Cattle Compensation (England) (Amendment) Order 2018

Luke Pollard Excerpts

Wednesday 24th October 2018 General Committees

[Dr David Drew (Stroud) (Lab/Co-op)]

I beg to move,

That the Committee has considered the Cattle Compensation (England) (Amendment) Order 2018 (S.I. 2018, No. 754).

I am delighted to serve under your chairmanship, Mr Pritchard. I think that the Committee will have an interesting discussion. This is round three of a four-round contest this week—we have the Agriculture Bill again tomorrow—but this is an important issue. Obviously, the Opposition have some issues with the order.

The background to the order is fairly well known. We no doubt disagree about the causes and consequences of bovine tuberculosis, but we are not here to discuss that. We are here to discuss the compensation scheme, which is very important to my local farmers and to those of a number of other hon. Members here.

The operation of the slaughter policy derives from European Council directive 1964/432/EEC, which demands that we slaughter TB-affected animals. The reason why we have prayed against the order is, as much as anything, to get clarity from the Minister about why we are reducing compensation at this difficult time and what the impact is. As I said, we may disagree about the causes and consequences of bovine TB. We will not disagree that this is a dreadful disease that has a huge impact on our farmers, so any reduction in compensation needs to be looked at very carefully.

In 2015-16, 29,000 cattle were compulsorily slaughtered under the scheme. That cost the state about £30 million, so it is a considerable financial imposition on the state, in addition to the terribly bad effect on farmers. This proposal provides for a 50% reduction in compensation where an owner brings an animal into a TB-affected herd and that animal then tests TB-positive while the TB incident is ongoing. Cattle keepers accredited under a scheme based on the standards laid down by Cattle Health Certification Standards will continue to receive 100% compensation for all compulsorily slaughtered cattle, provided that the herd is accredited at the time of the breakdown. My first question to the Minister is therefore a general one: exactly how will that work? Obviously, some will be accredited, but others may have been brought in. We know that cattle passports and so on are not always as accurate as one would want. If a TB-affected cattle carcase has to be condemned because of being so unclean that there is a real risk of bacterial contamination, it, too, qualifies only for a compensatory payment of 50%.

Under the order, owners of TB-affected cattle who choose a slaughterhouse to kill the cattle could face at least a 50% reduction. For some, that is better, because they may have not got any compensation before. Again, I ask the Minister to be clear: who will receive the compensation and at what level? This measure is of course part of the Department for Environment, Food and Rural Affairs TB eradication strategy.

Let me move on to the comments from others; I also have some questions. The proposal was not well received in the consultation: 76%—a fairly high number—disagreed with the compensation reduction, and although 47% supported reduced compensation for cattle that cannot be processed by a slaughterhouse because they are unclean, I suspect those people were clear that they stood to gain if they did things properly. The proposals have a negative impact on the cattle industry of about £0.7 million—many of these figures are in the accompanying explanatory memorandum. What impact is that likely to have on those people who are already struggling because of bovine TB?

I have a series of questions that I will go through slowly. Some of them are from the National Farmers Union, which has been quite trenchant in its criticism of aspects of the proposals. To look first at what I am concerned about: has DEFRA proved that the reduction is necessary? It is a large sum of money but, in the great scheme of what we pay out in compensation, it is a relatively small sum.

Has DEFRA considered and discussed the legal implications of the reduced compensation with the Animal and Plant Health Agency? There is some dispute over whether it is right and proper and whether it would lead to a legal challenge. If a bought-in animal becomes a reactor after entering a new herd—the timescale is as yet unknown, though the Minister might be able to say—what criteria will be used to state with absolute certainty that the animal contracted the disease from other cattle within the destination herd? At what point will DEFRA decide that an animal is no longer a migrant to the herd? That is quite a complicated issue—these are complicated matters—and that is where the Government might be subject to legal challenge.

How do the reduced levels of compensation provided for by the order compare with those available to cattle keepers in other EU states, particularly Ireland, which has its own problems with bovine TB? What is DEFRA’s assessment of the impact of this reduction on dairy farms that are forced to buy in herd replacement to meet contractual obligations? That is one of the biggest issues; it is not just a question of the loss of the existing cattle. They have to be bought in, and only from TB-affected areas. What impact would this loss of money have on that process?

What is DEFRA’s assessment of the risk to the quality and welfare of cattle that would result from the reduction in compensation, if it leads farmers to seek to buy replacement stock from the open market, or via live exports? Again, I know about the restrictions on from where to restock, but people who are suffering might look to other means to restock. That would not be any good, with the way TB is spread within the cattle stock as well as maybe from other vectors.

What is DEFRA’s assessment of the impact of this reduction in particular on tenant farmers who have no option but to restock before a breakdown has been resolved, or the impact on the stock value and the ability to assess capital for investment? As the Minister will know, that is the problem for tenant farmers who do not have spare capital: they have to borrow if they face a reduction in compensation. It already takes a considerable time to receive that money. In this case, they would not receive it, and there could be further delays.

Will cattle keepers have the option to pay the slaughterhouse to clip retrospectively where an animal is found not to meet the clean livestock requirements to protect the compensation value to the farmer and receipt value to DEFRA?

I have a couple more questions and observations from the National Farmers Union, and then I will finish. How will the decision to reduce compensation be taken in circumstances in which it cannot be determined whether cattle were unclean when they left a farm? That is the reality of abattoirs; one is always reliant on vets getting it right. The Minister will know about the number of clear cattle that go through, as well the number of cattle of uncertain status that are subsequently found to have TB.

What assessment has DEFRA made of the likelihood and cost of legal challenges? On what basis will DEFRA be able to deal with that without penalising a farmer for a third party’s actions?

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

Does my hon. Friend agree that the changes will unfairly penalise farmers who may be in proximity to high-risk trading activity, rather than having bovine TB in their own herds because of something that they are in control of? They may receive lower compensation simply because of the proximity and activity of neighbouring farms.

[Dr Drew]

That is a very real point, because we still do not know enough about the transmission mechanism of bovine TB. Farmers may be innocent and the disease may have been brought in. We know from such experiences as that in Cumbria that transmission is associated with buying in stock. That certainly occurred after the foot and mouth episode, where the transmission of bovine TB was almost certainly the result of it being in the stock that was brought into Cumbria. That has happened on a number of occasions.

What consideration was given to other approaches to highlight the importance of clean cattle? What guidance has been given to farmers to try to ensure that we have clean cattle and wildlife clear of this dreadful disease, as we all want?

In the NFU’s consultation response—I will not labour the point, because many of the NFU’s concerns replicate points I have made—it was concerned about how the process will operate with the veterinary risk assessment that will be completed by the APHA. If DEFRA does not have sufficient confidence in the process and relationships with the state veterinary service are not always as good as they might be out on the farm, how can we say definitively that the farmer will not be the main loser? Farmers are losing money, but they are also, dare I say it, losing confidence in the process. DEFRA continually emphases its commitment to industry sustainability, and yet the order could place businesses under severe financial constraint. It would be interesting to know what the Minister intends to do to build confidence in the fairness of the process.

I have two more points from the NFU. It said that DEFRA should allow cattle keepers the option to pay the slaughterhouse in advance to clear the process. I made that point, but the NFU is clear that there needs to be a direct mechanism with slaughterhouses, rather than the current retrospective process. Finally, the NFU said that there is a need to consider that most cattle that go for slaughter because of TB are not at the stage of production or conditioning that is normal for finished animals. They may not have spent any time on dry pasture or bedding to help to clean them. The order will further penalise a cattle keeper who is already losing the production potential of an animal that is taken early.

To conclude, this debate is about technicalities, but it is also about farmers’ feeling that the process with an animal that is taken is somewhat unfair. Having dealt with the Minister, I know he is fair, but the process—in my case, the animal was a pet—is quite brutal. There is a view among farmers that they are always the ones who have to make sacrifices. They are making sacrifices with the cull, and the order creates another slippery slope by reducing yet again the compensation that they have received under successive Governments. Farmers are under huge pressure. I hope that the Minister will be able to allay a lot of those fears and keep the discourse going with the farmers’ organisations, which are not happy.

We need to deal with this dreadful disease, not make it worse. The bottom line is whether people will be tempted to take the law into their own hands if we withdraw compensation. I have always felt that one of the problems is that people under financial burdens are too often tempted to deal with those difficulties in other ways. I am not accusing farmers of any illegality, but these are desperate people who face a desperate disease and have to make very difficult decisions. If they are not compensated for the animals that they have lost, that can only add to their desperation.

--- Later in debate ---

[George Eustice]

As I said, at the moment the official veterinarians apply a clear, objective set of criteria. I am more than willing to share the full detail of those criteria with my hon. Friend, but they are applied very objectively by official veterinarians who work for the Food Standards Agency and have a great deal of experience of this work. As I said, we are talking about just 20 animals a year—a very small number.

[Luke Pollard]

The hon. Member for North Herefordshire raised a really interesting point about what happens in the event of a dispute about whether an animal is unclean. It does not look like the draft order provides for an appeal process. If there is concern that this measure will be used to reduce compensation for farmers, it seems logical that there should be an appeal process. Will the Minister deal with that?

[George Eustice]

The approach will be exactly as it is now. The official veterinarian makes the decision about whether to condemn an animal for being too unclean to process. We have just passed legislation to have CCTV in slaughterhouses, and the official veterinarian collects photographic evidence to demonstrate that an animal was unclean. The OVs have processes to manage this. Ultimately, the FSA is independent and the OVs on the ground will make the decision, as they do on many other such issues.

The shadow Minister asked why we are making these changes. My approach to changes to compensation is clear: I have always rejected such changes simply for the purpose of saving money. In my view, we should change compensation arrangements if that will change behaviour. He also asked about the legal implications. I point out that we are doing exactly what the Labour Administration in Wales did in 2016. We are simply bringing England into line with the approach that has already been adopted in Wales, which has been successful and has not led to legal challenges.

The shadow Minister asked how we would determine whether a breakdown was due to a disease that an animal contracted before it entered the herd or when it entered the herd. We do not intend to make that distinction, since we are trying to incentivise caution among farmers about the animals they buy in. We want to make clear that if farmers are trying to go clear, they should not buy in animals that are at high risk of having TB. If it is possible for farmers to delay re-stocking and be more cautious about the way they do that, they may choose to do that.

I was very clear—we changed the order from its original draft to reflect this—that I want to ensure that any farmer who signs up to the CHeCS-accredited scheme to demonstrate that they are taking biosecurity seriously and taking proactive action to reduce the exposure of their herd will still qualify for 100% compensation. Any farmer who might be affected by this 50% reduction by bringing animals into the herd when they have an ongoing breakdown can mitigate that immediately simply by signing up to the CHeCS accreditation scheme. Anyone can join CHeCS; they have that option.

The second option, which should be seen in the context of earlier points, is that if a farmer has a breakdown or an animal is brought on, he would now have the option to go for private slaughter and get the salvage value under one of the other provisions that we are introducing. Even if a farmer said, for entirely ideological reasons, “I refuse to do biosecurity because I believe badgers are to blame, and I am not going to do biosecurity; I won't sign up to checks,” he still has the option to get a salvage value by sending that animal to a local abattoir of his choosing.

My final point is on scale. About 1% of cattle herds bring animals on to their herds when they are under a restriction. They tend to be predominantly dairy herds. We suspect that around 250 herds might be potentially affected by this measure, but every single one has the option to join the CHeCS scheme and to immediately mitigate that risk. That would be a positive step forward.