Select Committee on European Union Fortieth Report


TSE ROADMAP (11408/05)

Letter from Ben Bradshaw MP, Minister for Local Environment, Marine and Animal Welfare, Department for Environment, Food and Rural Affairs to the Chairman

  I am writing to you to update your Committee about progress on this dossier following my letter to you of 28 November of last year.[95]

  The UK Presidency worked closely with the Commission, Council and European Parliament to draw together views from Member States on the TSE Roadmap. The Council's view of the Roadmap was presented on 19 December. The Council agreed that the key objectives of consumer protection and control and eradication of TSEs must be maintained; that any change must be underpinned by a sound scientific basis; and that the justification for any changes must be carefully and effectively communicated to consumers and other interested groups. The general view was that the areas covered by the Roadmap would be the basis for discussions on changes but that there were some higher priority areas than others.

  The Austrian Presidency has been focusing on making changes to the TSE Regulation, I reported on progress with this in my letter to you of 8 May and has not further discussed the Roadmap. However, EU Chief Veterinary Officers are due to discuss the priorities for change arising from the Roadmap at a meeting on 8 June.

  Two areas covered by the Roadmap have been taken forward separately. These are the lifting of the UK export ban and the increase in the age at which bovine vertebral column must be removed and destroyed as Specified Risk Material (SRM). The age threshold was increased from 12 months to 24 months with effect from 1 January 2006 except in the UK where we continued to remove vertebral column only in cattle aged over 30 months under the pre-existing EU derogation. However, when the EU export ban was lifted on 2 May, the UK was required to harmonise our SRM controls with the rest of the EU and vertebral column in cattle aged over 24 months became SRM. These changes were subject to consultation and I attach the associated Regulatory Impact Assessment, a signed copy of which has been placed in the House.

  In line with advice from SEAC, the UK is pressing the Commission to bring forward proposals to increase the EU age limit for vertebral column removal to 30 months.

  I will continue to update your Committee on progress on this dossier and to provide Regulatory Impact Assessments when significant specific proposals come forward for changes to BSE controls arising from the Roadmap.

22 May 2006

Annex A


FULL REGULATORY IMPACT ASSESSMENT

1.  TITLE OF PROPOSAL

  BSE: lifting the ban on the export of bovines and bovine products and harmonising Specified Risk Material (SRM) controls applicable in the UK with those in other EU member states.

2.  PURPOSE AND INTENDED EFFECT

Objective

  Legislative action to:

    —  enable the resumption of exports from the UK of eligible bovines and bovine products by repealing the Bovines and Bovine Products (Trade) Regulations 1999 (SI 1999/1103) and amending the TSE (England) Regulations 2006; and

    —  harmonise controls on bovine vertebral column, head meat and other SRM with the EU requirements that apply in other EU Member States by amending the TSE (England) Regulations 2006.

Background

  BSE was first identified in the UK in 1986. More than 183,000 cases have been confirmed in the UK to date, of which more than 95% were detected before 2000. In March 1996, the EU imposed a comprehensive, worldwide ban on the export of bovine and bovine products from the UK due to fears about the risks to human health posed by BSE. The GB legislation which currently implements the EU ban is the Bovines and Bovine Products (Trade) Regulations 1999 (SI No 1103). This legislation applies to live cattle, beef, beef products, bovine by-products and mammalian meat and bone meat. Parallel legislation implements the ban in Northern Ireland. Under this legislation, beef from animals slaughtered in the UK can only be exported under the Date Based Export (DBES) Scheme, and products made from imported beef can only be exported under the XAP (eXport APproved) Scheme. Both these Schemes are onerous to implement. Only relatively small quantities of UK beef have been exported under DBES.

  On 8 March 2006, the EU Standing Committee on the Food Chain and Animal Health (SCoFCAH) adopted unanimously a favourable opinion on a proposed European Commission Regulation to lift the embargo on UK exports of live cattle, beef and beef products. The Commission Regulation comes into effect on 2 May 2006. The Regulation includes some restrictions on exports that had previously been discussed with UK industry who had agreed that these were acceptable to achieve a speedy lifting of the ban with the support of all Member States.

  Under the Commission Regulation, the UK is required to ensure that the following conditions are met:

    (1)  cattle born before 1 August 1996 must not be exported;

    (2)  products from any cattle slaughtered before 15 June 2005 must not be exported;

    (3)  beef containing vertebral column, or any product derived from vertebral column, from cattle slaughtered before 2 May must not be exported; and

    (4)  SRM controls already applicable in other Member States must be implemented. These are as follows:

    —  vertebral column shall be classified as SRM in cattle aged over 24 months (at present the UK has a derogation to classify vertebral column as SRM only in cattle aged over 30 months at slaughter);

    —  the skull, exluding the mandible but including the brain and eyes shall be SRM from 12 months of age (at present the entire head is SRM from six months of age);

    —  spinal cord shall be SRM in animals over 12 months of age (at present the spinal cord is SRM in animals over six months of age); and

    —  trigeminal ganglia, thymus and spleen shall no longer be classified as SRM.

  EU legislation requires Member States to remove vertebral column in licensed cutting plants but includes a derogation permitting them to allow removal of vertebral column at authorised, monitored and registered butcher's shops. Simlarly, EU legislation requires removal of head meat at slaughterhouses but permits Member States to allow removal at authorised licensed cutting plants. The FSA Board agreed on 9 March to allow the removal of vertebral column at butcher's shops but for the time being to restrict the removal of head meat to slaughterhouses. The possibility of allowing the removal of head meat in cutting plants would be reviewed in the summer.

Rationale for Government intervention

  BSE was first identified in the UK in 1986. More than 183,000 cases have been confirmed in the UK to date, of which more than 95% were detected before 2000. The epidemic peaked at an annual total of more than 37,000 clinical cases in 1992 and the number of new clinical cases is currently at the lowest level since recording began. There were 39 clinical cases and 186 cases detected through testing in 2005, the vast majority in cattle born before August 1996. The UK's reinforced feed controls which banned mammalian meat and bone meal from feed for all farmed livestock, effective from 1 August 1996, have led to a particulary sharp fall in BSE cases in cattle born after July 1996.

  In 1995, the last full year before exports were banned, UK exports of beef and bovine products were valued at almost £600 million and exports of live cattle were valued at almost £78 million. From the time that the export ban was applied, it has been Government policy to seek its removal for products permitted for sale on our domestic market.

  UK legislation must be brought into line with EU legislation as soon as possible after the EU legislation comes into force. It this is not done, the Bovines and Bovine Products (Trade) Regulations 1999 will remain on the statute book but will be open to legal challenge and judicial review.

  Unless the TSE (England) Regulations 2006 are amended it will not be possible to enforce a 24 months age limit (as opposed to the current 30 months age limit) for the removal of vertebral column or to make use of the derogation allowing removal in specifically authorised butcher's shops.

  Similarly, it will be necessary to amend the TSE (England) Regulations 2006 to enable the UK to enforce the less restrictive (other than for vertebral column) list of SRM that will apply given the change in the UK's BSE risk status.

  Some 2.4 million UK cattle are expected to be slaughtered for human consumption per year. This includes an additional 0.4 million cattle aged over thirty months (OTM) that became eligible for sale for human consumption from 7 November 2005 when the OTM rule that excluded them from the market was replaced by BSE testing for cattle born after July 1996. It is especially important to allow exports in the light of additional supplies of UK cattle on the UK market, and also to apply the new SRM controls as soon as possible.

3.  CONSUMPTION

  The consultation on the anticipated changes to UK legislation began on 12 October 2005 with a closing date for comments of 4 January 2006.

  During the consultation period, a supplementary consultation on the export of cattle from the Irish Republic through the UK (the "UK landbridge") was launched on 14 December 2005 with a closing date of 27 January 2006.

  The EU Regulations will affect those who keep and sell cattle, hauliers, abattoirs, cutting plants, the meat processing industry, renderers, incinerators, independent butchers and other retailers, the catering industry, consumers, port authorities and those who would wish to export, or transport for export, beef, bovine products and live cattle. It will also be important to those concerned with the welfare of cattle and live exports. All these interest groups were consulted.

  The consultation documents and the summary of responses have been placed online on the Defra website. A total of 74 responses were received to the main consultation and four to the supplementary consultation.

Responses to the consultation

  Responses to the consultation relating to lifting the export ban were very strongly in favour of allowing trade in beef and bovine products to resume. Responses from farming organisations, cattle breeders and cattle exporters were in favour of lifting the ban for the export of cattle. This was opposed by animal welfare groups and others who are opposed to the principle of exporting live animals and who are concerned about the potential for cattle to be subject to longer journey times than would otherwise arise. Some respondents to the consultation exercise expressed concern that the Partial Regulatory Impact Assessment did not take sufficient account of the welfare of animals undergoing export.

  Responses to the consultation exercise were overwhelmingly in favour of allowing vertebral column from cattle aged 24-30 months to be removed in authorised butcher's shops which are monitored and registered for that purpose. There is no intention to make use of the option provided in the EU Regulation to allow vertebral column from cattle aged over 30 months to be removed in butcher's shops because the Food Standards Agency's Independent Advisory Group on replacing the OTM rule by testing recommended that vertebral column from OTM cattle should be removed in licensed cutting plants only.

  Opinion was divided on the derogation for head meat to be removed at specially authorised licensed cutting plants. The Food Standards Agency has decided not to implement this derogation for the present; it will be reviewed in summer 2006.

4.  OPTIONS FOR ACHIEVING THE POLICY OBJECTIVE

Option 1—Do Nothing

  Now that the EU has agreed to allow the resumption of exports of UK cattle born after July 1996 and of beef and bovine products from bovines born or reared in the UK after this date (subject to the exceptions set out under "Background" above) the UK must make the necessary implementing legislation. If this is not done, existing UK legislation in relation to both exports and SRM controls will be open to legal challenge and judicial review and there would be a period of legal uncertainty. Were the matter to come before a Court, the probable consequence of failure to reflect at national level the lifting at EU level of the export ban would be that inconsistent national legislation would be held unenforceable. The UK would be unable to enforce the removal of vertebral column from cattle aged over 24 months (instead of 30 months as now) and there would also be legal uncertainty about whether UK industry could sell head meat for human consumption.

Option 2—Amend UK legislation to administer and enforce EU legislation without making use of EU derogations

  This would involve repealing the Bovines and Bovine Products (Trade) Regulations 1999 and amending the TSE (England) Regulations 2006 to reflect EU legislation. However, the UK would not allow either vertebral column from cattle aged 24-30 months to be removed in authorised butcher's shops or head meat to be removed in authorised licensed cutting plants. Instead, vertebral column from all cattle aged over 24 months would need to be removed in cutting plants additionally licensed for this purpose and head meat could be removed only at abattoirs.

  Cattle born before 1 August 1996 will remain permanently excluded from the food chain and from export. No product from any animal slaughtered before 15 June 2005 would be exported, and no beef containing vertebral column, or any product derived from vertebral column, from any animal slaughtered before 2 May would be exported.

Option 3—Amend UK legislation to administer and enforce EU legislation, making use of EU derogations

  This would involve repealing the Bovines and Bovine Products (Trade) Regulations 1999 and amending the TSE (England) Regulations 2006 to reflect EU legislation as above but in addition including the permitted derogations to allow vertebral column from cattle aged 24-30 months to be removed in authorised butcher's shops and head meat to be removed in authorised licensed cutting plants.

Option 3A—Amend UK legislation to administer and enforce EU legislation, making use only of the EU derogation to allow vertebral column to be removed in authorised butcher's shops

  As at Option 3 above but head meat could be removed only in abattoirs.

5.  COSTS AND BENEFITS

Sectors and groups affected

  The EU Regulation will affect those who keep and sell cattle, hauliers, abattoirs, cutting plants, the meat processing industry, renderers, incinerators, independent butchers and other retailers, the catering industry, consumers, port authorities and those who would wish to export or transport for export beef, bovine products and live cattle. It will also be important to those concerned with the welfare of cattle and live exports. There will also be implications for enforcement agencies dealing with the meat industry and exports.

  There are implications for small businesses particularly in rural areas because, if the derogation allowing the removal of vertebral column in butcher's shops is not implemented for cattle aged 24-30 months, the EU Regulation would adversely affect farmers who keep slow maturing grass fed cattle and small abattoirs without cutting plants who currently supply craft butchers with half or quarter carcases. Craft butchers who currently purchase half or quarter carcases to mature and bone out in their shops would also be affected if they wished to continue to sell meat from cattle aged 24-30 months but it had to be de-boned in cutting plants. Consumers would also be unable to buy T-bone steaks derived from cattle aged over 24 months although T-bone steaks from cattle aged less than 24 months would continue to be available. Some 50% of cattle aged under 30 months currently slaughtered for human consumption are aged over 24 months.

  There are no significant human health implications either in increasing conrols on vertebral column or, assuming compliance with EU rules to avoid contamination, in reducing controls on head meat.

  The EU Regulation does not have any race equality impacts.

Analysis of Cost and Benefits

Option 1—Do Nothing

Costs

  Industry would be denied the opportunity to export beef, bovine products and live cattle without breaking UK law. Thereby, industry would potentially be denied access to improved returns either directly from overseas markets or as a function of strengthening of the whole UK market because surplus domestic supplies can be exported. This is particularly important now that the Over Thirty Months (OTM) rule has been replaced by BSE testing from 7 November 2005, which has released additional supplies of beef from older cattle onto the UK market.

  Those who currently export UK beef from eligible cattle aged 6-30 months under the Date-based Export Scheme (DBES) or beef of foreign origin under the eXport APproved (XAP) Scheme would continue to face the significant additional costs of exporting under these schemes. For DBES, these costs include approval and inspection costs (currently £3,200 in first year and £2,160 thereafter); eligibility checks at about £1.75 per animal; and the costs of additional Meat Hygiene Service (MHS) inspection, currently about £1,000 per DBES period. For the XAP Scheme, there are parallel approval and inspection costs (currently £560 per year) and the costs of additional inspection by the Meat Hygiene Service (MHS) or Local Veterinary Inspectors (LVIs). In addition, plants operating DBES or XAP incur high overheads due to the onerous conditions for these schemes, including separate slaughter runs and cleandowns for DBES and segregated preparation areas for XAP. Both schemes require a high level of official supervision.

  The Government would face legal costs if it were to try to maintain a ban on the export of beef or live cattle or to refuse to allow industry to reclaim head meat contrary to EU law. The Government would also be vulnerable to challenge in the European Court if it failed to enforce an EU requirement to remove vertebral column as SRM from cattle aged 24-30 months. Other Member States might also then refuse to accept imports of UK beef products. The industry would—as above—be denied the opportunity to sell head meat until the legal position had been clarified. We estimate that the value could be about 30p per carcase or £0.6 million assuming head meat is reclaimed from about 2.0 million of the 2.4 million cattle currently sold for human consumption per year. The costs of disposal as SRM would be saved but these costs are relatively small.

  In addition, the industry would be required to remove and destroy a longer list of SRM than other EU Member States (except vertebral column from cattle aged 24-30 months—see below).

Benefits

  The Government prefers a trade in meat to the long distance transport of live animals to slaughter, whether in the UK or across borders and would like to see a lower limit for journey times. However, the decision to lift the ban means that the UK must implement EU law and cannot place a unilateral ban on the export of cattle including calves, because to do so would contravene free trade rules and would be illegal under EU law. If the ban were not lifted, the Government would not incur the costs of checking the welfare of live cattle during transport or the costs of policing any demonstrations.

  The UK would not apply new restrictions to vertebral column from cattle aged 24-30 months. This would enable farmers and those in the meat trade to continue selling bone-in beef to butchers from animals aged 24-30 months.

Option 2—Amend UK legislation to administer and enforce EU legislation without making use of EU derogations

Costs

  The Government would incur the costs of checking the welfare of live cattle during transport and the costs of policing any demonstrations. There would also be social costs in that protestors, local residents, and those involved in the trade would also be affected by protests. The Government portal surveillance checks would continue in a modified form, to monitor exports of beef and bovine products for illegal items eg beef or products from animals slaughtered before 15 June 2005.

  Application of SRM controls to vertebral column from cattle aged over 24 months would be most unwelcome to farmers, abattoirs and butchers, but the industry has agreed that securing exports is the priority. However, industry has also pressed hard for the UK to make use of the EU derogation to allow removal of vertebral column in butcher's shops. With some 50% UK cattle aged under 30 months likely to be finished by 24 months, there should be enough cattle of sufficient (if not ideal) quality to allow trade to continue. The main difficulty with a 24 months limit is the impact it could have on:

    —  farmers producing slower maturing grass-fed cattle;

    —  about 110 small slaughterhouses without linked cutting plants;

    —  about 30 further abattoirs with cutting plants that cannot accommodate all the cattle they slaugher; and

    —  traditional butchers.

  Although significant in presentational terms, sales of T-bone steaks account for only 0.2% retail sales or about £4 million per year, and 0.5% catering sales or about £5 million per year. Rib roasts could still contain the rib. If the UK were to require vertebral column to be removed in licensed cutting plants, small abattoirs will be unable to provide sides, quarters or primary cuts containing vertebral column direct to butchers for boning out unless these are derived from cattle aged under 24 months. Carcases from cattle aged 24-30 months would need to be routed via the nearest cutting plant, which might be some considerable distance away. This would not be a practical option for many abattoirs. The impact would be greatest in the north and west where more meat is sold through traditional butchers.

  There are some 7,000 independent butchers in the UK. Not all trade in meat is in carcase form but it is estimated by the Meat and Livestock Commission that some 26% of all beef sold from abattoirs to trade customers is traded as bone-in hind or forequarters of beef. Butchers who currently buy beef in carcase form would be unable to buy such carcases from cattle aged 24-30months containing vertebral column, but meat from older grass fed cattle is often the most desirable. Whilst butchers in general are increasingly buying boneless meat, there are many well established small craft businesses that bring valuable custom to small towns. Without traditional butchers, such custom might go elsewhere.

  Most vertebral column from cattle aged 24-30 months is already removed in cutting plants. The costs for cutting plants of staining and disposal of vertebral column as SRM rather than lower category waste are expected to be slightly higher. These costs will vary according to throughput and might amount to an increase of perhaps £200,000 per year. There will also be additional enforcement costs.

  Consumers may find it difficult to understand why a ban on vertebral column from cattle aged 24-30 months is being reintroduced at a time when the BSE epidemic is in sharp decline and why consumer choice is being restricted. This could affect consumer confidence in beef if not carefully explained.

  Industry would not be able to reclaim head meat in any cutting plants.

Benefits

  The export trade could resume.

  The tables below show the tonnage and value of beef and live cattle exported during 1994 and 1995, the last two full years of trading before the export ban was imposed. Under the Date Based Export Scheme only small quantities of beef have been exported to several EU member states.

BEEF AND BOVINE PRODUCTS


1994
1995
Tonnage
Value
Tonnage
Value

212,442
£486,221,000
245,093
£583,560,000


LIVE CATTLE


1994
1995
Numbers
Value
Numbers
Value

481,000
£89,716,000
450,000
£77,624,000


  Trading conditions, particularly exchange rates, are very different today and it would take time to rebuild the beef and bovine products export trade, which may never reach pre-1996 levels. The MLC estimate that in 2006 UK exports could be about 40,000 tonnes divided equally between prime beef and cow beef. The value of this might be about £60 million but should increase rapidly in future years.

  There is strong overseas interest in high quality breeding stock and in calves, many of which are currently shot at birth. The UK would apply all the provisions of EU law relevant to normal trade between Member States, including rules to protect the welfare of cattle during transport. It is estimated that high value breeding stock worth some £5 million and 200,000 calves worth some £20 million might be exported during 2006. These figures would be expected to increase in future years.

  Industry would benefit being able to reclaim head meat albeit only in slaughterhouses. This trade could be worth some £0.6 million based on 30p per head x 2 million (out of 2.4 million) cattle slaughtered for human consumption per year.

  On the basis of a scientific risk assessment by the Spongiform Encephalopathy Advisory Committee (SEAC) the public health benefits of appying a lower age limit to the removal of vertebral column are assessed to be negligible.

Option 3—Amend UK legislation to administer and enforce EU legislation making use of EU derogations

Costs

  Additional enforcement costs associated with supervising exports of live cattle: as for Option 2 above.

  Social costs associated with exports of live cattle: as for Option 2 above.

  Portal surveillance costs to check compliance with EU restrictions on exports: as for Option 2 above.

  Butcher's shops would have to arrange and pay for disposal as SRM of vertebral column from cattle aged 24-30 months if they chose to apply for authorisation. Disposal costs would vary according to local circumstance from nothing where waste is already incinerated at a plant approved to incinerate SRM to about £100 per week.

  Additional enforcement costs incurred by local authorities would be minimal because no separate special visits to butcher's shops are required and checks could be carried out as part of routine LA inspections of butcher's shops. There would be no increase in risk because current UK legislation allows butchers to handle and sell without restriction vertebral column from cattle aged under 30 months.

  As most vertebral column will continue to be removed in licensed cutting plants, additional enforcement costs will be incurred in cutting plants too. It is expected that these will be similar to those in Option 2 as the number of plants processing vertebral column from cattle aged 24-30 months is likely to be similar.

  Additional MHS staff would be required to audit the removal of head meat in cutting plants.

  Consumer confidence—as for Option 2 above.

Benefits

  For exports—as for Option 2 above.

  For SRMs—butcher's shops could apply for authorisation to remove vertebral column and thus could continue to handle beef from cattle aged 24-30 months in carcase form. Cutting plants could apply for authorisation to remove head meat and would welcome the flexibility and potential cost efficiency of being able to do so, especially when a cutting plant is co-located with an abattoir.

  UK would apply a shorter list of SRMs (except that vertebral column from cattle aged 24-30 months would become SRM).

Option 3A—Amend UK legislation to administer and enforce EU legislation, making use only of the EU derogation to allow vertebral column to be removed in authorised butcher's shops

Costs

  As for Option 3 above but with no additional MHS costs associated with checking that the requirements for the removal of head meat in authorised cutting plants have been met. Cutting plants would continue to be unable to remove head meat.

Benefits

  As for Option 3 above but avoiding any risk of contamination of head meat with brain tissue during transport to cutting plants and enabling head meat to be removed at abattoirs where the Meat Hygiene Service is always present.

Summary of costs and benefits


Option
Costs
Benefits

Option 1—Do Nothing1.  Industry denied the opportunity to export UK beef, bovine products and live cattle—£85 million in 2006, but expected to increase.
2.  Costs of exporting under DBES and XAP schemes would continue—£10,000 per plant per year (but depends on throughput).
3.  Legal costs to Government if it tries to maintain the ban contrary to EU law.
4.  Industry denied the opportunity to sell head meat—£0.6 million.
5.  Industry required to remove a longer list of SRM than other EU Member States.
1.  Savings on the cost of policing demonstrations against live exports.
2.  Farmers and those in the meat trade can continue to sell bone-in beef to butchers from animals aged 24-30 months.
3.  Government continues to pay for portal surveillance for non-DBES and XAP approved exports.

Option 2—Amend UK legislation to administer and enforce EU legislation without making use of EU derogations
1.  Government incurs the costs of checking the welfare of live cattle during transport and of policing any demonstrations.
2.  Social costs for those involved in protests—demonstrators, local residents, those involved in the trade.
3.  Government incurs the costs of portal surveillance checks for bovine material from cattle slaughtered before 15 June 2005 and vertebral column from cattle slaughtered before 3 May 2006.
1.  The export trade in beef, beef products and live cattle would resume—£85 million in 2006 but expected to increase rapidly. DBES and XAP costs cease.
2.  Industry would be able to remove a shorter list of SRMs and reclaim head meat, albeit only in slaughterhouses—£0.6 million.
4.  24 months limit for vertebral column without derogation could have an adverse impact on farmers, slaughterhouses and butchers.
5.  Potential drop in consumer confidence due to ban on vertebral column from cattle aged 24-30 months.
6.  Additional enforcement and SRM disposal costs for removal of 24-30 month vertebral column in cutting plants.
7.  Industry would be unable to reclaim head meat in cutting plants.

Option 3—Amend UK legislation to administer and enforce EU legislation making use of EU derogations
1.  As for Option 2 above.
2.  Butcher's shops would have to pay for disposal as SRM of vertebral column from cattle aged 24-30 months: costs could range from nothing to £100 per week depending on local circumstances.
3.  Additional MHS staff would be required to oversee removal of head meat in cutting plants.
1.  For exports—as for Option 2 above.
2.  For SRMs—as for Option 2 but butcher's shops could apply for authorisation to remove vertebral column and thus could continue to handle carcases from cattle aged 24-30 months. Cutting plants could apply for authorisation to remove head meat.

Option 3A—As Option 3, but not allowing head meat to be removed in authorised cutting plants
As for Option 3 but cutting plants would continue to be unable to remove head meat. As for Option 3 but avoiding (a) any risk of contamination of head meat with brain tissue during transport to cutting plants and (b) additional MHS costs arising from the need for a greater MHS presence in cutting plants in cutting.
NB: All figures are best estimates, subject to wide margins of error.


Costs and benefits checklist

Option 1—Do Nothing

Economic impacts

  The proposal will:

    —  not result in receipts or savings to the Government;

    —  affect the availability of goods or services in that it will not be possible to export beef, beef products or live bovines from the UK;

    —  not result in new technologies;

    —  not result in a change in the investment behaviour both into the UK and UK firms overseas and into particular industries;

    —  not impact on levels of competition within the affected sector;

    —  impact on the public sector, including the resources of front-line delivery staff, in that the Government will have to continue enforcing the Regulations;

    —  not impact on business, charities and voluntary organisations;

    —  impact on foreign consumers because the export of beef, beef products and live bovines from the UK will not resume.

Social impacts

  No change from current situation and no impact.

Environmental impacts

  No change from current situation and no impact.

Options 2, 3 and 3A

Economic impacts

    —  Government will incur savings in enforcing the current export ban with the abolition of the DBES and XAP Schemes but will incur additional costs in relation to the live export trade and in enforcing the removal of vertebral column in cattle aged 24-30 months.

    —  The proposal will affect the availability of goods or services in that it will enable the export of beef, beef products and live bovines from the UK. The extent of these benefits will depend on the nature and extent of the export trade.

    —  The proposal may result in new technologies related to the removal of vertebral column.

    —  The proposal will not result in a change in the investment behaviour both into the UK and UK firms overseas and into particular industries.

    —  The proposal may impact on levels of competition within the affected sector in that some farmers, food companies and exporters may be able to take advantage of the lifting of the export bans before others are ready to do so.

    —  The proposal will impact on the public sector in relation to enforcement costs.

    —  The proposal will not impact on charities and voluntary organisations.

    —  The proposal will impact on foreign consumers because the export of beef, beef products and live bovines from the UK will resume.

Social impacts

  There are implications for small businesses particularly in rural areas if the derogation in relation to the removal of vertebral column in butcher's shops is not implemented. The EU Regulation will affect farmers who keep slow maturing grass fed cattle and small abattoirs without cutting plants who currently supply craft butchers with half or quarter carcases. Craft butchers who currently purchase half or quarter carcases to mature and bone out in their shops would also be affected if they wished to continue to sell meat from cattle aged 24-30 months but it had to be de-boned in cutting plants. Consumers will also be unable to buy T-bone steaks derived from cattle aged over 24 months although they can buy T-bone steaks from cattle aged under 24 months.

  Some 50% of cattle aged over 30 months currently slaughtered for human consumption are aged under 24 months.

  There are no significant human health implications either in increasing controls on vertebral column or in reducing controls on head meat.

  The EU proposal will also have a potentially significant social impact because it will allow the resumption of the export of live bovines. This is opposed by animal welfare groups and others who are opposed to the principle of exporting live animals and who are concerned about the potential for cattle to be subject to longer journey times than would otherwise arise. Some respondents to the consultation exercise have expressed concern that the Partial Regulatory Impact Assessment did not take sufficient account of the welfare of animals undergoing export.

  If live exports resume, they are likely to be met by protests which could have a considerable impact on the lives of those committed to this movement. Before live exports were banned in 1996, a protestor was killed in an incident at Coventry airport. Such demonstrations, and their policing, would also have an impact on local residents and those travelling in the areas targeted for protest.

  The EU proposal will not have any race equality impacts.

Environmental impacts

  The 24 month limit for vertebral column removal may encourage some farmers to slaughter more cattle before they reach the age of 24 months which may encourage more intensive rearing and make slower maturing traditional breeds less attractive. This could have an adverse impact upon the British countryside. Respondents to the consultation exercise have expressed their concern that many native British breeds do not mature sufficiently quickly to be slaughtered at 24 months and that the proposed 24 month limit is likely to place additional restrictions on extensive cattle grazing systems at a time when they are already very vulnerable. Farmers may move away from slow-maturing grass fed cattle. Many Sites of Special Scientific Interest and Environmentally Sensitive Areas depend upon cattle grazing to ensure that they are maintained in a favourable environmental condition. Some cattle breeds could be lost to farming use, representing a loss to the UK's genetic resources.

  However, the lifting of the Over Thirty Months (OTM) rule on 7 November 2005 may encourage other farmers to rear less intensively. The most likely outcome is that fewer cattle will be slaughtered in the 24-30 month age band.

6.  SMALL FIRMS IMPACT

  There would be implications for small businesses. We have consulted the Small Business Service (SBS) and have had face to face discussions with representatives of the National Federation of Meat and Food Traders, the Association of Independent Meat Suppliers, the National Beef Association, the Food and Drink Federation, the British Meat Processors Association, the International Meat Trade Association, the Pet Food Manufacturers' Association and the farming unions who all attend regular stakeholder meetings with Defra and the FSA. Trade organisations believe that smaller scale farms in more remote areas, smaller scale abattoirs and independent butchers would all be disproportionately affected by a requirement to remove the vertebral column as SRM in cattle aged 24-30 months, especially if the UK were to require this to be done only at cutting plants. All the organisations above have pressed for the UK to make use of the EU derogation that allows vertebral column to be removed in authorised butcher's shops. They have underlined the importance to small abattoirs of being able to handle all the cattle a farmer wishes to slaughter and the importance to craft butchers of selling a high quality product, differentiated from the majority of beef sold in supermarkets. Respondents to the consultation exercise were overwhelmingly in favour of implementing this derogation (Option 3 and 3A above).

  However, opinion was divided on the derogation for head meat to be removed at specially authorised licensed cutting plants. The Food Standards Agency has decided not to implement this derogation for the present: it will be reviewed in summer 2006.

7.  COMPETITION ASSESSMENT

  The proposals are essentially deregulatory. They would affect a large number of small and mid-sized firms and a number of large firms, none of which dominate the marketplace. None of the measures prevent entry into the market by new firms and none would lead to higher ongoing costs compared to existing firms for new or potential entrants to the market. Smaller abattoirs without co-located cutting plants or with small cutting plants will be affected more than large abattoirs with co-located cutting plants. Independent craft butchers who bone out carcase beef will be affected but butchers who deal in or purchase only boneless beef will be unaffected.

8.  ENFORCEMENT AND SANCTIONS

  The proposals are deregulatory except in relation to new controls on vertebral column from cattle aged 24-30 months. A new authorisation and enforcement regime has been developed for Option 3 and 3A for the removal of vertebral column for cattle in the 24-30 months age group using local authorities for enforcement in authorised butcher's shops. Most vertebral column would continue as now to be removed in licensed cutting plants. This would require a small amount of additional input from the MHS who enforce SRM controls in cutting plants.

  Sanctions would be applied for non-compliance. It is proposed that a person guilty of an offence under these Regulations is liable:

    (a)  on summary conviction, to a fine not exceeding the statutory minimum or to imprisonment for a term of three months or both; or

    (b)  on conviction on indictment, to a fine or to imprisonment for a term not exceeding two years or both.

9.  IMPLEMENTATION AND DELIVERY PLAN

  It is proposed that the requirements of the EU Regulation shall be implemented by means of amendment to the TSE Regulations 2006, as the TSE (No 2) Regulations 2006.

  The UK, as responsible authority, will require producers and exporters to ensure that beef and bovine products exported comply with the exclusions laid down in the EU Regulation. Consignments will be monitored and selected for backtracing by the State Veterinary Service (SVS). If any infringements are detected, the importing country and the Commission will be notified immediately so that the illegal goods can be detained and either returned or destroyed.

  The SVS will be responsible for checking the welfare of live cattle destined for export and for ensuring compliance with animal welfare legislation.

  The MHS will enforce SRM controls in abattoirs and cutting plants. Local authorities will enforce SRM controls in butcher's shops.

10.  POST-IMPLEMENTATION REVIEW

  Legislation, procedures for enforcement and compliance for exports of beef, bovine products and live bovines and for SRM controls will be kept under close review. In addition, the FSA will consider in the summer whether to make use of the derogation that allows the removal of head meat in cutting plants. The EU Food and Veterinary Office is expected to inspect UK controls in December 2006.

11.  SUMMARY AND RECOMMENDATION

Option 1: Do Nothing

  This option should not be supported because it would fail to reflect the changes in EU legislation and would leave the UK legislation open to judicial challenge. UK industry would be denied the opportunity to export beef, bovine products and live cattle until the legal situation was clarified.

Option 2: Amend UK legislation to administer and enforce EU legislation without making use of EU derogations

  This option should not be supported because it would fail to make use of the EU derogation to allow removal of vertebral column in butcher's shops. This would have an adverse impact upon farmers producing slower maturing grass-fed cattle, on about 110 small slaughterhouses without linked cutting plants, on about 30 further abattoirs with cutting plants that cannot accommodate all the cattle they slaughter, and on traditional butchers.

Option 3: Amend UK legislation to administer and enforce EU legislation, making use of EU derogations

  This option should not be supported because the FSA Board have decided that for the time being head meat should be removed only in abattoirs. This position will be reviewed in summer 2006 and was taken in the light of responses to the consultation and to avoid possible contamination of head meat during transport of heads and removal of meat in cutting plants.

Option 3A: Amend UK legislation to administer and enforce EU legislation making use only of the EU derogation to allow vertebral column to be removed in authorised butcher's shops

  This option should be supported because it allows UK exports to resume on, as far as possible, the same basis as for other EU Member States. It also allows butcher's shops to continue to remove vertebral column from cattle aged 24-30 months and is in line with FSA's decision not to allow cutting plants to remove head meat for the time being. This is the option favoured by the majority of consultees.

RECOMMENDATION

  It is recommended that the Secretary of State approve Option 3A. This option will implement the changes in EU legislation in domestic law and enables the resumption of exports of beef, bovine products and live bovines with the minimum of inconvenience to the domestic beef industry.

Letter from the Chairman to Ben Bradshaw MP

  Thank you for your letter dated 22 May with Regulatory Impact Assessment (RIA) attached which Sub Committee D (Environment and Agriculture) considered at its meeting yesterday.

  The Committee is pleased to be kept up to date with progress on the TSE Roadmap. We welcome the lifting of the UK export ban which took place in May. We were also pleased to be given the opportunity to scrutinise the RIA which considered the impact of resumption of exports of bovine products and moves to harmonise controls on bovine vertebral column, head meat and other Specific Risk Material with the EU requirements that apply in other EU Member States. We fully support Option 3A identified in your RIA which amended UK legislation to administer and enforce EU legislation making use only of the EU derogation to allow vertebral column to be removed in authorised butcher's shops.

15 June 2006



95   Correspondence with Ministers, 45th Report of Session 2005-06, HL Paper 243, p 373. Back


 
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