Christopher Booker's Notebook Sunday Telegraph April 21

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After the betrayal of Gibraltar, it last week became clear just how ruthlessly our Government is now prepared to betray our other small dependencies, the Channel Islands. Ten days ago in two remarkable telephone calls, Treasury minister Dawn Primarolo gave Senator Pierre Horsfall, Jersey's senior politician, an ultimatum. Unless by last Tuesday his government was prepared to sign the European Union's 'Code of Conduct' on 'harmful tax competition', his island would have to face the consequences, even though, as Crown dependencies, the Channel Islands are not in the EU.

This marks the end-game of a battle which has been raging behind the scenes for three years, ever since Britain was threatened by the EU with a tax on international investment which would destroy London's overseas bond market and deal a devastating blow at its position as a world financial centre. Britain's counter-gambit, in the EU Code of Conduct group, chaired by Mrs Primarolo, was to offer as a sacrifice the Channel Islands and the Isle of Man, whose economies rely on financial services attracted by their low tax regimes. The islands knew that, as the City's second largest source of overseas funds after Switzerland, they could not meet the EU's demands without destroying the sector providing 70 percent of their income. But they relied on the guarantee given by Britain 30 years ago, when we joined the European Community, that their tax sovereignty was untouchable.

Ten days ago the British Government sprung its trap. Primarolo hectored Senator Horsfall that, unless he signed up by last Tuesday to the code of conduct which would wipe out Jersey's low tax regime, he would be answerable for the consequences. Horsfall pleaded for more time, but in the small print of Gordon Brown's budget on Wednesday was a measure to impose penal taxation on UK companies which take advantage of Jersey's low taxes. The same day in Jersey's parliament Senator Paul Le Claire, the only local politician who has consistently tried to wake up islanders to the threat, put a series of questions which showed how devastating it would be to lose the tax rules targeted by the EU. Much of the £103 billion on deposit in Jersey, over half from the UK and other EU countries, would simply move to low-tax regimes elsewhere, including Switzerland.

As they see how remorselessly the UK Government is now prepared to rip up those 30-year old guarantees of their tax sovereignty, the Channel Islands' leaders are like rabbits in headlights. Senator Le Claire is the only politician who has long warned that, if these threats materialise, Jersey may have to reconsider its tie to the British Crown. As the deadly chess-game moves to its climax, facing them with financial meltdown, it may soon dawn on his fellow-islanders that this is the only move they have left.

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Last week I challenged agriculture minister Lord Whitty's claim to MEPs that the controversial 'contiguous cull', under which millions of healthy animals were killed during last year's foot-and-mouth catatstrophe, had been upheld by the courts.

On Wednesday three peers, Lord Monro of Langholm, Lord Onslow and the Countess of Mar, asked Whitty to substantiate his claim. His reply was that the cull was upheld in two cases known as Winslade and Westerhall. "The legality of the cull is not in doubt".

When I read this to a senior lawyer involved in the battle over the cull, he was incredulous (his exact word was 'b******s!"). Although the government won those cases, they were resolved on individual circumstances. In no way did they approve the cull in principle. The nearest thing to a legal test was the case of 'Grunty the pig' last June, when Mr Justice Harrison ruled in the High Court that the government had no power to impose a "blanket slaughter policy" and that, under the Animal Health Act 1981, each case must be assessed individually. In other words, wherever the government slaughtered on general principle it was acting illegally. Lord Whitty thus misled not only the European Parliament but also our own. This strangely casual approach to the truth shown by our agriculture ministers was further illustrated by a saga which began last November when Margaret Beckett based the case for her new Animal Health Bill on a claim that 55 farms around Thirsk had resisted the ministry slaughter policy, 29 of their appeals had been upheld, yet nine were later found to have foot-and-mouth.

Following pressure from Lord Jopling, Lord Whitty admitted on December 20 that these figures had been applied to Thirsk in error. They related to the whole of North Yorkshire.

In a letter to Jopling on January 10 Elliot Morley further corrected the figures, admitting there had been only 16 appeals from Thirsk and only two farms found infected; and Lord Whitty grudgingly conceded on the floor of the House that the Thirsk farmers had been maligned. Yet, when appearing two weeks ago before MEPs, he without a blush repeated much the same figures for which he had earlier apologised, claiming that in the Thirsk area 27 appeals had been upheld and seven farms found infected.

Again he must have hoped that if he repeated his untruths, no one would notice. It is getting rather a habit.

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With a high-profile case involving lung disease associated with 'blue' asbestos due to be heard this week in the House of Lords, there are signs that the Health and Safety Executive is becoming rattled by its over-close association with the great 'asbestos scam'. This is the lobbying campaign by a coalition of commercial interests and lawyers to use the dangers to health associated with 'blue' and 'brown' asbestos to blacken the much commoner 'white asbestos', a wholly different chemical. Until recently the HSE was happy to parrot claims that between 3000 and 4000 people a year would die from exposure to asbestos of all kinds: to the delight of the two main multi-national manufacturers of asbestos substitutes, Eternit and Saint-Gobain; the new army of licensed contractors who make a fortune from whipping up the scare over white asbestos; and lawyers cashing in on compensation claims.

Yet it is a scientific fact that not a single case of mesothelioma, a deadly lung disease, has ever been associated with white asbestos cement products, such as roof tiles, which make up 85 percent of all asbestos materials. Even the HSE's own scientists concede that the chief scientific study on which its case against white asbestos rested was fundamentally flawed, since it was unwittingly based just on studying the effects of blue and brown. That figure of 3000-4000 deaths a year, the HSE's statisticians privately admit, should never have included white asbestos. And in a startling change of line, a recent letter from Bill Macdonald, head of the HSE's asbestos policy unit, now speaks only of 4000 lives being lost "over 50 years".

Furthermore at a recent meeting with the Federation of Small Businesses the HSE admitted it is becoming concerned at the way its licensed contractors are using the confusion over white asbestos to exploit customers. In a dramatic concession, it agreed that most of the surveys required under its proposed new regulations will not have to be carried out by licensed consultants. These often double as the contractors who benefit from work resulting from their own surveys, and who are therefore only too eager to magnify the problem.

The trouble is, however, that the new regulations are based on an EU 'chemical agents directive' passed in 1998. So, even though the HSE is now backtracking over the scare it has been party to whipping up, it is locked into compliance with a directive which was most obviously campaigned for by the two firms which stand to make billions from it being passed into law.

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Two weeks ago I reported the bizarre tale of how, in the name of safety, Lewes council in Sussex had misused a German-designed machine called a 'topple tester' to knock over 431 gravestones in Seaford cemetery. I am delighted to report that last week, following a campaign by distressed relatives, the council 'cabinet' finally admitted it had all been a terrible mistake and agreed to pay for the re-instating of all the flattened memorials, at a cost of over £30,000. The relieved relatives hope the lesson will be learned by other councils and that such an insensitive blunder is never repeated.