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Lord Mackie of Benshie: My Lords, I, too, thank the Minister for repeating the Statement. It is an encouragement. However, as the noble Lord, Lord Carter, said, it has been four weeks, and during that time a number of people have suffered immense distress and financial loss. Can the Minister tell me whether the Government mean to do anything about those people who have had to sell their animals at a great loss? I see no way under this scheme that they will be compensated. Those are the people who have already suffered greatly.

I was pleased to see that the qualifications for intervention are to be widened. I always thought that the intervention scheme took in the best animals, good meat, and put out poor meat some months later. If the system is extended to take much wider categories of meat off the market, and if that is done immediately, it will help to restore normality.

The six-month period in which to alter a system of marketing older beef is too short. You cannot change a farming system in six months. The Minister may well know that it takes nine months for a calf to be born. I understand that this is an interval that you cannot speed up.

I have already said that the intervention is welcome. It is totally necessary. It must begin and must be extensive immediately.

I do not wish to go into the Statement to a great extent because we have the debate tomorrow. That will be an opportunity for everyone to study the Statement and to add that to the experience that we already have of BSE.

As regards the slaughtering section, the assistance is welcome. I hope that it will be applied quickly because the sector is in dire straits financially. This assistance will give those people some hope that the bankers may support them until they can get out of their trouble.

I welcome the fact that the Statement says that,

I hope that when it is rendered into bonemeal--it makes the most marvellous phosphatic fertiliser--the Government will ensure that mistakes in the rendering industry which precipitated this crisis are not repeated and that the system is absolutely safe.

We must all work to reverse the ban on exports. It appears to everyone quite ludicrous that Mr. Fischler should say that he will eat beef and that it is perfectly safe, while the export of beef is banned. The sooner that companies such as McDonald's which use beef go back to using British beef which is guaranteed safe, the better.

I echo my relief that the nonsense about killing every animal in Britain if necessary has now been laid to rest. This I must say. I cannot excuse the Government because the first person I heard that from was the Minister of Agriculture himself.

The Earl of Lindsay: My Lords, I am grateful for the general welcome which the noble Lord, Lord Carter,

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and the noble Lord, Lord Mackie of Benshie, have given to today's package. Indeed, I am also grateful for the specific parts of that package to which they referred.

The criticism--I believe that it is totally unjustified--that they both decided to echo was that the Government are only now finally getting round to doing something. I remind noble Lords that this is, I believe, the fourth Statement by an agriculture Minister on this issue. In the first 20 days of this BSE saga we announced 20 measures. In the first 20 days we secured funding for rescue packages of somewhere between £500 million and £1,000 million. That is between £0.5 billion and £1 billion worth of rescue measures. We are now at about the 27th or 28th day and the number of measures is up by an equivalent figure, and so is the funding. From day 1 we were bringing forward measures and securing funds. We have acted positively and urgently throughout.

The noble Lord, Lord Carter, quite rightly pointed out that at 60 per cent. throughput our slaughtering sector is still well down on the activity that it requires. That is why such a large proportion of the measures that we have in place are aimed specifically at market activity. When the calf scheme, the residual beef scheme, intervention measures and all the other measures are accelerating that throughput, that 60 per cent., we hope, will rise significantly. It will also help many other related trades such as the haulage industry.

The top-up is based on a time limited six-month period. Both noble Lords queried that. We have taken advice both in England and Scotland from agricultural advisers as to the amount of time that it takes to change the feeding regime of an animal in order to bring it up to market weight prior to 30 months. We have been advised that if an animal at present is over 24 months and on a slow fattening regime, it is unlikely, whatever one does to that animal, that it could be marketed at under 30 months. However, if an animal is under 24 months today, it is possible to change the feeding regime and bring it up to a marketable weight under the age of 30 months. I remind noble Lords that we are urgently working on exemption schemes which will be specifically aimed at those breeds which are naturally slow fattening.

The noble Lord, Lord Carter, asked whether the minimum 25p per kilogram which has been announced for the first month is not too little; and said that we had not announced what will occur in the second month. The important point is that we wish to be able to exercise some judgment after the first month to see how things are going and whether any adjustments should be made.

The legislation that introduces this scheme is principally based on the Commission regulation which was adopted on 12th April by the Beef Management Committee. But the ban that we brought in more rapidly--it was an early and substantial measure announced by government in the early days in response to a consensus voiced from the farming community through to the retail community--on the sale of meat over 30 months old to consumers was under the emergency powers in the Food Safety Act.

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The quality assurance scheme, which we regard as important, is principally as regards traceability. However, the Government have a long history of involvement. Despite the derogatory comments made by the noble Lord, Lord Carter, about my right honourable friend the Prime Minister, throughout the agricultural departments we have a legacy of seeking to promote and stimulate quality assurance within the industry. I can speak specifically for Scotland. Along with Northern Ireland, we have the two longest and best proven track records of encouraging, through pump-priming, industry based quality assurance schemes. We recognise that while the Government may well have a principal role in traceability, the industries, which know the products and consumers best, should be the principal arbiters of what quality assurance schemes should and should not include.

As I have announced, the slaughter sector will benefit from the injection of about £110 million. The noble Lord, Lord Carter, is quite right, the Coopers & Lybrand audit value of the stocks stuck in cold stores and chill rooms is approximately £132 million. Coopers & Lybrand have been the impartial experts and were helped by the Meat and Livestock Commission. Their report is in the Library and it states that the book value of stocks in a chill room or cold store usually achieves between 80 per cent. and 90 per cent. of the maximum value in a normal market situation. Therefore, Coopers & Lybrand recommended 85 per cent. as being a realistic rate of return; that is the rate of return that they would normally expect. Therefore, the £110 million is a combination of the £30 million immediate injection which relates to cattle throughput plus the £80 million buying in the stock. It comes to a figure which is exactly 85 per cent. of the £132 million.

The noble Lord, Lord Carter, asked about the secure disposal of some of the waste arisings of the residual beef scheme. We are confident that the existing arrangements and capacity, in the rendering industry are sufficient to deal with the new arisings. However, we are aware that, given a change in pattern and quantity, the best practical environmental option must be the option which is chosen to dispose of the arisings of the residual beef programme. We are urgently discussing those options with the experts in terms of SEAC, the regulators in terms of the environment agencies, the waste industry and the renderers themselves.

The noble Lord, Lord Carter, asked about compensation on the unsaleable stocks in other parts of the food chain which as a government we are prepared to dispose of at our cost. He asked whether there would be some partial compensation offered for them. The important point is that the funds that we are able to bring to bear on the situation must be targeted principally at consumer confidence, market activity and ensuring that assistance is given to that part of the market which is most closely linked with activity and consumer confidence. Therefore, we have concentrated the targeting of resources at the farmers, the slaughterhouses, the cutting plants, renderers and in a sense at the consumer through the 30-month programme. We want the resources involved to be aimed at activity and confidence. What we cannot do is

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to spread the resources too thinly throughout the whole diverse industry and therefore lose the effect that concentration would have at the centre of the industry.

The noble Lord, Lord Carter, is right. Both national farming unions of England and Scotland have threatened legal action; we shall take legal action. The extent to which there is co-ordination between the different parties taking legal action is an issue on which it is premature to comment.

The statutory basis for the EC ban on UK exports (Commission decision 96/239) is as follows. It was adopted by the Standing Veterinary Committee acting under Council Directives 90/425 and 89/662 concerning veterinary and zoo technical checks on intra-Community trade in animals, animal products and meat. If the noble Lord wishes to pursue the statutory basis further, we could do so possibly in correspondence or perhaps in the debate which the House will have tomorrow.

The final cost to the UK taxpayer will no doubt be substantial. However, the industry is absolutely essential to UK agriculture. It is especially large around the fringes of the UK. As the noble Lord, Lord Mackie, knows, in Scotland the cattle livestock industry comprises 30 per cent. of our entire agricultural product. Tens of thousands, if not hundreds of thousands, of jobs depend on the beef industry. Therefore, although the final cost will become apparent when more judgments can be made and more decisions taken, at the moment it is too soon to say, but we are confident that the money involved, if well targeted, will be well spent.

The last point is on the suggestion made by the noble Lord, Lord Mackie, that McDonalds and similar chains should buy British beef once again. We have always said that and continue to say it. If the commissioner himself--and I believe that President Santer is of the same opinion--says that UK beef is safe to eat, then we cannot understand why certain large multiple buyers are not following that advice. In the light of those comments, it makes an irrational and disproportionate ban look totally ludicrous.

6.5 p.m.

Lord Boyd-Carpenter: My Lords, is my noble friend aware that many of us are grateful to him for repeating the Statement? Speaking for myself, I found it extremely reassuring and it seems to me that, faced with an enormously difficult situation, the Government have got a grip on it. I am greatly cheered by the manner in which my noble friend dealt with the issue and with his indication of the way in which the Government are handling an extremely difficult issue.

I have one question for the Minister. It relates to the ban by the Europeans on the export of British beef which is absolutely intolerable. Will my noble friend make it clear that, unless the ban is lifted speedily, we shall retaliate against other European financial activities, many of which are vulnerable to British retaliation?

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