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Lord Hooson: My Lords, is the Minister aware that, according to the BBC television news at lunch-time today, His Royal Highness the Prince of Wales knowingly ate beef on the bone at a dinner in Wales yesterday evening? "Knowingly" means that he knew beforehand that the beef was to be cooked on the bone. If he did so, was he thereby committing an offence? If so, what do the Government intend to do about it?

Lord Donoughue: My Lords, I do not know the details of the incident the noble Lord describes and I imagine that he does not either. Enforcement is a matter for the local authority.

Lord Monson: My Lords, can the Minister say why the Government are maintaining the ban on beef on the bone while introducing legislation which will facilitate the subjection of 16 and 17 year-olds to risks which are almost certainly several hundred times greater than those incurred by eating beef on the bone?

Lord Donoughue: My Lords, I do not know what those risks are. As I explained, these are not comparisons of like with like. The Government judge each case according to the risk. I have observed that many noble Lords opposite will call for a ban on one thing--for example, genetically modified foods--while complaining about nannying with respect to another. The Government have to take a decision in each case. On this issue we were firmly advised by the former Chief Medical Officer in December 1997. The new Chief Medical Officer has looked again at the issue on the basis of the advice provided by the advisory committee, SEAC, and has recommended that the ban should stay in place. We propose to look at the matter

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again in six months. If the risk situation with regard to public health makes it possible to lift the ban, we should be as happy as anyone to see it lifted.

Lord Davies of Coity: My Lords--

Baroness Carnegy of Lour: My Lords--

The Lord Privy Seal (Baroness Jay of Paddington): My Lords, if noble Lords ask their questions shortly, there may be time for the noble Lord, Lord Davies, and the noble Baroness to ask their questions, but I believe it is the turn of this side first.

Lord Davies of Coity: My Lords, although the risk in question is all important, can the Minister confirm that because the risk was not taken into account during the period of the previous government our beef industry was so damaged in Europe and the rest of the world that this Government will not allow that to happen again?

Lord Donoughue: My Lords, my noble friend is exactly right. The situation we are in derives from the fact that inadequate measures were taken previously. Measures were taken by the previous government to ban offals and brains in the food chain and to ban gut and meat and bonemeal. A line of control measures was taken by the previous government on exactly the same principle as that on which we have taken the present measures. The difference is that the party opposite, which totally supported the previous control measures, does not support the present ones.

Baroness Trumpington: My Lords, having stood in the Minister's shoes in the previous government, perhaps I may say that he talks absolute rubbish when he says that inadequate measures were taken previously. Is there a ban on beef on the bone on the Continent? If there is not, why should we not be able to sell our beef on the bone? Are we selling our beef, whether it is on the bone or not?

Lord Donoughue: My Lords, I am sorry that the noble Baroness thinks that I was talking nonsense. The view that I expressed is shared by many who have investigated this situation, particularly the inadequate controls on infected feed and meat and bonemeal. We await with interest the result of the Phillips inquiry. There is not a ban on the Continent because there is not there the scale of BSE crisis that we have had. We have now had 173,000 cases, which is why we are suffering in this country. The Government have negotiated hard to get the ban on exports of our beef lifted and we have made considerable progress towards that.

Baroness Byford: My Lords, farmers around the country will be very disappointed by the Minister's response. Other noble Lords have suggested that there is BSE on the Continent; we are not the only country that has problems with it. We are sympathetic with regard to the uncertainty which the noble Lord expresses. However, does it not seem ridiculous that it is possible to go into one shop and buy cigarettes--

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which we know kill people--at the age of 16 while one cannot go into a shop and buy beef on the bone, from which there is a very small risk of dying and about which, as the noble Lord said, there is a great deal of uncertainty? Surely that does not make sense.

Lord Donoughue: My Lords, there is no comparison between tobacco and cigarettes, about which the risk is known and where the item one is buying is clear, and beef on the bone where often consumers would not know they were eating it. As far as the farmers are concerned, actions are being taken to restore confidence in beef to help farmers.

National Savings Pensioners Bonds

2.55 p.m.

Lord Ellenborough asked Her Majesty's Government:

    What effect will be felt by pensioners as a result of the recent falls in the rates of interest paid by National Savings pensioners bonds.

Lord McIntosh of Haringey: My Lords, pensioners bonds pay monthly income at rates fixed for five years. Existing holders will not be affected by new lower rates before their fifth anniversary. For new investors or those holding beyond the fifth anniversary, the guaranteed rate will reflect the general fall in interest rates made possible by the Government's success in bringing inflation under control. Lower inflation benefits everyone, including pensioners.

Lord Ellenborough: My Lords, I thank the Minister for that Answer. Will he draw to the attention of his right honourable friend the Chancellor the fact that, when these pensioners bonds were issued five years ago for a five-year fixed period, they were launched at a deliberately attractive rate of 7 per cent. when the base rate at the time was 5½ per cent.? Five years later, the base rate is also 5½ per cent. but the new pensioners bonds are to be issued at a derisory rate of only 4¼ per cent. Does that not show a callous indifference to pensioners and those on fixed incomes who often have to pay charges and bills at a rate considerably higher than the rate of inflation?

Lord McIntosh of Haringey: My Lords, I have taken care to examine the record of pensioners bonds' interest rates against the five-year gilt market rate over the entire period since 1994 since the introduction of pensioners bonds. Whether looked at in real terms or nominal terms, there is a close correlation between the five-year gilt market rate and pensioners bonds' rates; in other words, pensioners bonds' rates were not particularly favourable in 1994 and they are not particularly unfavourable now.

Lord Ezra: My Lords, the question asked by the noble Lord, Lord Ellenborough, raises the issue of the extent to which the Government wish to encourage savings. If they really wish to do so, the example set by

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the new interest rate on pensioners bonds is not likely to do that. Should the Government not be setting an example to the rest of the financial sector that savings are desirable?

Lord McIntosh of Haringey: My Lords, I agree with the noble Lord that we should be encouraging savings. A falling savings ratio is indeed undesirable. But pensioners bonds are only one very small part of the range of investment possibilities even from National Savings, let alone from the private sector. I do not accept the conclusion which the noble Lord draws, any more than I accept the conclusion that the noble Lord, Lord Ellenborough, drew. These are not derisory rates, they are comparable to rates in the private sector.

Viscount Bridgeman: My Lords, does the Minister not agree that in an era of falling investment returns, there is a redistribution of wealth in favour of borrowers at the expense of savers, in this case the elderly and pensioners? Does he not accept that the Government must give high priority to ensuring that there continues to be a safe, simple investment with a real rate of return, as my noble friend Lord Ellenborough indicated, for this potentially vulnerable section of society?

Lord McIntosh of Haringey: My Lords, I do not accept that pensioners fall into one category rather than another. There are pensioners and non-pensioners who are borrowers and pensioners and non-pensioners who are savers. If the noble Viscount is saying that it is the responsibility of National Savings to provide a wide range of opportunities for different kinds of people, I can assure him that that is exactly what they do.

Lord Monson: My Lords, the Minister made reference to National Savings. Does the noble Lord agree that the impending fall in the average return on Premium Bonds to 3¼ per cent. is proportionately much greater than the fall in base rates over the same period?

Lord McIntosh of Haringey: My Lords, if that is the case, I do not understand why Premium Bonds are doing so well at the moment. If the allegations about pensioners bonds are true, I do not understand why it is that of those bonds that mature in the first quarter of 1999 half are being re-invested in pensioners bonds and nearly all the rest in other National Savings products.

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