Written Answers. - Proposed EU Disallowance.

Desmond J. O'Malley

Question:

48 Mr. O'Malley asked the Minister for Agriculture, Food and Forestry the current position in regard to the European Union's proposed disallowance of £109.925 million in respect of his Department's breaches of the regulations relating to intervention and allied matters during each of the years 1990 and 1991, referred to at page 524 of the beef tribunal report. [1833/96]

The current position in relation to the proposed £109.925 million disallowances is that £5.956 million was paid to the Commission in 1995 as part of the 1991 clearance; a legal settlement of £61,000 was paid in 1995; some £94.799 million is being handled within the 1992 clearance, and the Commission has deferred action on £9.1 million relating to valuation of beef pending the outcome of legal proceedings on an insurance claim.

The £94.799 million covers the beef public storage inquiry, the beef tendering issue and premia payments. The FEOGA committee was formally consulted on 24 January on a proposed disallowance of £74.264 million, that is 10 per cent of expenditure in 1990 and 1991 in relation to the Commission's inquiry into beef intervention storage. The committee had already been consulted on proposed disallowances of £18.475 million in respect of beef tendering procedures, 1991 and 1992 and £2.060 million for premia schemes. A composite proposal is being submitted to the European Commission for consideration on clearance of 1992 accounts. The proposal includes disallowances in respect of other member states on the same issues.

I do not accept there were significant departmental breaches of intervention regulations and certainly none which would justify penalties of the magnitude proposed. I do not believe either that page 524, or, still less, the overall conclusions of the tribunal report provide such a justification. The proposed disallowances have been and will continue to be vigorously contested on the grounds that they are not soundly supported by the facts and that account has not been taken of the conciliation body's recommendations on the public storage and tendering cases or of the Commission's Belle Group criteria for flat rate disallowances.