Common Agricultural Policy: Single Farm Payment

House of Lords written question – answered at on 8 January 2008.

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Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

asked Her Majesty's Government:

Further to the Written Answer by Lord Rooker on 20 July (WA 55), whether the sum of £50 million by way of financial correction in relation to the single farm payment scheme payments between 30 June 2006 and 30 March 2007 was a final figure; or whether there have been further penalties imposed subsequently.

Photo of Lord Rooker Lord Rooker Minister of State (Sustainable Farming, Food and Animal Welfare), Department for Environment, Food and Rural Affairs, Minister of State (Department for Environment, Food and Rural Affairs) (Sustainable Farming, Food and Animal Welfare), Deputy Leader of the House of Lords

The £50 million referred to in my Written Answer on 20 July (WA55) related to late-payment penalties incurred as a result of the RPA missing the EC target of making 96.154 per cent of payments in respect of SPS 2005 by 30 June 2006. This figure has since increased to £63 million for payments made after 30 June 2006 in regard to SPS 2005. This amount was included as an accrual in Defra's 2006-07 resource accounts and has since been paid. A further £7 million was also noted in the accounts as a contingent liability in regard to potential subsequent payments.

Defra also included provisions totalling £348 million in the same accounts in respect of potential financial corrections (disallowance) imposed by the European Commission for breaches of EC regulations in making payments for SPS 2005, SPS 2006 and other precursor common agricultural policy schemes. The Commission has yet to make any proposals regarding disallowance relating to the single payment scheme. Defra continues to review its potential liabilities on an ongoing basis.

Detailed discussions will take place with the Commission over an extended period, possibly two or three years, before a final figure is reached on any disallowances. The outcome will be disclosed in the department's resource accounts in the year in which any financial corrections are imposed.

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