Subordinate Legislation Committee, 11 Feb 2003

Meeting date: Tuesday, February 11, 2003

Official Report 135KB pdf

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Instruments Subject to Approval

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Nitrate Vulnerable Zones (Grants) (Scotland) Scheme 2003 (SSI 2003/52)

The instrument contains today's boo-boo. I must not say that, because our two witnesses—Neil Sinclair from the Scottish Executive environment and rural affairs department and James Shaw from the office of the solicitor to the Scottish Executive—will be quite keen on it. Welcome and thank you for attending.

Before we start to ask the detailed questions of which you had notification, I will ask you about paragraph 14 in the Executive note, which says that you do not expect there to be any problem with the instrument receiving clearance from the European Commission. Will you tell us why? It is a point of interest.

Since 1996, England has had a similar scheme that provided grants of 25 per cent when it was first introduced and was later improved to provide grants of 40 per cent. The English have put in a further application on the extended nitrate vulnerable zones. We have yet to hear formally that there is a problem with our application, which the Commission will consider, so we do not anticipate one.

So that we know, please tell us whether it is correct that the Commission has the power to say no and, if it did, you could not pay the grants.

I think that that is correct. If the Commission believed that the scheme was contrary to the state-aid rules, it could say no.

I will ask a further question out of interest and to learn how such schemes work. What happens when the Westminster Government makes a similar application? Do you co-operate with it initially or do you meet up when you get to the Commission?

We submit our application via the United Kingdom permanent representation to the European Union. Our application is passed round Whitehall first, and then, once it is acceptable, it moves on to the European Commission.

I am a wee touch paranoid about that. What do you mean by "once it is acceptable"?

We pass the application down to Whitehall and seek comments from our colleagues there. Once it has been agreed, it goes to UKRep through the Department for Environment, Food and Rural Affairs and on to the European Commission.

Will the same level of grants be paid north and south of the border?

Yes. The grant rate will be 40 per cent.

We will start the detailed questions. [Interruption.] Please excuse me: the clerk was advising me because we have two similar instruments that are equally confusing for the committee.

Will you explain—slowly, please—how paragraph 7 of the scheme is intra vires in relation to section 29(4) of the Agriculture Act 1970?

I do not have much to say, except that we are relatively content that paragraph 7 is intra vires. One of the clerks gave me advance notice of the question by telephone yesterday, which was helpful.

I presume that the difficulty is with section 29(4) of the 1970 act, which provides for the recovery and withholding of grants made under a scheme that is made under section 29 of that act. I assume that the difficulty is that paragraph 7 sets out the grounds under which a grant can be recovered under the scheme.

We are with you so far.

Paragraph 7 was constructed carefully to ensure that it was

"Without prejudice to section 29(4)"

of the 1970 act. We put that in the instrument to make it absolutely clear that we are aware of that subsection.

We do not think that section 29(4) of the 1970 act in any way obliges us to do anything else, because the grounds in paragraphs 7(1)(a) to (d) of the scheme are not found in that section. We believe that their inclusion was necessary to safeguard the grants that we are paying out and their recovery, as the grants ultimately come from taxpayers' moneys. That is why we included those grounds in the scheme.

You could have done it another way, could you not?

What other way could we have done that?

You could have gone to the 1970 act.

We could have done that, but the act does not prohibit the provision. We also make explicit in the scheme the scenarios in which we believe grants may become recoverable. If you look at the grounds in paragraphs 7(1)(a) to (d), you will see that they are specific. They particularly attack recovery of moneys in circumstances that might not have been envisaged when the 1970 act was passed.

We have been up front about the scheme's provisions by saying that we know about section 29(4) of the act. We constructed the scheme carefully so that an applicant could be in no doubt as to whether we were recovering a grant under section 29(4) of the 1970 act or under paragraph 7 of the scheme, because the grounds for doing so do not overlap.

We were not suggesting that you were being sneaky.

I am sure that you were not.

I think that I understand the instrument a bit better now. As no other members wish to pursue the matter, I thank the witnesses for their evidence. That is all. It did not hurt a bit, did it?