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Lord Stanley of Alderley: My Lords, I am sorry to interrupt my noble friend, but that is not happening at the moment. I can tell him of two abattoirs that are doing it on teeth.

The Earl of Lindsay: My Lords, I took advice on this matter just before speaking in order to give my noble friend a clear answer. If I have anything to add to that simple answer, I shall contact my noble friend.

My noble friend also asked about open air incineration. The noble Lord, Lord Rathcreedan, also mentioned it. There is no plan at present to use that option. The intervention board is already letting contracts to closed incinerators to become involved in the scheme. We have other options to pursue to increase capacity, but at the moment no consideration is given to open air incineration.

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My noble friend Lord Stanley also asked about the price he will be getting for his cattle after 31st October. While on 1st November he will continue to get a top-up for his clean beef and his bullocks and heifers, on 2nd November the top-up ends, as was always intended. That is based on the advice given to us by agricultural advisers north and south of the Border that farmers with six months' notice could with most herds achieve changes in their feeding patterns to ensure that they achieved a market weight under 30 months.

The drop in the basic rate from 1 ecu to 0.9 of an ecu reflects a number of issues. I would encourage all noble Lords who felt that was disappointing to think about two or three simple factors. First, the rate that is paid is meant to reflect the market that exists beyond the scheme. Otherwise, the scheme begins to distort the market. It can encourage farmers to grow cattle for the scheme itself. It can also begin to induce a movement of cattle into the United Kingdom--perhaps from the Republic of Ireland or from other places--because we are offering a compensation which is more than the market is offering. It was important that we avoided a distortion that had crept in. Secondly, it is important that the money that is available to help the beef industry is targeted as much as possible at the survival of the beef industry.

The cattle coming to the 30-month scheme serve a useful purpose in terms of consumer confidence and supply and demand, but it is important that the compensation that they attract is not above that which is fair within the market at the time. It is more important that the money that is available is used for specifically targeted schemes for the beef industry, which is suffering the most, than that we should over-compensate all those cattle across UK agriculture, be they dairy or beef, which happen to be coming in through the over 30-month scheme.

With the leave of the House, although I realise that I am now over my time limit, I should like to answer one or two more of the questions that have been raised. The noble Lord, Lord Carter, asked about progress with regard to tallow, gelatin and semen. Since the Commission decision lifting the ban on exports of gelatin and tallow made from UK raw materials was published, new scientific evidence has cast doubt on the conditions set out for the production of gelatin. However, manufacturers may continue to produce and export gelatin for those uses if it is made from imported raw materials. On tallow, legislation will be introduced soon which will implement the requirements of the decision. On semen, where the ban on exports was totally unjustified from the beginning, although the export markets are now open to us again, it is taking time to regain our lost markets.

The noble Lord, Lord Carter, asked about new money versus old money. It would take too long to mention all the schemes, but they all involve new money. A recent announcement stated that this autumn the first instalment of suckler cow premia and beef special premia will be paid at a rate of 80 per cent. instead of

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60 per cent. We recognise that that helps the cash flow of many farmers and that a good cash flow can mean the difference between survival and otherwise.

I was surprised when the noble Lord, Lord Carter, asked why there had been such a delay with regard to cold storage. Cold storage has been available from an early date. Some cold storage facilities can be identified and accessed quickly because the construction and location are right and because they are empty. Other cold storage facilities have to be emptied of their existing contents and there needs to be negotiation. We are converting the government grain stores, but that involves a few months of building work. Within the next two weeks additional cold storage facilities coming on stream will provide extra capacity for about 118,000 carcasses. That gives some idea of the effort that has been made over many months to set up a continuous stream of new storage facilities.

I turn now to the restriction orders. The Florence criteria envisaged an accelerated slaughter programme which would simultaneously increase the already dramatic decline in the incidence of BSE, improve public confidence and answer some of the questions relating to animal health and public food safety. During the Florence negotiations, restricting animals on farms was not regarded as a factor of sufficient significance. Therefore, that matter is in the pending tray at the moment but, as all noble Lords know, not all the details of the BSE saga have remained unchanged. Issues such as restriction orders may well be back on the agenda at a later stage.

I turn now to the subject of BSE in pets. I regret the fact that the Independent ran such an alarmist article without getting its facts right. Indeed, I encourage members of the press to ponder their own actions throughout the BSE crisis and to work out to what extent they might have contributed to the sharp decline in consumer confidence in the initial phases through seeking headlines rather than prudent facts. Only material derived from non-specified bovine materials from animals under 30 months of age is permitted to be used in pet foods. Therefore, there is no chance of the sort of threat arising on which the Independent commented this morning. I understand that the Chief Veterinary Officer telephoned Mr. Jones this morning to try to explain the position. He left a message, but Mr. Jones failed to ring him back.

My noble friend Lord Dixon-Smith asked about casualties. We take casualties seriously and it is increasingly our practice to make sure that the slaughter houses involved in the 30-month scheme are obliged to accept casualties as part of their continuing involvement in that scheme.

A number of noble Lords referred to the export market and asked how it might re-emerge. The 30-month scheme anticipates that we shall regain our export markets as a result of hard evidence and criteria and that that will happen on a phased basis. That confirms some of the sentiments expressed tonight by noble Lords. The Government maintain that the regional basis, about which the press have speculated, is not a sustainable or justifiable way of dealing with the matter.

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Indeed, the Florence framework recognised that certified herds would be the way in which the ban would begin to be lifted. Therefore, I can reassure my noble friend Lord Dixon-Smith and others that we are seeking to re-establish our export markets as quickly as possible, that that will happen on a phased basis and by lifting the ban according to herds rather than by means of a less defensible regionally-based scheme. However, many of your Lordships will recognise that the criteria that will be agreed are likely initially to suit some parts of our beef industry better than others.

My noble friend Lord Dixon-Smith also mentioned advance payments for the dairy herd. We have had a scheme for advance payments which was really aimed at the beef industry, which has been the hardest hit. We recognise that beef is an important by-product of the dairy industry, but it must be admitted that the dairy industry has a continuing cash flow from dairy produce. If and when a further advance payment scheme is introduced, we shall take that factor into account.

I hope that I have covered a good proportion of the points raised. I am grateful that all noble Lords have spoken from their own experience and knowledge. I am thinking particularly of the noble Lord, Lord Granchester, who is a substantial and famous dairy farmer. I welcome him to his new seat in the House. I did not see him there when he last spoke on this subject.

I apologise for taking some time to cover these points, but I hope that my response will have answered some of the questions which noble Lords have raised.

Perhaps I may conclude by advising the noble Lord, Lord Carter, that he must have a very short memory indeed if he thinks that non-co-operation was a failure. The noble Lord and others have given us some history tonight, so I shall do likewise. On 20th March, the announcement was made that the experts at SEAC had established a likely but unproven link between the two diseases. As experts in the subject, they felt that there was a possibility of a link and, as we have always said that we shall protect the public from theoretical risk as well as proven risk, we took that information seriously. Two months later our colleagues in Europe were continuing to ignore the science which we were able to present, the common sense and the other reassurances that we were able to demonstrate. Europe was also ignoring the World Health Organisation and the International Veterinary Organisation. Indeed, the Commission itself was inclined to agree with the science that we presented in our own defence. After eight weeks of receiving very little co-operation, we introduced a policy which was designed to make Europe concentrate on the strength of our case. We wanted to achieve the terms of the Florence agreement. It took just four weeks to do so. Those terms were agreed on 20th June. It was an extremely successful policy.

I return onshore, to the domestic dimension to this crisis. Government initiatives are important and vital. We have provided funds to the tune of £2.5 billion to help the industry survive. I repeat that at the end of the day consumer confidence in beef is the more important factor. Therefore, a considerable amount of that money

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is aimed at the consumer and to ensure we have a beef industry in future which sustains the jobs we know it can.

We have throughout worked extremely closely with the industry. We have sought to consult and achieve a consensus whenever and wherever possible. That is the theme of our approach in continuing to tackle this crisis. I assure the House that we will not rest for a minute in responding to the problem. The beef industry in the United Kingdom is a great one. We are determined to maintain our commitment to the industry and the jobs that rely upon it. I say to all noble Lords who have spoken that perhaps the grievances some of them feel they have are based on misconceptions about the extent to which we are working to put things right and working in partnership with the industry who deserve to have everything put right.

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