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House of Lords

Monday, 19th May 2003.

The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers—Read by the Lord Bishop of Hereford.

United Nations: Collaboration on Health and Security

Lord Hunt of Chesterton asked Her Majesty's Government:

    What lessons they are pressing upon the United Nations, its agencies and its member countries about greater collaboration in monitoring international health and security dangers, including improved verification and exchange of information.

The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, the Government strongly believe that an effective way to address global concerns, such as international health and security dangers, is by encouraging close co-operation throughout the United Nations. Ideally, that would involve national governments, civil society and business, as well as the UN Secretariat and various agencies and bodies.

Lord Hunt of Chesterton: I thank my noble friend for that reply, but will our Ministers and officials urge all countries, even the largest, to allow international monitoring, including of bio-weapons, health, and environmental disasters? Does she agree that the selective and negative approach adopted by some countries, which I witnessed at the United Nations conference on international disasters, can have serious adverse consequences both locally and worldwide?

Baroness Symons of Vernham Dean: My Lords, I agree with much of what my noble friend said. The fact is that the United Kingdom welcomes international monitors. For example, we think that the work that the World Health Organisation has undertaken in relation to severe acute respiratory syndrome, monitoring and addressing the problem on the ground in a number of countries, has been enormously important. My noble friend addressed the wider question of other forms of monitoring. He will know that in a number of countries there are particular sensitivities. We always encourage those countries to adopt international standards and to co-operate with international monitoring where possible.

Baroness Northover: My Lords, does the Minister agree that SARS indeed shows how important international institutions are today? After all, it was

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the WHO that urged action on countries that were reluctant to take such action because of fear for their economic position. As she will know, the WHO's powers are limited. Will the Government press the international community to extend those powers—to start with, to give the WHO the right to go in to monitor suspected outbreaks of disease?

Baroness Symons of Vernham Dean: My Lords, I agree that the SARS outbreak shows how important the international organisations are. The noble Baroness will know that the Government have closely followed World Health Organisation advice, because it is the international health organisation and because it has the resources and expertise on the ground to deal with an outbreak such as SARS.

Yes, of course we want more countries to welcome such monitoring, as I implied in my Answer. However, if the noble Baroness is asking whether we support now the intervention of the World Health Organisation, I think that several other international organisations would similarly feel that they should have the right to enter—I am thinking especially of the International Labour Organisation. That might raise difficulties in a number of countries. So at present, I think that it is better to proceed by encouragement.

Lord Soulsby of Swaffham Prior: My Lords, there is a reciprocal aspect to the noble Lord's Question: how much is this country collaborating with the international community? I ask that because, as chairman of the sub-committee on fighting infection of the Science and Technology Committee, I was in Geneva several weeks ago. One comment made by the World Health Organisation was that the United Kingdom was not as good as other countries in providing experts for either the short or long term. We shall attend to that question in our report, but does the Minister have any comment to make on that?

Baroness Symons of Vernham Dean: My Lords, I should like to know the detail of the claim about which the noble Lord has informed the House. In the past year, the Foreign Office has initiated regular meetings on UN issues, including with the specialised agencies, which include colleagues from all interested government departments.

In addition, the United Kingdom has played a leading role in setting up the global fund to fight AIDS, TB and malaria, which was launched by the Prime Minister and his G8 colleagues in Genoa in July 2002. So there are specific examples of the leading role that the United Kingdom has taken in co-ordinating with such international bodies. I am concerned if that is not recognised and would welcome a further conversation with the noble Lord, at which he may be able to give me some details.

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Milk Production

2.42 p.m.

Lord Mackie of Benshie asked Her Majesty's Government:

    Whether the break-up of Milk Marque is in line with their policy of encouraging co-operation in the farming community.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, Milk Marque was broken up in 1999 following a Monopolies and Mergers Commission report which found that it was exploiting its monopoly position in a way that operated against the public interest and to the detriment of its customers. I see no conflict between that decision and the Government's policy of supporting co-operation within the farming community.

Lord Mackie of Benshie: My Lords, I thank the noble Lord for that Answer, although I did not like it. Is he aware that, since 1999, the dairy farmers of this country have been operating mostly at a loss? It has been a very hard time for them. However, in Denmark, with its large co-operatives wielding some influence, and with the same thing in Germany, dairy farmers have prospered and kept the price of milk up to a reasonable level. A new organisation called Milk Link has been set up, which is exactly the kind of body advocated by Sir Donald Curry. It is growing fast, but if it grows too big or if the Government think that it has become too large, will they then use the Monopolies and Mergers Commission to declare that it must be broken up as well?

Lord Whitty: My Lords, it is important to recognise that, under competition law, the key issue is not the market position of an organisation; in accordance with that threshold, it is what a co-operative or other body does with its position. In the case of Milk Marque, it was found that it was exploiting its position to the detriment of consumers. That would not be the case for a large number of companies operating in a similarly dominant market position. Indeed, since the Milk Marque decision, a number of mergers have taken place both within the dairy sector and in farming more generally which have not been subject to any restriction by the monopoly authorities.

It is of course true to say that many in the dairy industry have feared that, in the light of the Milk Marque decision, such intervention might take place. I hope that the Office of Fair Trading has now taken steps to reassure the industry that that is not the case.

Baroness O'Cathain: My Lords, I declare an interest as a former managing director of the Milk Marketing Board, the predecessor of Milk Marque. Could someone undertake an analysis of exactly how the consumer has benefited to date from the break-up of Milk Marque? Certainly the farmers have not benefited and, in my view, the consumer has not

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benefited either. Before we embark on another competition exercise, it would be much better if we knew all the facts.

Lord Whitty: My Lords, a number of analyses have already been undertaken, the latest of which, by KPMG, looked at the whole structure of the dairy industry. It concluded that the lack of market power on the part of both producers and processors in relation to the retail sector is a problem for the industry, but it is not the key problem. That relates to product mix, the supply chain and, indeed, various international aspects regarding prices and subsidies. A number of structural issues have been highlighted, many of which have already been analysed. However, it is important to reiterate that a number of structural changes have been made without any intervention by the Competition Commission or the OFT since the Milk Marque decision was taken.

Lord Carter: My Lords, the Question mentions "encouraging co-operation". Is my noble friend aware that today saw the official launch of English Farming and Food Partnerships? I declare an interest as vice-chair of the organisation. It was formed as the result of a recommendation from the Curry commission to set up such bodies in order to encourage co-operation. Can my noble friend indicate what level of support the Government will be giving to it?

Lord Whitty: My Lords, I am very grateful to my noble friend for pointing out the launch today of English Farming and Food Partnerships. It is an industry body, led by industry, but closely following the lines recommended by the Curry commission to encourage all forms of collaboration and co-operation both within the farming sector and across the food sector as a whole. It is an important initiative which enjoys the Government's full backing and some financial support in relation to certain projects. However, it is important to make it clear that it is an industry-led body set up to carry out some of the recommendations made by the Curry commission.

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