Cunningham scoffs at Tory underspending claim

01 May 1998

Cunningham scoffs at Tory underspending claim

By Boyd Champness and Press Association

AN ANGRY Jack Cunningham, agriculture minister, has sent a scathing letter to shadow agriculture minister, Michael Jack, refuting his accusations that the Government underspent its 1997/98 agricultural budget by £139 million.

In the Commons yesterday, Mr Jack accused the Government of cheating struggling farmers by underspending last years budget.

In addition, Mr Jack claimed that the MAFF annual report reveals that the Government plans to underspend this years budget by a further £46 million.

“Dont you agree with me that farmers will see that as a rip-off and as your Ministry failing in its duty to support farming at a very difficult time indeed?” he asked.

Mr Jack demanded: “Will you look again at the spending situation for the financial year we are in, and ensure that we spend to the limit that you have inherited, to make certain that the help that we have left to farmers can actually reach them?”

But Dr Cunningham dismissed the claims as “absolute, total rubbish”.

He told Mr Jack: “Your are comparing estimates, you are referring to intervention board expenditure, not to MAFFs budget – that is just yet another indication of your total failure to grasp the reality of what is going on.”

Immediately after question time, Dr Cunningham drafted a letter to Mr Jack claiming that his accusations in the Commons were “wholly inaccurate” and “based on a series of misunderstandings.”

In the letter, Dr Cunningham maintains that the excess money relates to the Intervention Boards budget, not MAFFs.

“The £139m represents the difference between the Boards early estimate of UK expenditure on CAP market support measures in 1997/98, and the final out-turn for the year,” says the letter.

“It is simply wrong to suggest that it represents money that was in some way held back from farmers. That is because expenditure on CAP market support is, as you should well know, demand-determined, and any differences between actual expenditure and earlier estimates are simply not available to me as Minister to re-allocate to other programmes.

Dr Cunningham also dismissed the shadow ministers claims that the Government plans to underspend the 1998/99 budget by a further £46m.

“This is again wholly incorrect. Your figure appears to have been derived from a comparison of CAP-related expenditure estimates for 1998/99 which appeared in the MAFF/Intervention Board Departmental Reports for 1997 and 1998. It is therefore no more than an estimating change. With an entire year separating the estimates it is hardly surprising that there is a difference. My Department is not forecasting any underspend on its budget for 1998/99,” he wrote.

“Both of your claims therefore amount to a complete misrepresentation of the facts, and display an astonishing ignorance of the basic principles of Government accounting. Indeed, this is all the more astonishing in view of your own experience as both an Agriculture and Treasury Minister under the previous administration.”

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