§ Lord Stoddart of Swindonasked Her Majesty's Government:
What is the penalty for not paying out Integrated Administration and Control System (IACS) subsidies in time; and whether any such penalty has been imposed on Her Majesty's Government for not paying 22WA out 17 per cent. of the IACS by the allotted date in December 1995.
Lord Lucas:IACS is the basis for payment under various CAP schemes including the Arable Area Payments Scheme (AAPS). Where a period for payment is laid down in the European Community regulations for a specific scheme, payments after the end of the period may he subject to a financial correction in the form of a reduction in the re-imbursement from the European Agricultural Guidance and Guarantee Fund of otherwise eligible expenditure. This reduction, which applies to late payments which exceed a margin allowed for difficult cases, increases for each month that the remaining payments are delayed. As only 83 per cent. of payments under the AAPS were paid by 31 December, the end of the period for main payments under the scheme, we expect that the Commission will make such a correction in due course.