Joint Committee on Statutory Instruments Sixteenth Report


Memorandum by the Ministry of Agriculture, Fisheries and Food


  The Committee has requested a memorandum on seven questions relating to this Instrument. The questions, and the Ministry's answers to each, are set out below:

Question 1: Paragraph 5(1) authorises applications to be made by associations or partnerships but then states that the Minister may indicate that he will also accept applications from individuals or bodies corporate. By what means will his decision to give such an indication be publicised or communicated?

  The decision will be communicated by scheme literature which may change from time to time but will be targeted at potential applicants. It is expected that bidding guidance will also be publicised through press announcements, and it is possible that meetings and seminars with trade associations will also be arranged. It was not thought necessary to include an express requirement for the decision to be publicised by such means as the appropriate Minister considered suitable for bringing it to the attention of potential applicants; practices in the promotion of business support, including appropriate targeting of scheme literature, are well established.

Question 2: Paragraph 5(3) requires the applicant (for his application to be eligible) to declare [(b)] that no financial assistance is to be given "under any [other] enactment or under any instrument of the European Economic Community ". Given that section 50(3)(c) only authorises grant to be withheld where assistance is given under another enactment, explain what power authorises the exclusion contemplated by the bold words.

  The source of power is section 50(1) of the Agriculture Act 1993, the generality of which is not prejudiced by section 50(3); in addition, there is specific cover in section 50(3)(e) which enables the scheme to make the payment of grant subject to such conditions as may be specified in or determined under the scheme. It is a condition of payment that the applicant has made the declaration in question. Section 50(3)(c) is directed at a different situation in time - i.e. after payment has been agreed.

Question 3: Paragraph 6(6)(d) requires an application to give a description of the objectives of the application and of the benefit to the food industry and to the United Kingdom's economy should grant be paid. Given the terms of section 50, subsections (1) and (2), explain what power authorises the bold requirement.

Question 4: Paragraph 7(1) and Schedule 1 regulates the priority the Minister is to give to applications where there are insufficient funds available. Given the terms of section 50, subsections (1) and (2), explain what power authorises the consideration in Schedule 1, paragraph 2, namely the relevance of the application "to the United Kingdom economy" (as well as the food industry as a whole).

  It is assumed that both these questions are aimed at the power, in a scheme based on a section which refers to various elements of the agriculture and food industry, to take into account its effects on the United Kingdom economy in a wider sense. Again, the major source of power is section 50(1), backed by the specific power in section 50(3)(e), plus - in this case - section 50(3)(d) which enables the scheme to confer a discretion on the appropriate Minister as to the payment of grant, as to the manner and timing of payment of grant and as to the amount of grant. The key question is whether the effect on the economy of the UK is a factor which can be taken into account; this depends on relevance. Given that the proposals which may be approved are necessarily limited to those which improve business performance or increase business activity in the food industry (see paragraph 5 of the Scheme), it follows that the effect on the wider economy can only arise as a consequence of the effect on the food industry itself. It was therefore considered that the effect on the wider economy was within the range of relevant factors that could be taken into account.

Question 5: In Schedule 1, paragraph 4 specifies as a consideration for priority "The quality of the application and of any plan for the application of its objectives . . . ". Explain the considerations intended by this paragraph, in particular, as indicated by the two bold words.

  It is understood from enquiry of Speaker's Counsel that behind this question there are two concerns of the Committee, the first being the generality of the term "quality" and the second being the appropriateness of the term "application" as in bold. In relation to the second concern it should be pointed out that the paragraph as a whole reads: "The quality of the application and of any plan [for the application of its objectives] and [for the dissemination of key objectives] to the relevant parts of the industry ". The term "application of its objectives" fastens onto the italicised phrase, so that the crucial test is how the objectives will be applied to the relevant parts of the industry. It is accepted that this could have been made clearer had both square bracket phrases been indented.

  As regards the term "quality", the issue is a substantive one. In policy terms, this Scheme is designed to attract applications from a wide range of bodies and interests and the type of projects that will be submitted is expected to vary considerably. The intention is to permit a broadly based assessment of the reasoning and justification presented within an application for grant, as one element of the evaluation process. As regards the term "application", it was intended that consideration of any plan for the application of the objectives of a project would permit the appropriate Minister to assess the value of the intended mechanism for enabling the benefits realised by the project to be directed to the sector of the food industry at which the project was aimed.

Question 6: In Schedule 1, paragraph 6 specifies as a consideration for priority "Any additional benefits that would accrue from . . . grant". Explain the sort of benefits contemplated, and the persons to be benefited.

  The benefits envisaged are those additional to those specified in Schedule 1, paragraph 1. Matters identified in the current scheme literature as planned to be taken into account include measures of customer satisfaction, scope for increased employment and measures of environmental performance. Each of these issues involves an incidental benefit to classes of persons not directly involved in the industry (consumers, potential employees and those affected by environmental impact) but - given that any proposal could have an impact on them - it was considered that benefits to them were within the range of factors that could be considered relevant.

Question 7: In Schedule 2, paragraph 2, what social security contributions of an employer are meant to be indicated by the words "National Insurance costs", and what kinds of expenditure are meant to be covered by the words "contributions to health care".

  The social security contributions of an employer which are meant to be included in the expression "National Insurance costs" are those for which an employer is liable under Part I of the Social Security Contributions and Benefits Act 1992 (c. 4), and any equivalents under legislation that may come to replace it. Consideration has been given to whether, in view of the focus on that particular Act, the expression "National Insurance costs" needs to be amended, and the conclusion has been reached that it does not. Given the regularity of the use of the expression on pay packets, it would be understood by the lay reader, while the fact that the contributions in question fall to be paid into the National Insurance Fund under section 162 of the Social Security Administration Act 1992 (c. 5) creates a sufficient of a link to statutory language that there should be no doubt in law as to what is covered.

  The expression "contributions to health care" is intended to cover financial contributions to caring for the health of those concerned, including payments of medical fees and paying towards insurance to cover medical fees if incurred.

2nd December 1997

previous page contents

House of Lords home page Parliament home page House of Commons home page search page enquiries

© Parliamentary copyright 1998
Prepared 14 January 1998