29 December 1995

Super-levy delays bring £5.8m penalty threat

By Tony McDougal and Shelley Wright

BRUSSELS is threatening to trim £5.8m from Britains budget allocation next year after the Intervention Board failed to collect the full milk super-levy fine for 1994/5.

IB officials admitted this week that they had only been able to pay just over £42m of the £48.1m owed to the European Commission by the extended deadline of the end of November. They blamed some dairy companies who had failed to pay their super-levy bills on time.

"Some of them dont believe the levy calculation was accurate, but if that was the case then perhaps they didnt give us the right data in the first place," said an IB spokesman.

Outstanding super-levy payments from up to 300 producers, totalling £2m, dating back to the last seven months of the Milk Marketing Board, have also not been collected in full.

The penalty, imposed by the European Commission, far outweighs the £4m recovered through the abolition of the discount milk scheme for secondary schools and school catering announced by farm minister Douglas Hogg in the Budget.

Labour agriculture spokesman Gavin Strang, who bitterly opposed the school milk cuts. said:

"It is quite unacceptable that the Intervention Board should have bungled the collection of this money. It is the British taxpayer who will have to pick up the bill at the end of the day."

"It is ironic that this could cost the taxpayer more than the government will save from its disgraceful decision to stop taking up the European money that helped to pay for milk in our secondary schools and for milk for school catering."

The IB is optimistic the money, plus interest, would be recovered and placed into the Exchequer by April 1996, enabling the European cash deduction to be halted.

Dairy companies, including Milk Marque, Unigate, MD Foods and the Milk Group, were quick to stress they had paid their bills in full and on time.

Milk Marque claimed it paid its super-levy bill of £19m by the original deadline date of Sept 1, 1995, but admitted there had been calculation problems.

A MM spokesman said: "We had many queries regarding leasing and transfer deals, particularly from members who leased in quota from farmers belonging to other dairy companies."

The IB claimed farmers found it difficult to convert direct sales quota into wholesale quota and make the correct butterfat adjustments.

David Rive, Residuary MMB secretary, said it had received a £2m additional super-levy bill concerning the Boards last seven months of trading (ending November 1994) from the IB in August, which it had hotly disputed.

Mr Rive said the queries centered on between 200-300 individual dairy farmers. "Every problem is slowly being resolved with the Intervention Board, but each seems to be taking an age.

"We have slowly whittled down the bill from £2m to around £300,000, which we are still disputing."

Similar problems face the successor body to the Northern Ireland Milk Marketing Board, United Dairy Farmers, but a spokesman was not available for comment.