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Lord Livsey of Talgarth: My Lords, will the Minister address the fact that the dairy farming industry has been seriously affected, because it cannot, at present, produce milk at a profit? It is not subsidised. Given that self-sufficiency rates have decreased by more than 10 per cent in the past 10 years, what impact has that made on the balance of payments and how many billions of pounds is that worth?

Lord Whitty: My Lords, before I answer the noble Lord, perhaps the House will allow me to apologise to him because, in the reply I gave him on self-sufficiency on 9 February, I said that the figure was 72 per cent for self-sufficiency, when it was actually 74 per cent. That is a level of self-sufficiency of which no other industry could conceive. Therefore, agriculture is still doing pretty well in an increasingly liberalised market. The dairy sector is the wrong example to give in relation to self-sufficiency. While there are other problems there, we are virtually 100 per cent self-sufficient in the liquid milk market.

Lord Peyton of Yeovil: My Lords, is the Minister aware that his original Answer smacked very much of the old days of MAFF, with a detachment and failure to recognise that a healthy agriculture industry in this country is essential in the long term—I repeat, the long term?

Lord Whitty: My Lords, I hesitate to defend my predecessor department, MAFF, because it had a bad reputation in certain respects. However misguided some of the policies that it and the European Union were occasionally engaged in, its concern for agricultural
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production was pretty clear. Yes, we, in this Government, want a healthy, competitive and profitable agriculture sector, which will benefit the whole economy as well as rural areas. Our policies are directed to that end.

Lord Grantchester: My Lords, a large element of demand for UK produce is in the hands of public sector bodies. What measures are being taken to help source local supplies under the Government's public procurement policy?

Lord Whitty: My Lords, my noble friend is correct to say that public procurement is a significant part of the market. One disturbing matter that we discovered in our analysis of the market was that the level of UK procurement in the public sector was lower than that which is obtained in the average supermarket. Therefore, we have taken steps, through the Public Sector Food Procurement Initiative, to ensure that departments ranging from prisons to the education service focus more on local and sustainable food. The effects of that are beginning to be seen through the system.

Baroness Miller of Chilthorne Domer: My Lords, has the Minister seen the Farming Industry Marketing Strategy published by the Tenant Farmers Association and the National Beef Association, which is a clear critique of the fact that far too much purchasing by supermarkets and large retailers takes no account of whether or not the food is produced in Britain? There is space for a marketing organisation that deals with food for Britain and not food from Britain, which is what the Government only seem to be supporting at present.

Lord Whitty: My Lords, the noble Baroness is well aware that there are restrictions on what government can do under the European rules on state aid for promotion of British products within Britain. That constrains our action, although I fundamentally agree with her. There are indirect ways in which the Government and the industry promote British produce. But I would repeat that over 70 per cent of produce in the supermarkets is British—particularly in the areas with which the organisations to which she referred are concerned—and in the fresh meat market we are doing remarkably well. The publication she mentioned is a good analytical document, but I do not necessarily agree with all the conclusions.

ECHR: Law of Libel

Lord Clinton-Davis asked Her Majesty's Government:

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The Secretary of State for Constitutional Affairs and Lord Chancellor (Lord Falconer of Thoroton): My Lords, this was an exceptional case which did result in unfairness. We need to consider the judgment carefully and, if necessary, to learn lessons. We accept the Court's judgment on legal aid. The law was changed in the Access to Justice Act 1999 and funding can now be made available in defamation cases in exceptional circumstances. The judgment refers also to the need for the defendants' means to be taken into account in assessing damages. Given the usual principles of English law on compensation, which the libel damages in this case were, we are giving further consideration to the implications of this most unusual case.

Lord Goodhart: My Lords—

Lord Clinton-Davis: My Lords, I believe that I am entitled to ask a supplementary question.

Although I appreciate that the Government must have time to consider the implications of that important judgment, when can we expect a definitive statement from them on the issue? Secondly, although I appreciate the circumstances to which my noble and learned friend the Lord Chancellor alluded concerning the 1999 Act, will he also ensure that the House will be told if any extension of legal aid to defamation is made? In my view, it is not enough that that should be done only in extraordinary circumstances.

Lord Falconer of Thoroton: My Lords, perhaps I may deal with the second part of the question first. On the basis of the judgment in the case, we do not intend to extend legal aid generally to defamation cases. As my noble friend rightly points out, Section 6(8)(b) of the Access to Justice Act 1999 allows funding in defamation cases in exceptional circumstances. That was introduced only after the McDonald's libel case to which the European Court judgment refers. We think that that deals with the problem identified in the McDonald's case. I pay tribute to my noble friend Lord Clinton-Davis because he was instrumental in including Section 6(8)(b) in the Bill, with the foresight for which he is famous.

As for the first part of the question, I cannot tell when we will complete our consideration of the judgment, but it will be as soon as possible. This litigation has now been going on since 1990—for 15 years. The events in respect of which the litigation relates occurred in the mid-1980s—20 years ago. That makes Jarndyce v Jarndyce look like a fast-track case.

Lord Goodhart: My Lords, will the Government initiate a wider review of the whole question of the libel laws of this country? England has some of the most draconian libel laws in the world, which is why it has become a preferred forum for litigants from all over the world, even though publication may have been very limited in this country. Would it not have been
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better if McDonald's had started from the beginning by realising that its case had very little hope of success?

Lord Falconer of Thoroton: My Lords, in relation to an overall review of the libel laws, our first step is to consider the effect of this judgment. I do not commit myself to an overall review of the libel laws, but I commit myself to a review of the effect of this judgment. In the light of that, we will then consider the overall position of the libel laws. As for who won and who lost in this case, McDonald's won in the English courts and received £40,000 damages. It lost in the European Court of Human Rights. The estimated costs that it spent in winning that £40,000 were £10 million. Draw your own conclusions as to whether it improved or deteriorated its reputation by doing that.

Lord Borrie: My Lords, would my noble and learned friend care to say whether the phrase "exceptional circumstances" may set rather too high a hurdle for obtaining legal aid, because of the need for equality of arms between two sides in the case and for the court to receive adequate advice from both sides to reach the right result? Would he comment?

Lord Falconer of Thoroton: My Lords, the principle on which we operate in relation to legal aid for defamation is that we do not think that in the normal case legal aid should be available, because the legal aid budget is stretched. In the area of civil legal aid, we believe that matters such as social exclusion, housing, debt problems and family problems come before financing defamation actions. I therefore think that the term "exceptional" is right; the barrier should be high before defamation proceedings are given money. I entirely agree with my noble friend: in those exceptional cases, one is seeking to achieve equality of arms between the big battalions and the little person who is trying to fight a libel action.

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