Memorandum by the Ministry of Agriculture, Fisheries
1997 (S.I. 1997/2673)
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
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
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