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Meat and Livestock Commission Levy (Variation) Scheme (Confirmation) Order 1998

2.6 p.m.

Lord Hoyle rose to move, That the draft order laid before the House on 21st July be approved [43rd Report from the Joint Committee].

The noble Lord said: My Lords, the Meat and Livestock Commission was established by the Agriculture Act 1967 with the aim of promoting greater efficiency in the livestock industry. It is an executive non-departmental public body which is funded by means of a levy paid by slaughterers, producers and exporters.

Funds raised from levies make possible the various functions of the MLC. These include the promotion of red meat on television, in the media and at the point of sale. Your Lordships will, for example, be familiar with the highly successful "Recipe for Love" campaign, which was launched by the MLC in 1994 and which has done much to keep red meat as part of a balanced diet and helped to restore the consumption of beef to pre-BSE levels.

But the MLC does not confine itself to beef. It is also concerned with lamb and pigmeat. At the moment the MLC is running a £3 million pigmeat promotion, working with the industry and with retailers. The MLC is also to be commended for innovation to help the industry; for example, it is at the moment developing

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pork mince. The MLC has also developed new stock products in order to help the catering industry adapt to the beef-on-the-bone ban.

I am pleased to tell your Lordships that we are making progress on the lifting of the beef export ban. Exports of beef from the Northern Ireland Export Certified Herds Scheme have begun. The Commission's date-based export scheme proposal was voted on by the EU Standing Veterinary Committee on 4th November. A simple majority of states, eight in total, supported the proposal. The next step is a decision by the Agriculture Council on 23rd and 24th November. If the Council votes the same way as the 4th November Standing Veterinary Committee, this would result in the adoption of the date-based export scheme.

Once the ban has been lifted, the MLC will continue to work closely with the industry to recover old markets and find new ones. The MLC is already helping the industry to export lamb, and it should be noted that exports of pigmeat are now at record levels. Such achievements would not have been possible without the work of the MLC, much of it in conjunction with Food from Britain.

The order is concerned with increasing the levy maxima, and I will concentrate on that specific topic. I well understand that levies are never popular, particularly with the farming community and when the market is depressed. However, as I mentioned earlier, they are essential for the work of the MLC, which is more important now than it has ever been. The MLC was careful to consult the industry about the increases proposed in this levy order and amended its proposals after the discussions to take account of the industry's views. I am pleased to say that these proposals are now widely supported by the industry organisations.

This new order will not, of course, increase actual levy rates. I stress that these are a matter for the MLC, in consultation with the industry. The order confines itself to increasing certain levy maxima and changing certain MLC levy collection procedures. When the MLC asked the Government for an increase in the maxima so that it could plan for three to four years ahead, we agreed on condition that it gave an undertaking not to seek any increase in the levy paid during the 1998-99 financial year. We also requested that the levy should not be increased after that date without full consultation with the industry. The MLC readily agreed to both stipulations. Indeed, it does not at present intend to increase the rates next year, although it is vital for them to have the flexibility to do so, in consultation with the industry, given the current uncertainties in the meat markets.

Turning to the detail, the maximum charges payable in respect of general and species promotion expenses for cattle will be increased from 219p and 280p per head respectively to 350p per head for both types of levy. The maximum charge payable in respect of general expenses for calves will be increased from 14p to 100p per head and for sheep from 39p to 40p per head. There will be no changes in respect of pigs or in respect of species promotion for sheep. At present the rates paid for the general and the species promotional levies are

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205p and 230p per head for cattle, 31p and 32p for sheep, 40p and 60p for pigs, and 14p for general expenses in relation to calves.

The order will also provide for improvements in the levy collection arrangements in four particular ways. First, it will provide a statutory trust which will strengthen the MLC's claim on the producer component of the levies where a levy payer--for example, a slaughterer--goes into liquidation. In the past, producers' money which has been passed to slaughterers explicitly for onward transmission to the MLC has been lost to the liquidator when a company has been wound up. The change in the law will maximise the MLC's income and I know that producers will welcome it. Secondly, the order will permit the contracting-out of levy auditing to professional staff from national accounting firms, which will provide the opportunity for increased efficiency. Thirdly, the order will allow the MLC to recover interest on overdue debts. And, fourthly, the existing arrangement in respect of the collection of levy by auctioneers will be formalised by a change to the law in order to give auctioneers a statutory right to collect the levy.

Finally, I know that there is debate in many parts of the industry about the job that the MLC does now and what it should do in the future. However, these more strategic issues are most appropriately addressed in the quinquennial review. In the meantime, the MLC must carry out its obligations under the 1967 Act. The implementation of this order will allow it to do so in an efficient and effective manner. I ask your Lordships to support the Motion. I beg to move.

Moved, That the draft order laid before the House on 21st July be approved [43rd Report from the Joint Committee].--(Lord Hoyle.)

2.15 p.m.

Lord Luke: My Lords, I welcome the making of the order and will not delay the House for long. I am grateful to the Minister for putting on the record an explanation of the work carried out by the Meat and Livestock Commission and for giving details of the history behind the preparation of this order. The noble Lord was right to say that nearly all farmers have some concerns and complaints about the levy. It is, after all, only human nature to resist levies of all kinds. Some dislike it intensely, and practically all will think that, if the budget of the Meat and Livestock Commission were handed over to them, they could do a better job of advertising their lamb, pig or meat products. The Minister is right to recognise that some of the projected rises in the levy are steep but, provided that they are not brought into force immediately and such a maximum lasts for only a few years, then that is acceptable.

The Minister is absolutely right to acknowledge that the industry faces a dire crisis. Some farmers do not even receive 40p per head for the sheep that they bring to market yet could then face a levy of 40p for each sheep sold. That is a sore point at our auction markets and a sign of the crisis facing the industry. In the past two weeks I have attended the Meat and Livestock

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Commission annual awards ceremony and the Meat and Livestock Commission Pigmeat Breakfast. At each event I heard at first hand from those who are struggling to continue their businesses in the crisis. They are responding, as they would, in every positive and competitive way possible, but still find that their profits, if they have any, are disappearing fast and that their overdrafts are rising relentlessly.

I should be grateful if the Minister could respond to two questions on this issue which I hope do not stray too far beyond the boundaries of this short discussion. In the spirit of co-operation on this matter, I have given the Minister advance notice of those questions.

Can he say whether the Government have responded to the statement made to them on 13th October by the National Beef Association; and, if so, what that response has been? The National Beef Association called for an increase in the levy paid by meat processors and the introduction of a levy on retailers. Robert Robinson, the MBA chairman, said that the money should fund production oriented projects geared towards helping beef farmers. Can the Minister also say whether the report on the Farmers Weekly Internet site of 6th November is accurate with regard to the statement that MLC staff have embarked on a three-month tour of Britain to offer advice to farmers on surviving the livestock industry crisis and to outline the work being done by the commission to ease the problems? If that is indeed the case, it would be a most welcome initiative.

We on these Benches acknowledge the excellent work done by the Meat and Livestock Commission. Although, as I have said, farmers do not like paying compulsory levies and will always demand more say in the industry and more control over it, the Meat and Livestock Commission is their organisation and it is up to them to control it and run it as they wish. We are firmly convinced that if the MLC were not trying to promote British pigmeat, British lamb and British beef, our farming and livestock industry would be in even worse straits today.

I will close by observing, however, that the Minister should not be in any doubt that the work done by the MLC to alleviate the crisis will be as naught unless the Government play their own part effectively. I support the making of the order.

2.20 p.m.

Lord Hoyle: My Lords, I thank the noble Lord, Lord Luke, for welcoming the order. I agree with the noble Lord, and we recognise, that livestock producers are having an extremely difficult time. A number of factors have converged to give rise to the difficulties currently being faced by the livestock sector. The Minister is to make a Statement next week on the agriculture industry. We are paying attention to the matter.

These difficulties make even more important the part played by the MLC in promoting British beef. As I am sure the noble Lord will agree, never has there been a greater need to bring to the attention of consumers the excellence and quality of our home-produced meat. The measures contained within the order will enable the MLC to continue its sterling work.

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I now turn to the questions put to me by the noble Lord. I thank him for giving prior notice of them. He asked first about the possibility of extending the levy as proposed by the National Beef Association.

I understand that the association has provided a written submission to the Five Yearly Policy Review of the MLC. The submission includes its ideas in respect of the levy. These will be considered fully in the course of the review. Ministers expect to see the report in 1999. Therefore I assure the noble Lord that those matters are being taken into account.

As to helping the livestock industry through the present crisis, the MLC has produced a package aimed at beef farmers called Making Money Out of Beef, and one for pig farmers called Weathering the Storm. All commercial scale beef farmers and pig producers will have received a copy of the relevant package. In their regular meetings with levy payers around the country, MLC commissioners and staff offer a presentation to producers on what can be done to assist them. So steps are already being taken.

Finally, I agree with the noble Lord that it would be a disaster if the maxima were introduced immediately on the levy. It is intended to phase them in gradually over four or five years. I stress that that will be done in conjunction with the industry itself.

I submit that the measures before the House are necessary. They have been broadly welcomed by the industry. I commend the order to the House.

On Question, Motion agreed to.

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