Bovine TB: Compensation

Wednesday 29th January 2020 Westminster Hall

[Siobhain McDonagh (in the Chair)]

This debate will last half an hour from the time you start, Mr Thomas.

[Derek Thomas (St Ives) (Con)]

I beg to move,

That this House has considered compensation for bovine TB.

I know that the Government recognise the contribution that small abattoirs make to the food and farming sector; the previous Secretary of State for Environment, Food and Rural Affairs went as far as to suggest that direct Government intervention should be considered to help them survive. I am in full support of that. The closure of a small, local abattoir has a major impact on the farmers and smallholdings that use it, not to mention on the local food market, as the meat from such an abattoir travels a much smaller distance to market. There is also the loss of the skilled workmen and women who work in the abattoir.

I rise today to raise a particular anomaly in the compensation scheme for bovine tuberculosis. Correcting it will not itself save small abattoirs, but it will help. The case relates to Vivian Olds, a traditional family butchers of 120 years in St Just in my constituency, which is basically as far west as one can get in England. It has a small abattoir at the rear of the premises. Ms McDonagh, if you chose to shop at Vivian Olds—you would be very welcome; I would love to take you down there—you could be sure that the meat you purchased was locally produced, that the welfare standards were as good, if not better, than any other abattoir, and that you were getting some of the best meat that money can buy.

The case I want to raise is as follows. During the ordinary process of slaughtering a steer—a bullock—the Government vet, who is legally required to be present at the time of slaughter, identified lesions in more than one location on the carcase. Lesions are a strong indicator of bovine TB, and if they are visible at more than one site, the carcase cannot be used for human consumption—rightly so—and must be destroyed. Roughly 6% of carcases of animals removed for TB control purposes are condemned.

As you and I would expect, Ms McDonagh, the farmer did not get paid for the steer. The bovine TB scheme does not pay for an animal suspected of carrying bovine TB after it has been slaughtered, and it is not reasonable to expect the slaughterhouse to pay for the loss of the asset. On this occasion, the farmer did not agree, and neither did the judge at the small claims court, who found against the abattoir and required Mr Olds to pay in the region of £1,500, including the value of the meat and the cost of disposing of the carcase. The judge cited the fact that Mr Olds had received the goods and must pay.

The truth is that the butcher was really nothing more than a bystander in this case, which is why I believe the compensation scheme for bovine TB must change. The moment that the lesions giving rise to the likelihood of bovine TB were identified, the vet took the only decision available to him. Where there are indications of generalised TB or TB lesions with emaciation, the entire carcase and all the blood and offal is rejected as unfit for human consumption. The law rightly requires the carcase to be removed from the food chain. Mr Olds, the butcher, had no say in the matter. The owner of a small abattoir is not in the business of paying for meat he cannot use; nor can he or she afford to.

I ought to clarify that this case did not arise over the weekend in my regular MP’s surgery; it was raised with me more than a year ago. To get some form of justice, several letters have been written. The Food Standards Agency has been involved, as have Ministers from the Ministry of Justice and DEFRA. So far, a change in the compensation scheme eludes us, so I bring this matter to the Minister and the House today. I am simply asking him to change the rules relating to bovine TB to include animals removed from the food chain if evidence exists to suggest that bovine TB is present.

The Cattle Compensation (England) Order 2019 sets out the compensation rules for animals slaughtered for a number of diseases, including tuberculosis. It only provides for compensation to be paid where the Secretary of State causes an animal to be slaughtered. In practice, that relates to live animals that react to a TB test and are slaughtered in order to stop the spread of bovine TB. However, the fact remains that for Mr Olds—my local butcher—the Secretary of State caused the animal to be slaughtered. It was the legislation that required the animal to be lost from the food chain—as I say, rightly so. I ask the Minister to insert some equality into the bovine TB compensation scheme.

[Fay Jones (Brecon and Radnorshire) (Con)]

I represent many thousands of beef farmers in Wales who are very frustrated by the Welsh Government, who have not shown anywhere near the kind of ambition or bravery that the UK Government have shown. I was heavily involved in the original pilot badger cull back in 2013, so I know the scourge of bovine TB incredibly well. Does my hon. Friend agree that pedigree animals, which are often part of a long-thought-out genetic plan—a bloodline strategy—organised over many generations using our farmers’ expertise, often merit a higher form of compensation?

[Derek Thomas]

I agree, and I welcome that intervention. I believe that the Government pay the value of the meat as if it was to go into the food chain. My hon. Friend is right, and I know farmers in my constituency and elsewhere in Cornwall who have lost prize herds through bovine TB. It is a really tricky issue.

[Fiona Bruce (Congleton) (Con)]

My hon. Friend the Member for Brecon and Radnorshire (Fay Jones) is right. In my constituency, the assessment for compensation can be wholly inadequate. For example, the economic losses to dairy farms, in the case of lost milk yield, can be further impacted by financial penalties imposed by dairies through breaches of contract when farmers are not able to meet forecasted milk yields because herds have had to be put down.

[Derek Thomas]

I welcome that intervention. Both interventions are important. The previous Secretary of State requested a review of the compensation scheme and the eradication strategy. As far as I understand the situation, it has reported back, and we are waiting to hear from the current Secretary of State about what the implications might be.

The National Farmers Union and other representative groups have argued for clarity, for the process to be accelerated, for better communication and for fairness. I am just arguing for fairness. As my hon. Friend the Member for Brecon and Radnorshire (Fay Jones) said, there is a commitment to deliver wildlife and a farming community free of bovine TB. That is absolutely the prize to reach. Today, we are discussing the compensation scheme, which is relevant to all my farmers, including those with dairy herds.

This is where it gets a bit tricky. I recognise that the change to a bovine TB compensation scheme requires legislative change. I understand why the Government might have other things on their plate than revisiting that piece of legislation. I also know that in 2018 the Secretary of State ordered a review of the strategy for eradicating bovine TB in England. I understand that the compensation scheme is included in the review report, and I would like the Minister to indicate when the Secretary of State expects to issue her response to the review.

On the wider issue of the compensation scheme for bovine TB, which my hon. Friends raised in their welcome interventions, it would be remiss of me not to take the opportunity to ask the Minister whether, as part of his deliberations, he will consider what they said and look at improving the communication between Government bodies and the farming business. There is definitely a breakdown between DEFRA and the farming community, whether it is about surveillance testing, a TB breakdown or the details regarding when compensation will or will not be paid. Providing timely guidance gives clarity to farming businesses and instils confidence at a local level, within a complete bovine TB eradication strategy, helping to build a stronger partnership approach between the farmer and the Government or Government agency.

I know the Minister well: he knows how important it is that we continue to work closely with the farming community and landowners to ensure we can continue to drive down the incidence of bovine TB. One way would be to issue more details about the methodology involved in calculating the compensation values. We have heard about the loss of a prize herd. The compensation values would be beneficial in how they were calculated and would allow transparency in the current processes.

I mention again in closing my friendly butcher in Saint Just. It is my profound belief that compensation should also be paid to farmers when a TB reactor is identified by a vet at the abattoir. The whole process of a steer going to an abattoir to be slaughtered and then the entire carcase being lost because of Government legislation, which we support and agree with, must challenge the Government and the Minister to consider what compensation there should be, so that the difficulty that my local abattoir faced is avoided.

I hope that DEFRA does not oppose a change to the legislation. Unless a change in the compensation scheme is secured, it remains possible that Mr Olds and abattoirs large and small—especially, as we have heard, in badly affected bovine TB areas—could be affected by similar cases in the future. I know the Minister has been listening and is keen to get this right; it is a difficult and challenging issue that requires a change in legislation.

I really hope that, after more than a year of battling to resolve this particular abattoir’s issue, which is not isolated—6% of carcases are removed after slaughter because of an indication of bovine TB—there is an opportunity now to look at the matter again and simply change the compensation scheme so that farmers are compensated, at the request of the Secretary of State, when they lose animals. That is perfectly fair and reasonable, and I am delighted that the Minister is here to give us his response.

16:31

[The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)]

It is a real pleasure to respond to my hon. Friend the Member for St Ives (Derek Thomas), who represents a neighbouring constituency. I am very familiar with many of the farmers in his constituency, and I am aware of the abattoir he mentioned.

Bovine TB is the most pressing animal health problem in the UK. Although the recent statistics show an encouraging decline in TB incidence and prevalence rates in cattle herds in high-risk areas, there is no room for complacency. The west of England still has the highest levels of bovine TB in Europe. Over the last 12 months, over 32,000 cattle have been slaughtered for TB control reasons in England—that is an appalling waste. The disease is damaging our rural businesses and causing much distress to farmers and rural communities, and it impacts businesses operating in all parts of the food production chain, including, as my hon. Friend has highlighted, abattoirs.

The individual case of the abattoir that my hon. Friend mentioned is unusual in that the animal had not been condemned by DEFRA vets as a result of a test; it had been sent for slaughter and to be sold, but was deemed by the official veterinarian working for the Food Standards Agency to be unfit for human consumption and was condemned. The farmer then took the abattoir to the county court, which found in his favour. It is important to note that the judgments made by county courts in such situations do not set any legal precedent in the way that those made by the High Court do.

I will clarify the approach that we take to this issue. Under the provisions included in the Animal Health Act 1981, the Government pay compensation only when the compulsory slaughter of disease-affected animals is required. All cattle herds are regularly tested for TB, and most infected cattle are disclosed through that on-farm testing programme

[Alicia Kearns (Rutland and Melton) (Con)]

As the Minister just mentioned, this is not just about compensation but about testing. Any cow—or any bovid, such as the bison in Nether Broughton in my constituency—that is diagnosed with bovine TB comes at a huge economic cost to the farmer, so we must get the test right. Does he agree that it is a good thing that farmers in my constituency are partnering with the University of Nottingham to develop a more accurate phage test, and that DEFRA should look into that further, because it directly affects the compensation scheme and, in particular, the viability of the farmers in my constituency?

[George Eustice]

My hon. Friend makes a very important point; none of the tests that we have are perfect. TB is a difficult, insidious and slow-moving disease that is sometimes difficult to detect. We are doing a big piece of work to try to improve diagnostics, including by looking at options such as the phage test, and in recent years our use of the interferon gamma test—the more sensitive blood test—has been more widespread.

A relatively small additional number of animals fall into the category highlighted by my hon. Friend the Member for St Ives. Around 550 animals per year are picked up through routine post-mortem inspections during commercial slaughter, either because they became infected between tests or because they were missed by less than perfect tests.

Since 2006 compensation for TB-affected animals is determined through table valuations, whereby the compensation paid for the animal mirrors the average price paid on the open market for similar types of cattle. There are around 51 different table value categories, which are based predominantly on the subdivision of non-pedigree beef cattle from pedigree beef cattle, and non-pedigree dairy from pedigree dairy. There is a whole range of subcategories based on the age of the animal.

My hon. Friend the Member for Congleton (Fiona Bruce) made the important point that farmers will sometimes say that the table valuation does not represent the value of the animal. That can be difficult, and we are constantly looking to refine the tables, because the value of a small pedigree Dexter cow might be very different from that of a pedigree Hereford or a pedigree South Devon, which are larger animals. We recognise those issues and are constantly trying to refine the tables. It is also important to recognise that we went to a table valuation system, because prior to 2006 there were individual valuations for each animals. Unfortunately, however, we found that land agents would often tend to value up animals, and the taxpayer was not getting good value for money as a result of individual valuations. That is why we introduced a table valuation system. It is different in Wales, which remains on an individual valuation system.

[Jim Shannon (Strangford) (DUP)]

We have had a large number of bovine TB outbreaks in Northern Ireland, especially in my constituency of Strangford. We want to make sure that the compensation scheme to which the Minister refers is uniform across the whole United Kingdom of Great Britain and Northern Ireland. I want to be sure that, for any potential legislative changes to the compensation scheme that result from this debate, discussions will take place with the Northern Ireland Assembly and, in particular, with the Department of Agriculture, Environment and Rural Affairs, to ensure a uniform response across the whole United Kingdom of Great Britain and Northern Ireland.

[George Eustice]

Disease control and dealing with epidemiological outbreaks, including TB, are devolved matters, so each part of the UK has a different approach. In Scotland there is not currently a TB problem as it does not affect the badger population. Wales has a severe problem but is not using culling at this stage. In England we are starting to make significant progress through culling. Northern Ireland is trialling different approaches, such as “test, vaccinate or remove”, although that is rather expensive. It is a fully devolved matter that is decided by the relevant Administration—we are delighted that there is a new Administration in Northern Ireland.

To support and inform the table valuations, we collect data for around 1,250,000 animals every year from the sales of store cattle, calf sales, breeding and dispersal sales. That ensures that the table values are based on real sales data and are as accurate as possible. I take on board the point made by my hon. Friend the Member for Congleton and others about the table valuations, but I hope that she understands why we switched to that system over individual valuations.

To return to the specifics of this case, decisions on whether meat is fit for human consumption are made by the official veterinarians who work for the Food Standards Agency in the slaughterhouse. Their decisions are based on findings from the post-mortem inspections that they carry out, as enshrined in the food hygiene regulations. Those involve a set of criteria and an approach very different from what a DEFRA or Animal and Plant Health Agency vet would use on-farm.

When post-mortem inspection reveals lesions indicative of TB in more than one organ, or in more than one anatomical region, the whole carcase is declared unfit for human consumption. As my hon. Friend pointed out, that occurs in a relatively small number of cases, but I appreciate the significance to the farmer affected. About 6% of such cases are picked up in that way. However, when a TB lesion has been found in only one organ or just one part of the carcase, only the affected organ or part of the carcase is rejected. In the vast majority of cases, therefore, when an animal goes to the slaughterhouse and is not condemned entirely, there is generally a significant salvage value.

DEFRA only pays statutory compensation when it has deprived someone of their property to help eradicate a disease. The reason involves DEFRA requiring that an animal be killed as a disease-fighting requirement. DEFRA uses legal powers under the Animal Health Act 2002 to dictate that an animal must be seized, and it has enforcement powers to seize and remove an animal if, as sometimes happens, a farmer resists. In such instances, it is deemed appropriate that the farmer should be compensated.

When a farmer has an animal that has been picked up not by a test—therefore not compulsorily slaughtered by DEFRA—but only on arrival at the slaughterhouse, that situation is much more in the realm of commercial risk. An animal can be condemned for many different reasons for which a farmer would not be compensated, and it is regarded as an issue of commercial risk.

The situation can be addressed in two ways. First, in the specific case of the abattoir concerned, perhaps abattoirs need to be clear in their contracts with farmers and stipulate who is liable in the event that a carcase is condemned. If an abattoir wanted to make it clear that it would not pay for a condemned carcase, stating that in a contract could mean that the county court might find in a different way.

Secondly, we have done some work with NFU Mutual. The National Farmers Union and NFU Mutual are working on an insurance policy product to deal with such situations—either an abattoir can take out insurance to cover the cost of an animal where that happens, or the farmer could arrange to take out some insurance to cover such issues.

To go back to the intervention of my hon. Friend the Member for Congleton (Fiona Bruce), many farmers who have highly prized show-winning cattle—not just pedigree beef or dairy cattle, but ones that have a huge value—privately insure them, to top up the difference between the table value and the actual value. The commercial insurance market will help farmers to cover those costs and to protect them against loss of their prize-winning bloodstock.

I accept the point made by my hon. Friend the Member for St Ives about the need to share more effectively the details of how the TB compensation system works. We are looking to address that by publishing a briefing note on TB compensation, which will go on to the TB information hub operated by the Agriculture and Horticulture Development Board. More generally, there is always room to improve communications, so we will continue to work with the farming unions and others to meet the needs of those who deal with such difficult situations. We invested £25,000 in that TB hub website to improve information available to farmers and give them other practical advice on aspects of their TB programme.

I hope that I have been able to address some of the issues raised by my hon. Friend. He will be disappointed that I have not announced at the Dispatch Box that cases such as his will in future be compensated, but I hope he understands that to do so would be a leap from what we have always done as a nation, in particular since the Animal Health Act 1981, in which the clear concept was of a duty on Government to compensate when we required animals to be destroyed for disease-fighting reasons. Unfortunate cases in which we have not required compulsory slaughter are very much in the realm of commercial risk. It is for abattoirs and farmers through their contracts, or for both through insurance products, to cover their risk.

Finally, I make an offer to my hon. Friend the Member for St Ives, given that he is a close neighbour all the way down in west Cornwall. I am more than willing to meet the particular abattoir owner concerned and to discuss the matter with him. My hon. Friend mentioned the Godfrey review, and we will be responding to that imminently. It will include some proposals to do with TB compensation but, alas, not the one that he is seeking for me to confirm today. However, we have had a good debate and covered many different areas. Again, I thank my hon. Friend for bringing the issue to my attention.

Question put and agreed to.