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Lord Mackay of Ardbrecknish: My Lords, I had little to say about this regulation until earlier this evening. I was simply going to make the point, not just in respect of this regulation but the others too, that, frankly, the Explanatory Notes are a misnomer. They are explanatory only if one understands the whole issue sufficiently to be able to follow the original statutory instrument. I have no doubt that the Minister will tell us that it has always been thus. Maybe it is time we thought about changing things and making the Explanatory Notes more of an explanatory note and less of a repeat of small parts of the statutory instrument.

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However, the real point I want to make came to me in a fax I received from Mr Anthony Keeling of Elsoms Seeds. It is particularly about plants, not animals. I accept that much of the Minister's speech was about animals, especially, indeed, the human animal and the genes we all have.

If I may, I am going to do a version of what I might describe as a "Tam Dalyell"; that is, I am going to read out the letter. It is not a subject with which I am familiar. But the person who sent the letter has a point. Perhaps the principal point is this. The Minister mentioned that this statutory instrument was in adherence to a European directive. Have we gone any further than that European directive? In other words, have we gold-plated it in any way? Is there anything in this instrument which is a step further than the European directive? The reason I ask that will become clear in a minute.

Mr Keeling writes thus:

    "I am writing to you urgently as I understand [that this] will be debated tonight in the House of Lords and because representations made by me and our trade society, The British Society of Plant Breeders, have been ignored in this draft Statutory Instrument. In particular, completely contrary to the intention of European legislators, the current draft specifically disadvantages smaller breeders who do not have a major in-house gene bank and do not have direct access to biotechnology patents.

    "To be quite specific in section 7 of the draft SI 'patented biotechnological inventions: patent licences' it is now required that the applicant is the holder of Plant Breeders Rights in a plant variety and has another plant variety which is/was bred from that first variety but which cannot be exploited without infringing the patent concerned.

    "For consumers, a strength of Plant Breeders Rights legislation is that competitors are completely free to use a breeder's protected variety to create new varieties. In fact small breeders, without a large historic background of their own varieties, use competitors varieties as the main source of their parent material. (This is amply proven by the declared parents in National List applications.) The draft SI, therefore, effectively disenfranchises smaller breeders from being able to use the compulsory licence provisions! The British Society of Plant Breeders has made the point to the government's civil servants that the vital aspect which should be covered by this Statutory Instrument is that the applicant ('the breeder') should be a potential holder of Plant Breeders Rights. To encourage competition and smaller breeding enterprises it is crucial that this change is incorporated into this legislation in line with the letter and the intent of the European Directive concerned. The whole point of the compulsory licence provisions was to enable breeders, such as us, to have some equity in this area. As this draft stands, quite the contrary, patent holders will readily be able to obtain a compulsory licence to enable them to register 'our' variety incorporating their patented construct whereas, as I have indicated above, the converse is almost impossible for us".

I understand that when it comes to, say, winter wheat, the major player in this field is now Monsanto and that company owns around 80 per cent of the parents. Previously a small breeder could actually use those parents to breed their own variety. But under this statutory instrument they will not be able to do so. Mr Keeling's point is that that goes a lot further than the directive asks us to go. He suggests to me that this simply looks like protection for the market leader in any particular field.

I know that this is a complicated issue. As I do not pretend to understand it deeply, I do not expect the Minister to give me chapter and verse. If he is able to do so, I shall be extremely grateful and, as always,

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impressed by the noble Lord, Lord McIntosh of Haringey. But if he is not, I understand that he will write to me afterwards.

Lord Razzall: My Lords, I share the view of the noble Lord, Lord Mackay of Ardbrecknish, in his description of the documents given to us as being an explanatory memorandum. They use "explanatory" in the same way as we call fee-paying schools "public" when they are not.

However, a number of points have been raised by those who have concerns about this statutory instrument. I would welcome the Minister either answering tonight or writing to me through his officials. First, are we correct in assuming that under these regulations farmers are entirely safe using their own home-grown seed or can they do that only when it is clear that the sellers--that is, seed merchants or other sellers--agree to their using their harvest for seed? Or will farmers in future have to make entirely sure that they read the small print on the seed sacks in order to be safe in using their own home-grown seed?

Secondly, people have certain anxieties in relation to the human genome project and this statutory instrument. The great thing about the recent announcement on the successful completion of the human genome project was the fact that the information would be put into the public domain and not be associated particularly with private intellectual property rights. Are the regulations saying that, provided we can clearly identify the function of a sequence and that it has some industrial or medical application--for example, a breast cancer gene or a gene for muscular dystrophy--it can be patented? And does that mean that the consequence of these regulations is that private industry will run away with the profits from what has been widely advertised as being publicly-funded research?

Thirdly, touching again on a question raised by the noble Lord, Lord Mackay of Ardbrecknish--whether or not the regulations gold-plate the European position--how do the regulations fit in with the European patent position? I had understood that the European Parliament overturned the Commission's proposals to allow patenting of genome sequences. How do the regulations impact on that?

Lord McIntosh of Haringey: My Lords, I shall do my best to respond to the points being made, though some of them become a little bit recherche.

The most important point made by the noble Lord, Lord Mackay, was as to whether or not, as alleged by his correspondent, the regulations go further than the European directive. I can give him a categorical assurance that the regulations in fact copy precisely the terms of the directive. There is no gold-plating and no deviation from the directive's test.

I can confirm also that the British Society of Plant Breeders was consulted and expressed its views. As I have already said, in due course those views will be made public. But the fundamental point I have to make to the noble Lord, Lord Mackay, is that his point

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does not apply to Articles 1 to 11 of the directive, which is all that is being implemented by this order; it applies to Article 12, which is to be dealt with in the future by negative resolution rather than by this affirmative resolution. It will be dealt with under the Patents and Plant Variety Rights Compulsory Licensing Provisions 2000, which have not yet been laid, and discussions with plant breeders are ongoing. There is still an opportunity therefore for the correspondent of the noble Lord, Lord Mackay, to make his views known to officials of the Department of Trade and Industry and the Patent Office, to make sure that his point is fully considered. So nothing is lost by these regulations.

In relation to the point raised by the noble Lord, Lord Razzall, the European Parliament turned down an earlier version of the directive, but this version was approved by all the authorities from whom it needed approval. The regulations do not change the position of farmers and their home-grown seeds. There is a derogation from patent rights in any case for small farmers, and I guess that that will apply also to horticulturists.

As I believe I said in my opening remarks, the patenting of the genome sequence is not changed by this regulation; it is only an invention, not a discovery, which can be patented under patent law. As I understand it, what the noble Lord, Lord Razzall, was describing would fall into the category of a discovery rather than an invention. There is no proposal from the Commission for patenting the genome sequence. I hope that I have answered the points raised. I commend the regulations to the House.

On Question, Motion agreed to.

Consumer Protection Act 1987 (Product Liability) (Modification) Order 2000

8 p.m.

Lord McIntosh of Haringey rose to move, That the draft order laid before the House on 3rd July be approved [25th Report from the Joint Committee].

The noble Lord said: My Lords, this order extends the system of strict liability to include primary agricultural products. It is made under the Consumer Protection Act 1987 and is a product liability modification order. It extends the system of strict liability to include primary agricultural products and game--that is, food in its raw state. Food that has undergone some form of processing is already included.

The change means that under the strict liability system, as for other products, anyone injured by food sold in its raw state will now be able to sue the producer for damages without having to prove the producer negligent. However, the injured party must be able to prove that the product was defective and that the defect caused the injury. Producers in this context include farmers, food and vegetable growers and fisheries. The provision also includes importers of these products from non-EU countries. Other

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suppliers, such as wholesalers and retailers, would be liable only if they failed to identify the producer or their own supplier to an injured person.

The purpose of the order is to implement Directive 1999/34/EC, which amends the 1985 Product Liability Directive. This will be achieved by amending Part I of the Consumer Protection Act 1987, which transposes the 1985 directive in UK law. This order is made under Section 8 of the 1987 Act which provides for modification of the Act following any modification of the 1985 directive. The order will apply to England and Wales only. Under devolution, separate arrangements will be made in Scotland and in Northern Ireland. The new measure will come into force on 4th December 2000 and, therefore, the change will apply only to primary agricultural products put on the market on or after that date.

I believe that this is a further small but important step towards improving consumer protection in the all-important area of food safety. An added benefit of the amendment is that it sweeps away any confusion over which food products are covered by strict liability, as all food is now covered.

The original 1985 Product Liability Directive allowed member states to decide whether or not to include food sold in its raw state. At the time of the directive, concern was expressed that food in its raw state might be more prone to have hidden defects caused by environmental factors beyond the control of the producer. Moreover, due to bulk mixing of food products in their raw state--for example, in cereals--it was felt that there might be a particular problem in tracing the source of the product fault. In practice, these difficulties could happen to other products that are already covered by the original directive, so this brings into question why producers of food in its raw state should be given special treatment.

Experience of the directive has shown that few problems have arisen in this area. Four countries--namely, Finland, Sweden, Luxembourg and Greece--chose to include food in its raw state at the time of implementing the original directive and have reported no apparent problems. Further, the concerns that the directive would lead to excessively high insurance costs have proved to be unfounded. The only significant costs that arise are those of insurance. During our consultation exercise, we discovered that at least 75 per cent of farmers and growers--the vast majority--already have product liability insurance, as do most fish and shellfish producers. Therefore, I am convinced that this is a small price to pay for helping to restore further public confidence in food safety, which, in turn, will be to the ultimate benefit of producers as well as consumers. I beg to move.

Moved, That the draft order laid before the House on 3rd July be approved [25th Report from the Joint Committee].--(Lord McIntosh of Haringey.)

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