The Government has promised beef farmers a one-off compensation of £85 million, but warned that support from the public purse cannot continue indefinitely. It also announced details of an independent inquiry into BSE.

Jack Cunningham reading the delayed statement

The Agriculture Minister, Jack Cunningham, speaking in the House of Commons, said beef farmers will get £60m from the European Union, distributed through extra payments for suckler cows. The other £25m will be paid out in increased Hill Livestock Compensatory Allowances during 1998.

He said the Government's long term aim was to reduce subsidies to beef producers and bring about a restructuring of the industry through early retirement and other measures.

He said that the number of beef producers should be reduced - and that the Government would begin consultation with farmers as quickly as possible.

BSE inquiry

Jack Cunningham's statement (7'41")

Dr Cunningham also announced that Lord Justice Phillips would be asked to head an independent inquiry to try to establish the precise origins of BSE and look at whether the response to the crisis was adequate.

He said the Prime Minister, Tony Blair, had written to ask former Prime Ministers Lord Callaghan, Baroness Thatcher and John Major, about releasing papers from their administrations. The inquiry has been given a year to draw up its report.

Reaction

The National Farmers Union said it would cooperate fully with the inquiry and welcomed the package of support measures.

NFU president Sir David Naish said the probe should not be used as an excuse to stall any easing of the ban on exports of British beef imposed by the EU.

He added that the extra funding would be a lifeline to some individual farmers: "We are very grateful," he said.

However, the Conservatives said Dr Cunningham was effectively exporting jobs in the beef industry to the rest of Europe.

Michael Jack, the shadow Agriculture Minister

Michael Jack, the shadow Agriculture Minister said the compensation package was "a travesty" and that the inquiry represented an "open goal to those in Europe who do not want the beef ban lifted".

He said those in the EU who had an interest in seeing the ban remain would argue it was better to await the results of the inquiry before even considering lifting it.

Computer glitch

The announcement was delayed because of a computer crash in Whitehall. Dr Cunningham apologised for the problem, which meant that copies of his statement were not available to Opposition MPs.

He said there was no way the computer failure, in his office, could have been foreseen, adding: "Those who put their faith in technology sometimes have a price to pay."
 

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