Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 160-179)



  160. I wish that what you said to me was a comfort but I do not think it is. Whilst I accept that there are other very good reasons why a farmer may have different trading names, I cannot believe that it is a sensible use of your resources to do what you have just described, which was how many thousand parcels?
  (Mr McNeill) 1.7 million parcels of land will be on the land register. That is currently handled by map systems, as we discussed earlier, fields being identified.

  161. Yes, but what you are saying is that for 1.7 million parcels of land you would then have to cross-register multiple names.
  (Mr McNeill) No, sorry, perhaps I was not making myself clear. What we are saying is by doing that and creating a land register, if a farmer in a number of names was to apply for CAP payments, CAP subsidy, we would be able to identify that there was a multiple application and that would enable us to prevent fraud. I have tried to explain the two sides of the equation. One is that we want to have a single business identifier. That may not be possible, as you have identified, for legitimate reasons—the land moves from one part of the family to another, etc.—but what we need to do is make sure that where we have a number of parts of the family or a limited company involved we can still cross-reference that to identify that they are talking about a particular piece of land or a grouping of fields and that way we can avoid multiple applications for grants. That is part of the development of the new systems.

  162. I have listened to what you say but I do not feel comforted by it.
  (Mr McNeill) We have provided the Committee with a diagram, etc., and a booklet which does go into some detail as to how this might come about.

  163. Let me pursue the issue of the fires in the barns. The question has been properly raised, I think it was by Mr Rendel, was there no way of determining what was actually in the barn. Can I just ask, and it may be I have missed this, I understood Mr Bowden had made an insurance claim for the barn but did he make an insurance claim for the contents of the barn?
  (Mr MacKinnon) I feel sure that he did but I cannot actually give you a categoric answer. I am pretty sure that the claims he made against the insurance company did include the lost crop. The crop in his barn under the flax scheme would belong to the contractor with whom he contracted. Some of the recent discussion has talked about Mr Bowden as claimant but under the flax scheme, of course, he was not the claimant, he was the grower, the claimant was the processor who had a contract with Mr Bowden to take all the flax from the fields he was growing in.

  164. A contract that Mr Bowden would subsequently default on because he had no flax to provide and, therefore, presumably there would be some form of damages under that contract.
  (Mr MacKinnon) That would be a contractual matter, yes.

  165. And, therefore, he would have suffered the loss which he was able to claim from the insurance company.
  (Mr MacKinnon) That is my understanding, yes.

  166. In answer to Mr Rendel's question, why has nobody actually tracked back what the loss adjustor who investigated the loss from the barn found when he was investigating that case?
  (Mr MacKinnon) There was no need under the flax scheme arrangements to do that for 1994-5-6 because there was no requirement for processing to actually take place in those years. Subsequently it became a requirement that the flax should be processed and we would have had great difficulty with that claim because clearly no flax was processed following the barn fire. In those years the issue was one, after that time, for the insurance company. I cannot tell you what investigations they carried out.

  167. I am not sure whether we are at cross-purposes or not. I understood that you had said that nobody knew for sure what was in the barn. That was in response to an earlier question. My question to you is this: why did you not find out by seeing what the loss adjustor had determined was in the barn when investigating the claim?
  (Mr MacKinnon) I think my answer to that must be that we were satisfied that the crop which had been grown was flax. Indeed, the court took the same view ultimately in accepting not guilty pleas about falsifying claims for flax.

  168. Okay. In paragraph 3.10 it states "It would have been difficult to identify the crops being grown or harvested . . ." because of this special Viking strain that Mr Bowden claimed to be growing. I believe you said to the Committee earlier that there were two visits, one in September 1994 after the sowing and one in April 1995 after the harvesting but also after it had been lost in the fire—allegedly. Can I ask why would your department send an inspector at a time of year when they knew that it was very difficult to tell the difference between Viking flax and linseed? You know what the growing cycle is. Until I read this report I could not have told you what flax or linseed looked like to save my life. Why on earth would you send an inspector at a time when you know it is going to be difficult to identify? Why did you not send your inspectors at a time when you knew that it would be quite conclusive?
  (Mr MacKinnon) We do our inspections for a number of things. It is not sufficient, for instance, for a grower simply to scatter seed on the land, so we might go and do a post-harvest check, do a stubble count to make sure that the population of plants in the field was consistent with proper agronomic practice. We do a sowing declaration stage inspection to make sure that he has sown the fields that he has said. I think our problem here was our inspector was going along expecting to see plants of the flax/linseed family and knowing that there was a flax claim would have accepted that what he was seeing was flax.

  169. Sorry, forgive me, are you telling me that when your inspectors went there, they did not know that what they were going to see was Viking flax? You are not telling me that because in the report it says, quite clearly, that they were going to do a field inspection of some of the ten per cent of all flax scheme applicants, so they knew.
  (Mr MacKinnon) They knew they were going to see Viking flax, yes.

  170. They knew they were?
  (Mr MacKinnon) Yes.

  171. So they knew that they were going to see Viking flax at a time of year when it was virtually impossible, without actually doing a laboratory test, to determine whether it was Viking flax or linseed.
  (Mr MacKinnon) I am not sure whether a lab test would have been necessary.

  172. We will get on to the lab test, just answer the question.
  (Mr MacKinnon) As far as I know all I have is the inspector's report of that visit when he says that he saw flax growing in the field.

  173. Mr MacKinnon, it is not the inspector I want to nail here, it is you. You were responsible for this, for God's sake. You were the official in charge sending these guys out into the field. What the hell were you doing sending them out into the field at a time when you of all people knew that they could not tell the difference between what they were looking at and something else?
  (Mr MacKinnon) I am not saying that the inspector could not tell the difference. There are similarities, clearly. The inspector said that he was satisfied that there was flax in the field.

  174. Yes, the inspector did say that but you have, in an agreed report, told us—and I quote—it would have been difficult to identify the crops being grown or harvested.
  (Mr MacKinnon) I think that is in the awareness that there was, indeed, a linseed claim under the AAPS scheme. Now we know that, we did not know that at the time and that is the problem and we said we got wrong. We should have done cross checks with the IACS schemes. Had we known there was an AAPS claim there then clearly this would be a different issue.

  175. I am running out of time. Can I just ask what system of specimen taking and lab inspection of crops is now incorporated into your process of inspection, notification, verification and payment?
  (Mr MacKinnon) I am afraid I cannot answer that. I think we would have to give you a note on that.[12]

  176. But it is your system.
  (Mr MacKinnon) It is one of a great number of systems that I have. I have 50 or 60 schemes from the old Intervention Board and another 10 from the old Ministry of Agriculture, so there are some 70 schemes for which I am responsible.

Mr Osborne

  Mr Osborne: Chairman, I should put on record that I was the special advisor at the Ministry of Agriculture from 1995 to 1997, although special advisors did not occupy the seventh level of hell in those days. Nevertheless, it does cover a period covered in the report—

  Mr Steinberg: So you were to blame!

  177. I recognise some of the faces there. To follow up what Mr Gardiner was saying, if you turn to the front cover of this report, is that linseed or flax, Mr Bender?
  (Mr Bender) I cannot answer that. I am not an expert and I would not claim to be.

  178. Mr MacKinnon?
  (Mr MacKinnon) I do not know either.

  179. Mr McNeill?
  (Mr McNeill) No.

  Chairman: Does anybody in the room know?

12   Ev 28, Appendix 1. Back

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