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We have before us a series of statutory instruments. The first is the Agricultural Business Development Scheme (Scotland) Regulations 2000 (SSI 2000/448). The instrument was laid on 21 December and we have been designated as the lead committee. It was circulated to members on 9 January and the clerk has not received any comments. It will be dealt with under the negative procedure, which means that we have up to 40 days in which to choose to annul it.
This instrument, which sets out an agricultural business development scheme, follows on from the famous, or infamous, agricultural business improvement scheme, the handling of which I think everyone agrees was a fiasco. Is this scheme seen as a son of ABIS? Will the people who were encouraged by Lord Sewel to apply under ABIS—many of whom spent a huge amount of money but discovered at the last minute that, for various reasons that we do not have time to go into now, they were unsuccessful—be eligible under this scheme?
The ABDS Scottish statutory instrument, which you have today, is part of the new Highlands and Islands structural fund programme, which is the successor programme to objective 1. The scheme has been designed with completely different objectives in mind. It is to assist businesses, farmers and crofters in the Highlands and Islands who wish to restructure or diversify their businesses. The scheme has been designed by a partnership of Highlands and Islands organisations, the Scottish Crofters Union, the National Farmers Union Scotland and the Scottish Landowners Federation, which are content that the scheme is the right vehicle to deliver the objectives that are set out in the Highlands and Islands special transitional programme.
Who of those who were eligible for ABIS will be ineligible for this scheme?
The menu of items that are eligible for support under the ABDS is shorter than that under ABIS, but if someone wishes to look at new ways of generating income or wishes to restructure their business to meet the economic challenges that are ahead of the industry, they should be able to apply, provided that they meet the eligibility criteria for farmers or crofters.
I am pleased to see that the instrument defines an eligible person as
That is correct.
One of the problems of ABIS was that there was a late surge of entries after the rules were eventually relaxed in the spring of the last year of the scheme. What system is being put in place in this scheme to ensure that there will be a reasonable take-up of the total available funding in the first year of the scheme? Are you able to tell us how much money has already been committed from the scheme and what the total pot of money for the scheme is?
This time, we have completely different delivery arrangements. Part of the problem with ABIS was that the value of the applications we received in the last 12 weeks of the scheme almost exceeded the total funding over the programme's six years. This time, we will take a tranche-funding approach, which will let us know what we are committed to at any one point and what is left in the budget.
You mentioned that you can identify the tranches of money that have been made available. How much has been made available to date?
Nothing as yet. We are here today partly because the first official meeting to score and assess projects will take place in Inverness this Friday. I understand that we have 70 applications to consider, but we have not committed any money from the scheme as yet.
Will favourable consideration be given to applications from crofters and small hill farmers who will lose out fairly massively under the new less favoured areas deal?
No, I do not think that there will be that kind of preferential treatment. The scheme is open to farmers, crofters and members of farming and crofting families in the Highlands and Islands. The allocation of grants will be based on the strength of and the justification set out in individuals' business plans, which we can also fund under the scheme. The two schemes are entirely separate.
For strange historical reasons, rural Aberdeenshire is not the Highlands and Islands. What is the equivalent legislation to help farmers diversify in Aberdeenshire?
We are working on a new scheme called the farm business development scheme which will cover all rural areas of lowland Scotland. We had to give priority to the Highlands and Islands because of the time scales within which the new structural funds programme for the area had to be delivered. However, work is pretty well advanced on the farm business development scheme, which will cover the creation of new income-generating opportunities for farming families in lowland Scotland, including rural Aberdeenshire.
What is the time scale for delivering that scheme? Does it have a predecessor?
We have submitted a state aid notification to Brussels. Furthermore, we are working with our legal colleagues on legislation and we are quite well advanced with the scheme literature. As a result, I hope that the scheme will not be too long in coming. We will make an announcement as soon as possible.
Is there any indication of funding for the new scheme in lowland Scotland, as the rural bits of Deeside are called?
We do not have regional budgets. However, new marketing and processing schemes are coming on-stream over the period to assist small-scale and large-scale processing of agricultural products. We reckon that we will have about £77 million in total over the period 2001 to 2007.
I am delighted to hear that Richard Lochhead is promoting rural Deeside as well. I will move on immediately to Mike Rumbles.
I was just going to pick up on that point. I represent West Aberdeenshire, and—
So do I.
People who live in the Cairngorm area of my constituency will be interested to learn that Jim Stephen believes that they live in lowland Scotland. That was an interesting use of terminology. He was, of course, referring to the Highlands and Islands region, rather than to the Highlands of Scotland.
Perhaps I can answer that question.
I do not want to get into semantics, but when I said that judicial review is open to everyone, I was referring to the point that you just made about decisions that are made by governmental organisations. A judge can be asked to overturn such decisions, but judicial review is the end-of-the-line approach. The other points that you made were very general.
The Executive's position on the question raised by the Subordinate Legislation Committee is that, as a matter of law, it is not necessary to have an appeals mechanism.
Is it good practice?
It may or may not be good practice, depending on the circumstances of the decision that is subject to review. The Subordinate Legislation Committee makes the point that an independent appeal may make sense when questions of fact are in dispute and one person says X is the case while another says Y is the case, because the person who determines the facts might get them wrong.
Does not the scheme involve factual matters?
The scheme does not require ministers to determine whether one person's version of the facts is to be believed over another person's; the Executive exercises discretion to grant a scheme. An application form is received and, unless something is obviously wrong with it, it will be taken at face value.
Surely that is the point. Mistakes can be made in decisions and there is no means of putting them right.
There are various means of putting mistakes right. If a person thinks that the Scottish Executive has got the wrong end of the stick, they can ask the Executive to reconsider their application. If an obvious mistake is made, people can complain to the ombudsman or write to their MSP.
Nevertheless, the Executive can just say no.
I agree with the proposition that going to court should always be a last resort. We hope that that would happen only in the smallest number of cases possible. However, the Executive accepts that it is proper to have checks and balances, to ensure that it acts within the law. If the available measures could not provide a remedy, it would be proper to have a formal legal remedy and check on the actions, or a test of the reasonableness of the Executive's decision. Judicial review is the most appropriate mechanism for checking the exercise of discretion.
As far as I can see, a problem has been flagged up, to which I would like to return.
Can people who applied for ABIS and had drawn up business plans to back their applications reuse those plans if they meet the criteria for the new scheme? The expense of drawing up a new business plan might be prohibitive.
Under ABIS, a full business plan was not required. Instead, a document called a resource audit was required, which had all the best intentions for identifying priorities for investment. In discussions with the industry during the design phase of the new scheme, there was general agreement that the resource audit fell short of being a useful management tool for the farmer or crofter, or for the new scheme's objectives.
Will there be assistance and funding for that?
Yes.
This follows on from Rhoda Grant's last question. I was surprised to hear that answer because my recollection, from when we questioned the minister following the rather messy end of ABIS, was that some thought would be given to prioritising the claims of those who had been caught out by the rather abrupt ending of that scheme when a new scheme was drawn up. Is there any linkage between applicants under ABIS, who were caught out, and the new scheme?
There is a linkage.
That is gratifying to know. Thank you for that answer.
Paul Cackette can comment on the legal side.
I am not sure that I can add much more to that, other than to say that the notice should be reasonable in all the circumstances that arise. Those circumstances would include matters such as the opportunity to have time to make representations and, crucially, what the consequences of the variation would be on the person who is affected. Variations can be relatively minor, in which case the consequences might be slightly less important, but they can also be very significant. It is perhaps stating the obvious to say that the more significant the consequences on the affected person, the longer it would be reasonable to give them to prepare an argument that variation should not take place.
The rural development programme has been mentioned. I agree that it has been extremely successful outwith the Highlands and Islands; it was certainly well used and effectively used in my part of the country in the south-west.
The rural diversification programme was part of the last round of EU structural funds programmes for the four areas of Scotland designated as objective 5b. To meet the regulatory requirements, the schemes closed for applications at the end of December 1999, but we have two years beyond that to process claims. Provided that the producer got his or her approval by December 1999, they still would have two years beyond that to complete and claim for their work. That is on-going in the Scottish Executive rural affairs department.
Thank you for that answer, but I think that you would accept that it is not entirely ideal that there is such a hiatus. Whose lack of forward thinking led to that? Had the negotiations for the new scheme started about a year earlier, presumably the agency that was providing the funding on the ground—which, in my part of the world, Galloway, has packed up with loss of jobs—could have continued to the benefit of all concerned.
The regulation had to be negotiated. We needed a piece of Community law to back the new schemes and then we had to get on with writing the programmes. I do not think that any fault was involved, but it was necessary to go through legal hoops and negotiations to secure the European Commission's agreement to provide European agricultural guarantee and guidance funding for the rural development programme.
My question follows on from your response to Rhoda Grant's question. I have studied regulation 4, which sets out requirements for the business plans that must be submitted. My reading of that regulation is that nothing would preclude someone who submitted a business plan under ABIS and whose application was unsuccessful from resubmitting that business plan and receiving payment of up to £400, provided that the plan submitted under ABIS was for a purpose, such as diversification, that qualified under the new regulations. Am I right?
With respect, no.
Can you tell me why not? If there are proposals under ABIS that should qualify under the new scheme, such as for diversification, it beggars belief that people who have gone to massive expense in preparing an application for a scheme that was mishandled now find that, although the application is for a purpose that falls within the scheme and is still relevant, they have spent all that money on a business plan and still cannot recoup it.
The ABIS resource audit was not a business plan. It ran to only a few pages and is now regarded by many, including farming and crofting organisations, as something that fell short of a business plan. People who applied for resource audits under ABIS may have been funded for them, although they may not have received approval for a full-scale application because of time factors. We have a model business plan for the ABDS, which is a significant improvement on the ABIS resource audit. That is what we will be supporting under the new scheme. It would not take a great deal of effort or time to transfer information from an ABIS resource audit to an ABDS business plan, but we require more information and analysis this time, so that the outcome resembles a proper business plan rather than the thinner resource audit that was a feature of ABIS.
I am very surprised indeed by your evidence and by your earlier response to Rhoda Grant, when you said that the business plan under the new scheme was much more substantive. I know from a huge postbag of complaints from constituents that some of them spent thousands of pounds just to get the paperwork right to submit ABIS applications. I am, frankly, flabbergasted that you are describing this scheme as requiring a much more substantial effort by way of paperwork than ABIS. God help the applicants if that is the case.
No.
Should not the rules be redrafted to allow that money to be recouped? The reimbursement of the money that they spent on the basis of Lord Sewel's undertaking, which has been well documented, would ensure that natural justice was served.
I appreciate what you are saying, but, as I said earlier, the scheme is entirely different and has an entirely different administrative and legal structure. I hope that people who were unsuccessful under ABIS will be able to reapply and secure the grant for their projects this time around. That is everyone's genuine wish. I reiterate the fact that the new scheme and all the arrangements that go with it have been developed not just by the Scottish Executive rural affairs department but by the wider partnership of Highlands and Islands bodies and the industry representatives, who are happy with what we have put in place and with the appeals and complaints mechanisms that are built into the scheme. We are proceeding on that basis.
We are coming close to the time when we will have to decide how we are to proceed. Does Mike Rumbles wish to comment?
Yes. Mr Stephen, you indicated earlier that you did not think that it was necessary to have an appeals mechanism because of the availability of the judicial reviews process and the Scottish Parliament's ombudsman, although he examines maladministration rather than challenging the decision. However, that response is curious. It suggests that you are opposed to the appeals mechanism in principle, but the excellent document that was produced yesterday, "Working together for Scotland", contains a contribution from your department that reads:
I am perfectly aware of that comment in the programme for government. Bear in mind our comments that the ABDS requires a high degree of discretion. My understanding is that the appeals mechanism for EU subsidy schemes is intended to address concerns about or representations against schemes that are obligatory on member states—the mainstream common agricultural policy's livestock and arable schemes—and which operate within rigid legal frameworks. The criticism of the department in the past has been that we have allegedly taken a heavy-handed approach to people who have missed deadlines for claims or whatever. The ABDS is different from the mainstream EU subsidy schemes in that it is highly discretionary.
You have drawn a distinction between the two schemes. However, you have not explained the raison d'être—why is an appeals mechanism appropriate for one kind of scheme and not the other? You also said that the scheme that we are discussing today is discretionary. Surely that is a greater reason for having an appeals mechanism; it is certainly not a lesser reason. Before we discuss how we should proceed, I would like to say that I am certain that that approach is wrong. I do not want to hold up the scheme, which came into force yesterday, but I hope that when the department considers such schemes in future, it will take on board its own philosophy and apply that to any regulations it proposes.
I draw your attention to regulation 5, which sets out the rules governing applications to the fund. Regulation 5(2)(g) states that the application must include
No. That subparagraph seeks to avoid the double funding of schemes. If a person is receiving a grant from the department for a project, we want to ensure that they are not getting a grant for the same project from a local enterprise company, a local authority or another public sector body. If someone was unsuccessful under ABIS, by definition they have not received a grant. Therefore, if they were to reapply under the ABDS, regulation 5(2)(g) would not cause a problem.
I am grateful for that clarification, Mr Stephen. I assume that your evidence has some legal status, but I would ask you to reconsider the issue, because an ordinary reading of the provision might prevent those who have applied previously from obtaining funding. Although regulation 5(2)(g) aims to prevent double funding, it specifically states that those who have previously "sought" funding cannot receive it. If someone has sought funding under ABIS, you do not want to disqualify them from receiving funding under the ABDS. There appears to be a defect in the draftsmanship, which should be corrected. Perhaps you could consider that in more detail and provide a response for the committee before we take a final decision on the regulation.
I have a suggestion to make. Someone said earlier that the regulations could be amended by Scottish ministers at any time. Rather than hold back the regulations, we might write to the minister with our concerns. We could ask the Executive to reconsider a provision in respect of the people who applied for ABIS—not guaranteeing them money from the new scheme, but putting them at the front of the queue. We could make those points and ask the minister to consider amending the regulations under the appropriate provision. We do not want to hold up a scheme that will pay out much-needed money.
The relevant provision on amending conditions is found in regulation 6(1)(c).
We have the option to postpone our decision on the regulations for a further week—we can address the matter at our meeting next week. Therefore, I propose to continue this discussion next week. That gives us an opportunity for further correspondence with the relevant officials and the minister. It also allows the necessary time for a motion of annulment to be lodged, should anyone feel that that is appropriate. If we have made adequate use of the officials here today, I propose to put this item on next week's agenda.
In that case, I thank you for your help, gentlemen.
Item 9 of the Executive note states:
That is an interesting comment, but it is really for the Health and Community Care Committee to ask for clarification on that. I am content that the instrument lies firmly in the court of that committee. Unless there is anything that we feel relates directly to the remit of the Rural Development Committee, it is unnecessary for us to comment.
This is a general comment—which concerns this and other instruments before us—to do with the 30-month rule. We should perhaps write for clarification on it, rather than deal with it as part of our discussion. Can we obtain more information on whether the instrument will do away with much of the red tape involved in the 30-month rule? If cattle passports are to identify cattle that are more than 30 months old, as a simple test of whether they are clear of BSE, surely all the administration that currently goes on to get cattle over 30 months on to the market—Highland cattle have a specific problem—could be done away with. If the regulations were simplified, it would mean that if someone is selling a cow for consumption that is over 30 months old, they have it tested; end of story.
It would be reasonable for us to ask for comments on that. I will write to the Executive to ask for an indication of its thoughts on the matter. If there are no further comments, are we content that we do not require to comment on the issue to the Health and Community Care Committee and that we will allow that committee to make up its own mind on it?
The next instrument is the Feeding Stuffs (Scotland) Regulations 2000 (SSI 2000/453), for which we are the secondary committee. I have a specific concern about the issue. After correspondence—which I understand has been copied to members—I decided that it was appropriate to invite members of the Food Standards Agency Scotland to come here to address that concern. We have with us Colin Forsyth, Caroline Ferguson and Martin Prentice, who have been waiting patiently during the previous discussion.
I would like to give members a little context. The current regulations, which committee members have before them, do not include the non-feed ban, as it has been termed by various people, because of the response to consultations last year and because further European negotiations are in train that may affect the issue. The regulations that members have exclude the provision that was in the draft that was put out for consultation. That would have banned the non-feed delivery of permitted additives. The regulations as now presented will control the delivery of additives in feed, but they do not deal with non-feed delivery. The problems that came to light last year were mainly to do with the non-feed elements of delivery.
Can you indicate the likely time scale for any subsequent instrument that may be introduced and which might have the same effect?
It is difficult to be definitive with regard to any subsequent instrument. The time scale depends partly on our exploring the matter further. A good deal more work remains to be done on the precise impact of the rules. There are also continuing discussions in Europe on the feed additives directive and the nutritional supplements directive, which might impact on the arrangements for controlling non-feed additives.
Is the instrument therefore likely to come before this committee or the Health and Community Care Committee before the summer recess?
It would be reasonable to speculate that such an instrument will appear. Its precise effects will depend on what progress is made in European discussions in the meantime.
If I discover that I am talking to the wrong person in asking this question, please let me know and I will find somebody else to answer it. At present, many farmers have a registration that allows them to use or mix mineral supplements and to sprinkle them on to feed, on farm. That is the same registration that is required for feed manufacturers. Would that registration make it possible for registered farmers to continue with existing practice, or would the registration have no effect on any directives that might be implemented by further legislation?
The fact that farmers were registered would mean that they could produce a properly mixed feed, including the additive. Provided that an additive was incorporated in the feed, that feed would fall within the provisions and would still be allowable, even if the new provision was in place at some stage in the future. If a farmer was in the business of home mixing and mixed the additive properly, knowing what quantity they had added to the feed material, that would be entirely appropriate. Once they had done that proper mixing of a complete feed, they could use that feed with other feeds, for their animals. Ad hoc throwing or sprinkling of the material—without any conscious control of the amount going to particular animals or even the homogenising of the resultant mixture—poses the problem. It might be that a home mixer who mixed extensively would mix in the additive properly, and would not be covered.
I thought that the point of the meeting was to discuss what is on the agenda. We should be discussing what is in the directives—I do not think that it is appropriate to discuss possible future instruments. Some of the questions that are being asked would be better addressed to the Executive. This is not the first time this afternoon that we have discussed not matters that are on our agenda, but possible or previous legislation. I suggest that we stick to the agenda, rather than engaging in speculation about other—
It is up to me—as a member of this committee—to satisfy myself that there is not a problem with the instrument that is before us.
But you got assurance from the Executive earlier on.
I am happy with the reassurance that I have now received. If, before we progress, there are further questions, I will be delighted to hear them now.
I thought that your questions were apposite and I am pleased that they were raised, convener—I am sure that they are of concern to farmers. Also, you offered the witnesses the courtesy of giving them advance notice of your questions, which seems to be a very helpful approach.
If there are no further questions, I thank Colin Forsyth for attending and for helping the committee with this matter.
The instrument requires cattle that are not already registered to be registered by 29 January. I have received representations from farmers who have been trying desperately to register cattle that had not been registered by 29 January, but have found it impossible to do so because of their inability to contact the registration authority. I do not know whether anybody did not manage to register cattle, but I am concerned that the fact that there were not enough people manning telephones might have put people on the wrong side of European legislation.
The programme of retrospective registration of older cattle has been going on for many months, and the vast majority of cattle have been registered for some time. I am disappointed to hear of such individual cases.
I think that there must be many such cases. One farmer to whom I spoke spent three days trying to get through on the telephone—he called every hour or so, whenever he was near a telephone. He did not manage to get through until he noticed that there was a Welsh-language service, which he thought not many people would be using. I think that he gets full marks for initiative. I hope that people are not caught out by the instrument and find themselves on the wrong side of legislation.
Nobody should have been caught out—the scheme has been operating on a voluntary basis for some time. The instrument has the effect of introducing a date on which registration becomes a legal requirement. That is an unusual practice in a statutory instrument, particularly given that the scheme has been working retrospectively for some time.
As long as the Executive does not welsh on the deal.
Are there any further comments?
The next instrument is the Specified Risk Material Amendment (Scotland) Regulations 2001 (SSI 2001/3), on which the Health and Community Care Committee is the lead committee. We have a secondary role and are afforded the opportunity today to make any comments that we would like to pass on for the consideration of that committee.
The Specified Risk Material Order Amendment (Scotland) Regulations 2001 (SSI 2001/4) is a similar instrument. Are we content that there is nothing on this instrument to which we want to draw the Health and Community Care Committee's attention?
Meeting continued in private until 15:45.
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