Examination of Witnesses (Questions
40-59)
WEDNESDAY 6 MARCH 2002
MR BRIAN
BENDER CB, MR
JOHNSTON MCNEILL
AND MR
HUGH MACKINNON
40. How do they compare with any other department's
forms, like the Benefits Agency?
(Mr McNeill) Again, I am sorry, I have never drawn
a comparison. I am sorry.
41. Okay. Can I just clarify about following
up tip-offs. How many tip-offs do you get a year?
(Mr McNeill) On what used to be the Intervention Board
fraud line we get something like 2,500 tip-offs.
42. Do you investigate them all?
(Mr McNeill) Certainly we take every one of them seriously,
yes.
43. With respect, that was not what I asked.
(Mr McNeill) There are different levels of investigation.
There is an initial investigation which is almost desk top based
to check what the basis might be. There is then perhaps a visit
by an inspector again, one of the 400 inspectors we have. Then,
depending what they find from both those exercises, there may
well be criminal investigations. Our experience is—with
a view to prosecution—about 15 per cent of the 2,500 result
in investigations which may result in action being taken in the
courts.
44. I think it may be helpful if you give us
a note outlining the various levels of that.
(Mr McNeill) Yes.[3]
45. Do you pay incentives for anybody providing
a tip-off which results in the saving of public money?
(Mr MacKinnon) No, we do not.
46. Have you considered that?
(Mr MacKinnon) We have not, no.
47. Why not?
(Mr MacKinnon) There has never been an obvious need
to do so. Mr McNeill has already said that the fraud line run
by the Intervention Board was well used and in the areas we would
expect it to be used.
48. You assume there is not a need to do so.
Again, have you ever taken experience from, say, the Benefits
Agency where they discovered, as I understand it, providing incentives
did actually result in more reports coming forward which resulted
in the saving of public money? Surely you must be aware of that.
(Mr MacKinnon) No, I am not.
(Mr McNeill) The Rural Payments Agency was launched
on 16 October and we are very happy to consider that way ahead.
49. If I had not raised it with you now are
you seriously saying to me that you probably would never have
thought of it?
(Mr McNeill) No, I am saying it is early days for
the Agency which launched on 16th October. We have had an extremely
difficult year with foot and mouth disease etc. We are addressing
many issues relating to what the end game ought to look like,
that could be one of them, we will take it on board.
50. That is not an unreasonable point for yourself
but not necessarily for the department. The department has been
here before foot and mouth and with joined up Government I would
have thought surely you must have heard that other departments
were offering incentives?
(Mr Bender) I was aware they were. I was not aware
the department or the IB had not considered it in the past. I
suspect there are differences between behaviours in farming communities
and behaviours in urban communities or rural communities as far
as benefits. That is a suspicion but, I agree, it is something
we should look into.
51. Would you just clarify for me what those
differences are then between farmers and people in urban and rural
communities?
(Mr Bender) My suspicion is that there is less sympathy
in the rural community for a farmer who is being fraudulent but
that is a suspicion and I accept your point, Mr Davidson, that
this is an issue we should look into in dialogue with other departments.
52. So you think people in my community, which
is an urban one, are basically sympathetic to people committing
benefit fraud?
(Mr Bender) I do not know.
53. You have just said that they are likely
to be less sympathetic in rural areas.
(Mr Bender) I withdraw the comment.
54. Very wise actually I think. The fact that
you do not have clear views on this does tend to indicate to me
that you really have not explored this question of fraud. Were
you aware of the statements made by the judge at the time when
Mr Bowden was sentenced to jail? Were any of you aware of the
statements of the judge?
(Mr Bender) Yes, at the time.
55. In particularly his statement that "when
one hears the extent to which the Common Agricultural Policy is
used for cheating, one despairs". That sounds a bit harsh,
does it not? It does tend to make you believe that there is a
fair amount of this going on if a judge spots it and judges, while
they lead relatively sheltered lives, presumably are relatively
aware of what is going on in rural areas. You seem to be astonishingly
complacent about fraud.
(Mr Bender) I apologise if that is the impression
I am giving. I, and colleagues in the RPA, am not complacent about
it. There are clearly lessons in relation to what other departments
do that we need to follow up but we are absolutely not complacent
about it and if I have given that impression, I should not have
done.
56. How many prosecutions have you had in the
last few years?
(Mr McNeill) There are two approaches to penalising
farmers who make applications which are either not correct and
fall under the heading of irregularity, which is really the agricultural
schemes, where we can take administrative action which results
in substantial fines, perhaps even no payments whatsoever followed
by up to three years of no payments. In that case criminal prosecution
may not be appropriate. On what used to be the Intervention Board
side of the house, the trader schemes, etc., they would tend to
be more focused on criminal prosecutions because that administrative
process does not exist under those schemes. If you want to talk
about the number in the UK, as the Permanent Secretary mentioned
earlier, 393 cases in 2000 which meant that we were actually deducting
in excess of £2,500 and in some cases substantially more
than that.
57. Each?
(Mr McNeill) That is each, yes. That is a total of
£12 million in administrative deductions for the year 2000.
We did not take criminal prosecutions in those cases because there
is a process within the IACS regulations which enables us to impose
administrative penalties.
58. Can I just clarify that. If somebody loses
£2,500, say, is that of the same ratio as Mr Bowden when
you recovered £1,000-odd and he got away with something like
£144,000, or is that £2,500 because he has cheated on
100? I am not quite sure of the scale of this. Can you just clarify
for me whether or not any of these people are named and shamed?
Will I be able to identify somewhere a list of all these farmers
who have been cheating the system?
(Mr McNeill) Certainly where there are successful
criminal prosecutions we publicise those.
59. The administrative penalties?
(Mr McNeill) We are taking a view, again, with the
new agency as to how we manage that. We feel there should be perhaps
some form of quarterly report noting what level of administrative
action has been taken.
3 Ev 26, Appendix 1; and Ev 30, Appendix 1, Annex A. Back
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