Sunday Telegraph/Notebook 16 January

Booker's Notebook

A flurry of court cases in recent days has highlighted the horrifying treatment by the Department of the Environment, Food and Rural Affairs of 350 contractors claiming more than £100 million owed for work carried out on ministry instructions during the 2001 foot and mouth epidemic. Terrified that it may lose £1 billion due to Britain from Brussels, Defra has tried to appease the European Commission by finding every excuse not to hand over the money, owed to firms on which it relied through the crisis to build pyres, move carcases and disinfect farms. But now it seems the courts have finally called Defra's bluff on a campaign of intimidation which has been actively supported by ministers - while the UK government may well lose the £1 billion it wishes to claim from Brussels anyway.

On Friday the new 'Technology and Construction Court' ruled that JDM Accord should be paid £5 million it has been owed since 2001 for constructing a vast £7 million burial pit at Ash Moor, Devon, which was never used (and which it cost taxpayers a further £3 million to fill in). Days earlier, a Devon farmer Michael Pedrick, 63, who lost his entire farm stock during the crisis, was cleared at Exeter of trying to cheat Defra out of £17,000, after the ministry spent more than £100,000 trying to convict him. He said afterwards that he and his family had been 'put through hell' by Defra's officials.

Another 62-year old Devon farmer, Ted Haste, was due to appear last Monday on criminal charges of deceiving the old Ministry of Agriculture, Fisheries and Food by wrongly claiming compensation in an invoice he was instructed to submit by Maff officials. At the last minute, after what Mr Haste described as two years of 'living nightmare', Defra abandoned its case and told Mr Haste he was now free to continue his claim.

Hundreds of contractors still have claims outstanding, including Robert Pugh of Montgomeryshire, still owed £500,000 by Defra after its officials spent two years quibbling over sums as small as 35p. The small Devon contracting firm run by Luke Furse and his wife Suzanne gave such efficient assistance to Maff in building more than 40 funeral pyres that at one time they were employing 400 people. Despite being supplied with 750,000 documents, recording in detail every action the firm took under MAFF's instruction, many counter-signed by MAFF officials, Defra has conducted such a remorseless campaign of prevarication and intimidation that the firm is still owed £1.2 million.

During the crisis Maff seemed under no constraint in the reckless way in which it threw money at signing up contractors to help. Difficulties over payment only became serious after Brussels questioned the scale of Maff's expenditure, and indicated its reluctance to hand over £1.2 billion due to the UK government under EU law.

Only when many of the contractors' cases were taken on by the Forum of Private Business did it emerge that Defra was using a common strategy to justify non-payment, such as refusing to pay for meal breaks and travel time. Many of the same devices were used against JDM, in the 12-week case which came to judgement last Friday, when the court ruled they were illegal and in breach of contract.

Publicly ministers, led by Margaret Beckett and Alun Michael, admit they have spent £20 million investigating the hundreds of cases still outstanding, to save, they claim, £80 million. Of 1200 cases investigated, the National Audit Office last year found that only 18 involved fraud, non proven and most now abandoned. But the real disgrace of this affair is that, despite Defra's shameless efforts to convince Brussels that it has been looking after taxpayers' interests, the European Commission has not yet shown any sign of being impressed. It has capped the UK's right to claim repayment at a mere £250 million, leaving £1 billion outstanding - a sum it seems the UK government may now never be in a position to claim.