcome the opportunity to supply schools, and that must continue.
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The Minister is sympathetic towards farming. I know that he takes on board such concerns because he has said in Westminster Hall that he is taking up the challenge of trying to ensure that there is a future for farming in this country, as we must do. I know that he will be listening tonight and taking on board what is said. He will say to people in the Department for Education and Skills, "Let us help young people in schools and also British farming." We have the backing of the National Farmers Union, farmers and schools—everyone who matters and is concerned. That was why parents could not believe that a statement came out at Christmas—of all times—saying that school milk was being taken away. That is the problem when bureaucrats get in charge of the media, but thankfully this is now about politicians putting things right and doing right by the children and farmers of this country.

There is no doubt that we all benefit from milk. I   still get milk delivered at home. Entwistle has delivered to our family for years and long may that continue. There was a danger that if we eroded a market such as that for schools, we would affect the local farmers who deliver to the doorstep in any weather, be that rain or snow. When the supermarket is not there, I   know that our local farmer is there to deliver to our doorstep. We have that advantage, and the situation is exactly the same in all our constituencies. There is no doubt that the issue is emotive.

I was pleased that about 50 hon. Members signed the early-day motion in support of free school milk. That showed what we could do. It showed that politicians can get things right by working together, and that people listen.

Jim Dobbin (Heywood and Middleton) (Lab/Co-op): I have been mulling over what my hon. Friend the Member for Bolton, North-East (Mr. Crausby) said about fluoride in water. Would a combination of free milk in schools and fluoride in water improve the dental health of young people throughout the country?

Mr. Hoyle: The debate is about free school milk and we have to stick to that subject.

It is Government policy to promote healthy diets and we have seen the introduction of free fruit in schools—they distribute the fruit that the Government fund. I say to the Minister that if we are willing to fund that, we must not continue to give up the EU money to which we   are entitled. It is not often that we can get money, so   we should take advantage of the opportunity. I have raised that subject with the Lancashire local education authority. It is a big education authority that delivers superb results through good schools, but it has failed to take advantage of the extra money that is available. LEAs can apply for an EU subsidy for milk provision, but they shy away from making up the difference. However, it would take only £1.5 million to enable school milk to be provided to children up to the age of   11.

David Taylor : As well as the benefits and strengths of the Government's approach, does my hon. Friend acknowledge that the critics have two valid points, to which we hope the Minister will respond? The first is that the cost of administering the scheme is substantial in relation to the subsidy that is given. Secondly, there is
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an issue of the type of milk provided—whether skimmed milk is better for young people than the whole milk that   accounts for the greater proportion of the milk consumed.

Mr. Hoyle: As ever, my hon. Friend makes valuable points.

We have heard the announcement that school milk is to stay, but we want to make sure that that is not for the short term, but for the long term. That is the reassurance that we seek from the Minister. We also want the scheme to be extended, so what can he do in his capacity to get people round the table?

Mr. Crausby: Would it not make much more sense and make everyone happy to put fluoride in milk and provide milk to 11-year-olds? In that way, we would all benefit.

Mr. Hoyle: My hon. Friend had a full page in the Bolton Evening News saying how important school milk is, and it is very important. No doubt hon. Members here tonight will send out press releases saying, rightly, that this debate shows MPs at their best, delivering for our constituents. Thankfully, we have done that.

We have a good Minister and the right decisions have been made. We look forward to hearing what he has to say about the long-term future of school milk and about extending the scheme. What can he do through his good offices to work with the DFES? I am not sure where the   report came from and which Department made the decision—was it DEFRA or the DFES? What we do know is that the bureaucrats made a decision and it took elected Members to overturn it. I thank the Minister for that.

10.48 pm

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Jim Knight): I   congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on having secured this debate on the important subject of school milk. Given his record, it comes as no surprise that the issue has attracted his attention. He is adept at keeping his finger on the pulse of developments in the milk sector. Tonight, he is adding to his already formidable reputation for having a profound knowledge of the dairy industry and for being a consistent and vigorous advocate for it through parliamentary questions and his participation in the Adjournment debate on milk prices in November last year.

I am grateful to my hon. Friend for raising this subject tonight, because it gives me the opportunity to talk about the importance of school milk and what the Government are doing to support it. There has been much discussion of the publication of the recent economic evaluation of the school milk top-up subsidy. I am glad to have an opportunity to clarify that matter, because some of my hon. Friend's interpretation of events needs a little clarification.

The subsidy scheme is long-established and valued by many, including many in all parts of the House, particularly by those campaigning for good childhood nutrition, and by the dairy industry, which sees the scheme as helping to encourage children to develop a lasting taste for milk.
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The Government are proud of their track record in improving children's eating. As my hon. Friend the Member for Chorley mentioned, we are aware that poor diet can create a barrier to learning, affecting the ability to concentrate as well as contributing to health problems in both the short and the longer term. That is a matter of concern to all of us, although we feel that as a Government we have made some headway.

The food provided in schools is a key component of many pupils' diet. Getting it right is vital. That is why, in March last year, the Secretary of State for Education and Skills announced a package of measures to help schools and local authorities transform school meals. A key measure was the establishment of the school meals review panel, whose recommendations for nutritional standards for school food seek to promote water, fruit juices and milk as the preferred drinks in schools. It is recognised that milk is a valuable component of a balanced diet and a healthier alternative to soft drinks. I should make it clear that when I talk about milk as part of a balanced diet, I mean skimmed or semi-skimmed milk.

The Department of Health is also playing its part in promoting a more balanced diet. For example, the school fruit and vegetable scheme provides a free piece of fruit or vegetable each school day to all children aged four to six attending local education authority-maintained infant, primary and special schools throughout England. It also operates a welfare food scheme, which, among other things, reimburses certain day care facilities for providing a third of a pint of milk free of charge to children under five attending for at least two hours a day. As part of the current welfare food scheme reforms, changes to the provision of milk in day care will be considered. However, we do not expect changes to be made until at least autumn 2006.

Against that background of developing support for improving the diet of children in school, supporters of school milk have queried why the report was commissioned. I hope to explain this. The EU funds a scheme that must be made available across all member states and subsidises the provision of milk to primary and nursery schools. Participation in the scheme is entirely a matter for schools or local education authorities. Parents generally pay the difference between the actual cost and the subsidy. The UK applies only the   mandatory elements of the EU scheme, whereby the subsidy is payable on plain and flavoured whole and semi-skimmed milk and plain whole and semi-skimmed milk yoghurt. In practice, most milk is supplied as whole milk in one third of a pint servings. It is estimated that some 1.2 million children in England receive subsidised milk.

The EU subsidy on school milk was reduced in 2000. Since 1 January 2001, the UK Government have provided national aid to supplement the EU subsidy. The Government provide an annual maximum of £1.5 million in England, funded jointly by the Department for Environment, Food and Rural Affairs, the Department for Education and Skills and the Department of Health for this purpose. Annual expenditure has been in the region of £6 million to £7 million—that is, the EU scheme plus the national top-up. The Government provide funding for the
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supplement and, in practice, bear the cost of some 70 per cent. of the EU element. As has been said, administration of the scheme by the Rural Payments Agency and schools adds to its overall cost. That is an aspect of the report that we shall study closely.

The EU subsidy scheme and the national supplement are both highly thought of, but the fact that they are highly valued cannot exclude them from the Department's rolling programme of policy reviews. That is why the review was carried out. It is surely right that the Government should examine their programmes from time to time to assess whether they make the best use of public money. The report on the top-up's effectiveness and efficiency was commissioned from independent economists and was published on 4 January. At no point was a decision made by bureaucrats—that was the word used by my hon. Friend the Member for Chorley. The only decision that has been made is to carry on with the scheme. Up to that point, all we had was a very useful report from the independent economists. I defend my officials on that point.

The report found that the total whole milk subsidy per serving in December 2004 was just under 4p, with the top-up constituting 0.75p of that sum. On average, the remaining costs, which are usually met by parents, amounted to between 11p and 12p. The report was critical of the scheme largely on the grounds of its administrative cost and lack of clear rationale in terms of child health. A number of recommendations were made, including ending the top-up and spending the £1.5 million on the more targeted promotion of milk.

Together with colleagues at the Department of Health and the Department for Education and Skills, we considered the recommendations carefully, but—as has been pointed out—as politicians we decided for the following reasons that they should not be pursued and that the subsidy scheme should remain unchanged. As I   have said, what children eat has caused considerable concern, and the subsidy contributes to the Government's wider programme to improve nutrition and tackle health inequalities. The report concentrated on the scheme's value for money and did not cover issues specific to deprivation. However, it concluded that the withdrawal of the top-up could lead to 16 per cent. of school heads giving up participation in the scheme, which could affect more vulnerable children in particular. We think it important to maintain a clear message on the role that school milk plays when we try to promote healthier alternatives to soft drinks in schools and focus on improving nutritional standards. All those factors helped to persuade us that now is the right time to alter a scheme that involves a relatively small amount of public money, but that forms a significant plank in the Government's nutrition programme.

One of the report's key recommendations was that funding should be expanded for the successful elements of existing programmes to increase teenagers' milk consumption, and my hon. Friend the Member for Chorley clearly feels strongly about extending the scheme to secondary schools. In 1996, the previous Government ended the subsidy for secondary schools largely due to public expenditure pressures and chose to focus attention on younger children. All Governments
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face public expenditure pressures, and must make choices, and we believe that there are other ways to develop milk provision in secondary schools.

The Government have a part to play in promoting milk consumption, but the industry also needs to maximise the opportunities arising from the good work funded by the taxpayer, which is, after all, to its benefit. That is why we applaud the imaginative initiative operated by the industry and the Milk Development Council, which has led to milk bars being set up in secondary schools. There are now some 1,000 milk bars in England and Wales and, by all accounts, they have proved to be very attractive to teenagers, who are not the easiest people to please in my experience and certainly in my home. The Milk Development Council should be praised both for that initiative and for its other schemes that promote the provision of milk in schools, because it has done some tremendously good work in that area.

I shall resist the temptation to dwell on fluoride in milk, which is an ingenious idea. Fluoride is an issue that has preoccupied previous Health Ministers at the Dispatch Box, but I have listened to enough of those debates in my limited period in Parliament to know that it is easy to get sidetracked on that issue, so I shall stick to the subject of this debate. However, I pay tribute to my hon. Friends for their work on not only that issue, but the importance of school milk in their constituencies—the people of Bolton and elsewhere should be proud of their representation in this House.

The continuing success story on school milk together with the fact that the new school food standards will take into account appropriate levels of nutrient intake—including calcium, which can be lacking in older children—was another reason not to divert money from the subsidy scheme.
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We also bore in mind the possible negative effects on the dairy industry of any shift from the scheme in a period of far-reaching change. I noted the comments made by Conservative Members in support of the industry. I am sure that hon. Members on both sides of the House are well aware that it is having to absorb the effects of common agricultural policy reform and of moving towards a more free-market system. Given that Members on both sides of the House agree with using a free-market system, I should emphasise that it is inappropriate for the Government to intervene directly on pricing. That does not mean, however, that we are not pursuing the initiatives that we have discussed in previous debates in respect of the Dairy Supply Chain Forum and our ongoing discussions about the milk market with supermarkets and the Office of Fair Trading.

We are addressing concerns about low farm-gate prices and the increased concentration and buying power of the large multiple retailers. At this time of change for the industry, with those sorts of pressures, we should encourage the next generation of consumers to take advantage of the nutritional benefits of milk and provide stability for the dairy industry at a time when there is so much change elsewhere.

For those reasons, we have decided not to make any changes to the top-up scheme. We believe that an early announcement would stop further unnecessary speculation on the report's findings. Understandably, given the nature of the media reporting of this independent report, people believe that the decision—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, Madam Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.

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