The Committee consisted of the following Members:
Chair: †Mark Pritchard
† Benyon, Richard (Newbury) (Con)
† Debbonaire, Thangam (Bristol West) (Lab)
† Drew, Dr David (Stroud) (Lab/Co-op)
† Eustice, George (Minister for Agriculture, Fisheries and Food)
† Green, Kate (Stretford and Urmston) (Lab)
McGinn, Conor (St Helens North) (Lab)
Mann, John (Bassetlaw) (Lab)
† Morris, Grahame (Easington) (Lab)
† Pollard, Luke (Plymouth, Sutton and Devonport) (Lab/Co-op)
† Quin, Jeremy (Horsham) (Con)
† Robinson, Mary (Cheadle) (Con)
† Sturdy, Julian (York Outer) (Con)
† Swayne, Sir Desmond (New Forest West) (Con)
† Thomas, Derek (St Ives) (Con)
† Tracey, Craig (North Warwickshire) (Con)
† Turley, Anna (Redcar) (Lab/Co-op)
† Wiggin, Bill (North Herefordshire) (Con)
Mike Everett, Committee Clerk
† attended the Committee
Seventh Delegated Legislation Committee
Wednesday 24 October 2018
[Mark Pritchard in the Chair]
Cattle Compensation (England) (Amendment) Order 2018
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?
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.
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.
It is very nice to serve under your chairmanship, Mr Pritchard.
Preventing cattle from being brought into herds in which there is an infection that has not been cleared up is an excellent change to the rules, but I am really disturbed by and concerned about proposed new paragraph 5A of the schedule to the Cattle Compensation (England) Order 2012, which relates to compensation payable when
“an animal is presented for slaughter for reasons of tuberculosis, and…the official veterinarian at the slaughter house is of the opinion that the animal is not in a clean condition”.
I must declare an interest as an owner of cattle, as well as drawing the Committee’s attention to my entry in the Register of Members’ Financial Interests. I am bothered by proposed new paragraph 5A because my cattle do not like being tested for TB. They get jabbed in the neck twice, and three days later the vet comes back to feel the bumps. The cows do not know what is going on or whether to expect another jab in the neck. They find the whole thing upsetting, and for a few days afterwards they are very jumpy. These are Herefords, which are the most calm, gentle and wonderful cattle—the world’s No. 1 beef breed.
That is enough plugging. Bearing in mind the pressure on abattoirs, the costs that vets incur and the pressure to make money all the time, there is an inherent temptation for vets to say that cows are dirtier than they would if there were no financial consequences. Equally, cattle cannot be clipped after they have been tested, because it is desperately dangerous. They are not happy animals, and they have four hooves that will smash your head in without meaning to. There is a genuine risk to human health if we not only insist that people have their cattle taken away against their will and with great sacrifice to their business plans when they face the misery that TB inflicts, but then say, “By the way, you’d better make sure they’re clean enough, or the abattoir will dock 50% of your compensation.” That is asking for trouble.
I am led to believe by the Government that at the moment only 20 cattle a year are deemed to be too filthy to be worth killing. However, I think the Government need to do considerably more to put my mind at rest that we are not voting in support of a change in the rules that will cause good farmers who are a bit worried to clip cattle, either before or after TB testing. We need to ensure that this is proportionate. For 20 cows a year, we are talking about £100,000 of compensation. That is not enough to risk one life; no amount of money is worth that. A terrible mistake is being made.
We need to find a different way to ensure that people give their cattle a level of care and welfare that keeps them clean. The suggestion made by the Opposition spokesman was a good one: the abattoir should receive a payment from the farmer to ensure that the animal is in a clean enough condition to be killed. If the vets are going to condemn an animal, they should have to photograph it. I would like to see some sort of appeal process so that when the system starts to proliferate, which it inevitably will, we can say to the Minister, “This is what we did today. What a mistake we made—perhaps we can revisit it.”
I would like to hear good things from the Minister about protecting farmers’ health and safety when they are going through the most traumatic and miserable thing that can happen on a farm in the course of normal business. I have been keeping cattle for quite a long time. There is not just one test a year; there are pre-movement tests as well. TB tests are not fun. My children dread them because they have to help, and we all get hurt—it is not all right. Farmers must do those kinds of things to fight this ghastly risk to human health.
It is great to have the opportunity to debate this order and to set out the Government’s position on these matters. I will turn later to some specific points made by the shadow Minister and by my hon. Friend the Member for North Herefordshire.
Bovine TB is the most pressing animal health problem in the UK today. Over the last 12 months, more than 33,000 TB-affected cattle have been slaughtered in England, which is an appalling waste. The disease is damaging our rural businesses and causing much distress for farmers and rural communities. The cost of controlling the disease is about £100 million a year and a big burden on the taxpayer. To protect industry and to reduce costs for the taxpayer, it is right that the Government should continue to take strong action to ensure that we have a successful and resilient cattle farming industry as the UK enters a new trading relationship with the world.
Our comprehensive strategy to eradicate TB includes commitments to strengthen cattle testing and movement controls; to cull badgers in areas where they are an important factor in spreading the disease to cattle; to support badger vaccination in the edge area of the high-risk TB area; and to improve biosecurity on farms and in trading. Adapting the way that compensation funding is used to incentivise the take-up of good biosecurity practices is an important element of the Government’s long-term TB eradication strategy. That is why we are amending the Cattle Compensation (England) Order 2012 to introduce small but important changes to the compensation regime in England. These changes will encourage more herd owners to take sensible and proportionate steps to improve their biosecurity, thereby reducing the disease threat to their own and neighbouring herds.
I recognise that, for business sustainability reasons, some TB-affected cattle farmers must be able to bring in new stock to replace the animals that they have lost, and there are no plans to stop this. However, paying full compensation for cattle brought into a herd with a known and ongoing disease problem could be a disincentive for some to take action to reduce their disease risks. That is why we have decided first to follow the example set by the Welsh Government in 2016 by paying reduced compensation for any individual animals that are brought into a herd under TB restrictions and that subsequently pick up the infection and are removed while the herd is still restricted. Cattle farmers who register their herds under the CHeCS TB accreditation scheme commit explicitly to take steps to reduce their TB risks. For that reason, I decided that we will continue to pay full compensation to farmers for herds that are accredited in that way, since they have demonstrated that they are already taking action to protect themselves and to improve their biosecurity.
Secondly, herd owners have the option of sending their TB-affected cattle to their choice of slaughterhouse and taking a payment from the slaughterhouse operator in place of DEFRA compensation, but currently they are sometimes reluctant to do so. Many tell me they would like to use their local abattoir because it is closer and it reduces the stress on the animal, but this option has been taken up rarely. Under the existing rules, the keeper suffers a financial loss if the animal’s carcase is condemned at the slaughterhouse, since they receive no compensation and no payment from the slaughterhouse. Incentivising keepers to take this option will enable some to negotiate better prices for their cattle with an abattoir that they know and reduce the cost to the Government of compensation. The order includes a new financial safety net provision so that those who opt to organise the slaughter of their TB-affected cattle locally receive compensation at the same rate as other keepers of TB-affected cattle if the animal’s carcase is condemned. We are therefore removing the risk that farmers currently face when they send their cattle to a local slaughterhouse. This measure has been welcomed by the industry.
I very much welcome what the Minister has to say about that aspect of the order, but who makes that decision? Is it the vets in the abattoir, or does the farmer who brings in the animal have to put that to the abattoir as a compensation arrangement? I am a bit unclear about that.
The decision about whether a carcase is fully condemned because the disease is rampant and the animal has too many lesions will be made by the official veterinarian at the abattoir. Currently, a farmer who chooses to slaughter privately with a local abattoir will receive no compensation and no payment for the carcase. In the vast majority of cases, the disease is caught at an early enough stage that the number of lesions is very small, so the abattoirs are able to get salvage value from the carcase—they are able to salvage most of the meat and turn it into value. A number of farmers have told me that they would like to take that option with a local abattoir, but at the moment, the risk that they might get no payment at all is a barrier to their doing so. The decision about whether the animal is totally condemned is one for the official veterinarian. If it is totally condemned, the farmer will receive the full compensation payment.
The third and final change that the Government propose is to reduce compensation for TB-affected cattle that are so unclean that the slaughterhouse operator is unable to process them. The UK has some of the highest animal welfare standards in the world, and the Government are committed to raising them further. I believe that there is no excuse for sending unclean cattle to slaughter. Reducing compensation for cattle that cannot be processed for human consumption will send a clear message that the cleanliness of slaughter cattle, including TB-affected animals, is an important animal welfare consideration. Thankfully, the number of TB-affected cattle that have been rejected because they are too unclean to process is very low—we are talking in the region of about 20 per year.
The order targets bad practice. For example, when an animal is condemned, the farmer might not take care of it sufficiently in the 10 days or so that it might take for the lorry to pick it up and take it to slaughter. He might judge that there is no longer any interest or value to him in that animal and he will get compensation anyway. I want to discourage that sort of behaviour. My hon. Friend the Member for North Herefordshire is a breeder of Hereford cattle; my family are breeders of South Devon cattle. I, too, know what it is like to suffer TB breakdowns, and I know the trauma and distress that that causes. I can say this much: if animals are condemned, my brother takes care of them and ensures they have plenty of bedding in the week or so that it typically takes for the lorry to arrive. If the animals that arrive at an abattoir are so unclean that they cannot even be processed—if they are in the bracket of the 20 per year—it is likely that they have not been sufficiently cared for, and that other animal welfare issues pertain to that situation.
The time that it takes to get cattle picked up is one of farmers’ biggest frustrations. I do not regularly get rung up about it, but when I do get rung up about a herd breakdown, the one thing I am always asked is, “Can you get these animals taken sooner rather than later?” That is the worry about this. I am not saying that neglect is in any way acceptable, but if someone has had a massive breakdown and they are told that their cattle may be taken some time over the next week to 10 days, that is not much of an incentive. Those people are really at their wit’s end. If there is one thing the Minister should take away from this, it is that we should speed up the process by which animals are taken—certainly, once they have a whole herd breakdown.
All I can say is that APHA does run certain programmes for that and picks up the animals as soon as it can. It usually happens within days; sometimes it can take a week.
I return to my initial point: typically, once an animal has become a reactor and tested positive to the disease, the farmer will keep it in isolation in a shed somewhere. Is it really too much to ask that farmers ensure there is full straw bedding in that shed for the week or so that it takes for the animal to be collected? My view is that it is not.
I suspect it is because the Minister has such a kind heart that he is worried about the care shown to these poor condemned animals. However, it is an offence, which is properly legislated for, not to look after animals properly. The draft order is no substitute for proper animal welfare—it is misguided in that respect. Proper legislation is already in place. Will he think again about how he will handle the increased complaints that will inevitably follow when abattoirs work out that vets are under pressure to condemn more and more stock?
Vets have a very objective approach to condemning unclean animals. They do that already, whether it is for TB compensation or for commercial animals. It is worth noting that if a farmer sent a steer to an abattoir to be slaughtered for food consumption in the normal way and it was condemned as too unclean even to process, he would get no payment for that animal. Under this scheme, he would get 50% compensation.
It is important also to recognise that when an animal is condemned, it has no salvage value to the Government. At the moment, we pay full compensation to farmers for the value of their animals, and we try to recoup some of that cost through those animals’ salvage value. Where animals are condemned, there is no salvage value.
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.
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?
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.
The CHeCS scheme is a United Kingdom Accreditation Service-accredited scheme that certifies that farmers are adopting proactive measures to improve their biosecurity. That could include, where necessary, putting additional fencing and protection on yards to stop badgers getting into contact with animals. It can involve adopting a particular risk-based approach to the way they trade. It can also involve investment in special drinking troughs so that badgers cannot get access to them, and so on and so forth.
I often hear from the hon. Gentleman and the Labour party that we should not be doing a badger cull and that we should be doing biosecurity, vaccination and other things. My answer is that we need to do all of those things. In the two areas where we first started the badger cull, we have seen a 50% reduction in the incidence of the disease, but that is not enough on its own. We also have to improve biosecurity and we have to continually refine our cattle movement controls. If the Opposition are serious about this, they must recognise that we must take biosecurity seriously too. That is what we are seeking to do.
I am using this opportunity to check on the CHeCS. The Scottish Agricultural College does not appear on the CHeCS website, yet I believe it is a CHeCS-accredited scheme. The Department needs to have a little look at exactly how the scheme is working. I have been CHeCS-accredited from the beginning, and the tuberculosis bit does not really work. I hope that the Minister will have a little look at that. Could he also ensure that the 20 cattle that are condemned every year are photographed?
On the latter point, yes. I will ensure that that instruction is given to the OVs. I suspect that they would probably do that anyway for their own internal procedures.
On my hon. Friend’s first point, I do not think that is directly relevant to this set of regulations, but I am more than happy to have that discussion with him. The CHeCS system has worked well on other diseases, such as bovine viral diarrhoea. The TB version of it was launched in 2015 with the support of the National Farmers Union and others. It is something that we want to get behind and support.
We will not push the question to a vote, because we are largely satisfied, but I hope the Minister will keep this under review. Cattle-to-cattle transmission is still, according to all the scientists, about 75% of the causation of TB. I do not want to get into badgers and all that. Anything to bear down on biosecurity is very important. Counterintuitively, my argument is that farmers under pressure would do the very opposite to that which the Minister is asking them to do. It may only be 20 cows, but the danger is that there are other things going on out there that we know should not be going on out there, and the Minister needs to keep reviewing this if we are ever to get on top of this dreadful disease.
On the basis of that understanding, we will not push this to a vote, but we will look very carefully at how these things are going to operate. Farmers need to have confidence in the scheme. If they do not have confidence in the scheme, it will not work.
Question put and agreed to.
That the Committee has considered the Cattle Compensation (England) (Amendment) Order 2018 (S.I. 2018, No. 754).