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House of Commons Hansard
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Rural Payments Agency: Basic Payment Scheme
24 March 2015
Volume 594

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(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the Government’s failure to deliver a digital-only system for processing the basic payment scheme via the Rural Payments Agency, and what assurances she can give to UK farmers that the failure will not result in significant delays to the receipt of their basic payment?

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I am grateful for this opportunity to update the House. This is the first year of the new basic payment scheme. As the new common agricultural policy is so complex, we needed to invest in a new computer system to administer claims; the existing single payment scheme computer system would not have been able to cope. The new system included a core, which was there to process data and which was based on an existing system used in other countries, and a portal that enabled farmers to register their details and to map land passes.

The core of the new rural payment system is working well. To date, more than 80% of farm businesses in England have registered successfully on it, so they can submit a BPS claim. We continue to engage and encourage farm businesses to register online as soon as possible. However, there have been performance issues with the online interface that enables farmers to input the data directly, especially when it comes to mapping land passes. We have been working to address those issues since February. Our priority has always been to ensure that farmers can submit their claims by the deadline. That is why we have made adjustments to our plans. The RPA is now offering farmers and their agents the option of using existing paper-based forms to finalise their claims. Information from those forms will then be input by the RPA on to the system.

There are two new ways in which farmers can complete their claims. Farm businesses with little change to their land will be fast-tracked by the RPA. In particular, those who predominantly have permanent pasture will not need to map those details. They will receive an e-mail in April that summarises the land and entitlement information already held on record, together with simple instructions on completing their claim by e-mail. The RPA has identified approximately 39,000 farmers who fall into that category.

Secondly, farm businesses that need to map new features can use blank existing forms to prepare their claims before they are sent a pre-populated form in early April. They can submit their claim by e-mail, by post, or through an RPA drop-in centre, and we have 50 of those now established. Separately, all agents will have received maps of their clients’ land from the RPA by the end of next week. Those dealing with the most complex cases will be offered additional support. The RPA is also exploring the option of giving some agents direct access to the system so that they can make applications quickly.

This is a pragmatic response that applies to the application process in 2015. It means that we will be able to make payments to farmers when the payment window opens in December 2015. All data entered so far on the rural payment scheme system have been saved and will be used by the RPA to complete farmers’ claims this year.

In addition, a number of other EU countries have had difficulties in getting their IT systems in place this year to process this first year of a new, more complicated CAP. In parallel, the Commission has offered an option to member states, allowing them to extend to 15 June the deadline for basic payment scheme applications. That was discussed on 16 March in a Council meeting, which I attended, and it was confirmed by the Commission on 19 March.

In conclusion, the core of the new system works and we are not abandoning anything. We will continue to use it and it will enable claims to be processed efficiently this year and will be the basis for service improvements in future years. However, the action that we announced last week will ensure that farmers can submit their applications successfully this year, and it has been welcomed by stakeholders and those in the industry.

Given the imminence of the general election, I am keen that we communicate with the Opposition on this issue and keep them in touch. I have written to the hon. Member for Garston and Halewood (Maria Eagle) explaining the current situation in detail, and, as she knows, I have offered to meet her, with Mark Grimshaw, to discuss the matter further. Our offices are in discussion about a date for that meeting, which I intend to happen this week. I am also more than happy to keep Opposition Front-Bench Members updated on the changes in the weeks ahead.

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Many farmers will be depending on the basic payment scheme to keep their business afloat and on prompt payment to maintain vital cash flow. Given the seriousness of this matter, I am astounded that the Under-Secretary of State has been sent to this House to deal with it. Where is the Secretary of State? As well as refusing to answer questions on BBC’s “Farming Today”, she now appears to be running away from her duties to this House. Let us hope that the Select Committee has better luck getting her to appear tomorrow.

The disastrous late admission from Ministers that the mapping functionality of the Government’s digital by default system for making payments to farmers does not work is a serious blow to hard-working farmers, not least because the Secretary of State said on 11 March, in evidence to the Environment, Food and Rural Affairs Committee:

“The maps are up and running.”

We have all heard rumours for weeks, but the Government have blithely continued, heads in the sand, to insist that everything will work. As recently as 12 March, at the last DEFRA oral questions, the Under-Secretary of State was saying that his only plan was to make the system work; there was no contingency. As a consequence, many farmers who have endured incredible frustration trying to use the system to map the land, or have paid agents to do it for them, now face having to do it all again on paper, and at one of the busiest times of the farming year. How frustrating and wasteful of time and hard-earned money.

Will the Under-Secretary of State please tell the House why Ministers have repeatedly given assurances that the system works which have turned out not to be accurate? Will those farmers who have paid agents to make their claims online be compensated for now having to pay them again to submit the same information? It has previously been insisted that the scheme is too complex for paper. Now we have reverted to paper, so is there an increased risk of errors, which could result in penalties? Will the hon. Gentleman give an assurance that in future farmers will be able to access and use the information they have already submitted, or will they be forced to start again?

On Saturday, Mark Grimshaw, the chief executive of the Rural Payments Agency, referred to the fact that the EU payment window is open until the end of June. He said:

“I am absolutely confident that we will pay within the payment window.”

For farmers expecting their payments in December, that is far from reassuring. It is disastrous. Will the one-month delay in the deadline for applications cause a delay in payments? Mr Grimshaw has said:

“It will be foolhardy of me to commit to anything in December”.

What does the Minister expect farmers to do for cash flow while they wait for their cheques?

When did Ministers first hear that the digital by default system they chose to insist upon would not work? Why did they not implement contingency arrangements sooner, to save farmers the time and expense now wasted? How much money has been wasted? Finally, can the Under-Secretary of State assure the House that Ministers will now remove their heads from the sand, rise above the chaos and confusion their incompetence has caused, and come clean to the House: will the mapping functionality ever work, or will it need to be completely replaced?

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I will begin by reminding the Opposition of their own record on the Rural Payments Agency. Let us not forget that in 2005, the system they introduced led to £600 million of disallowance for this country. Payments were regularly more than a year late—hardly any farmers ever received their payments on time. It took a Conservative-led Government coming to power in 2010 to sort it out.

The hon. Lady asks whether everything will have to be resubmitted on paper. As I made clear in my opening statement, for those farmers who have managed to enter their mapping details, the information has been recorded; they will not need to start again. She says that we have always maintained that the new CAP is too complex to be processed on paper alone and needs a computer. That remains the position. As I said in my opening statement, that is why we will still use the core of the system to process the data. We have, for example, coefficients on the areas farmers have of broad beans, leguminous vegetables, hedges and so on. It is complex, and that is why we are not removing a digital approach, but simply having RPA officers enter the information on behalf of the farmer. This is not a paper-only system; it is a paper-assisted system.

The hon. Lady said that Mr Grimshaw, the chief executive of the RPA, had said that he could not give guarantees about the payment window. Having worked with Mr Grimshaw for 18 months, I can say that he is cautious and he never gives guarantees. In all the time I have known him he has never said anything other than that we will make our payments within the payment window. In the past couple of years well over 95% of farmers have been paid on the first day of banking and paid early. I am confident, as I said, that once we have the information in and it has been processed, we will have a system in place that can deal with it.

The hon. Lady mentioned contingency plans. We have adapted our plans and acted to ensure that farmers can get their applications in time this year. That is the responsible thing to do. It would have been wrong to abandon the system and prematurely abandon attempts to sort out the portal, particularly the part that deals with land mapping. We have acted in time to ensure that farmers can get their applications in place, and the steps that we have taken have been welcomed by the farming industry.

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I pay tribute to my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), who carried out fantastic work in turning around the mess that he inherited in the Department and sorting this out. Will my hon. Friend help me with one detail? The mapping that we are talking about is often very detailed—an electric fence here, a bit of undergrowth there. Would it be possible to pay farmers on account as partial payment this year, with the amounts being adjusted in subsequent years’ payments?

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Provided an application is received by the deadline, there is provision in the EU regulations for it to be amended for a period of weeks after that. My hon. Friend’s suggestion of a payment on account while an application has not been received would not fit within the EU regulations, but we have made progress in getting that deadline extended to 15 June, and I have asked the RPA to take a sympathetic view towards farmers who are struggling to get their application in and who may want to amend those details after their form has been submitted.

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When the Paymaster General boasted to the public services 2030 conference just 20 days ago that under this Administration the words “Government” and “IT” no longer induce visions of failed IT projects, is it safe to assume that he did not know about this situation?

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As I pointed out, we have not abandoned anything. The core of the system is working and will still be used. What we are doing is ensuring that the information provided, in many cases on paper, to the RPA will be entered by digitisers working for the RPA, but it will still go into an electronic system.

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Does my hon. Friend regret the Department saying that there was no need for a contingency plan? Will he reassure the House that there cannot be a digital-only system where farmers do not have access to broadband? What are the Government doing to speed up the situation for farmers living in areas with less than 20% and sometimes less than 40% coverage by broadband to ensure that the core system will work next year, as we were assured by the RPA in the Select Committee that the system had been tried and tested across the European Union? Will he confirm that the extension has been agreed for payments to be entered by 15 June?

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I hope that my hon. Friend will understand that our plans have always been adaptable. We have always had the ability to change plans and our priority is to ensure that every farmer can get their application in by the deadline. That is why we announced what we did last week. It is not necessary to announce one’s contingency plans until one is ready to use them. That does not mean that we had not thought about this and that we did not have the ability to keep those plans adaptable.

On my hon. Friend’s wider point about an internet-only or digital-only application, we have 50 digital support centres that will help farmers to do this, and we are setting up help centres in farmers markets and everywhere we can to ensure that they are able to get their application in on time. We have ensured as well that the system can work at relatively low broadband speeds, so I believe we have addressed the issues that she raised, but in the short term farmers can submit their application this year in paper-based form.

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Why is it that every time this Government mess things up they send a junior Minister to the Dispatch Box—the Secretary of State is nowhere to be seen—to blame someone else? I happen to be an avid fan of the BBC’s “Farming Today”—almost as avid a fan as I am of Clare Balding’s “Ramblings”, as those who follow me on Twitter will know—and the fact is that had “Farming Today” not exposed the deep concern in the farming community about this mess, we would not have had this urgent question today.

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That is simply not true. We made our decision when we realised that a software update the weekend before last had not worked as we had hoped. It had nothing to do with any media coverage; the media have told us nothing that we were not already aware of. The Secretary of State and I work as a team, so I am here today and she will be appearing before the Environment, Food and Rural Affairs Committee tomorrow. We have been working closely together on this and both regularly meet the RPA to discuss these challenges.

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I remind my hon. Friend that until the coalition Government sorted out earlier problems at the RPA, I was having to deal with hundreds of cases of farmers in my constituency who were affected and to make representations on their behalf. Has he noted the fact that we will soon be in a six-week election period during which none of us, whether or not we are standing for re-election, will have the status of a Member of Parliament, so he is likely to receive representations during that period from extremely worried farmers?

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The right hon. Gentleman will be aware that although we will all cease to be Members of Parliament next Monday, I will remain the farming Minister and the Secretary of State will remain the Secretary of State until a new Government are formed, and I can reassure him that I will be having regular telephone conferences with the RPA and attending meetings to discuss and monitor the situation. We will keep a very close eye on this indeed.

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I assume that departmental officials produced a risk assessment for Ministers when the move to this system was proposed, so can the Minister today advise the House on what he thinks are the projected costs to be incurred by DEFRA and the RPA, and indeed by farmers and landholders, as a result of this mess?

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It is a matter of record that the project is intended to cost in the region of £154 million. All such projects are monitored by the Major Projects Authority within the Cabinet Office.

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The important thing is that farmers can submit their claims on time and that the Government have rightly taken action to enable them to do so. In learning the lessons, will my hon. Friend recall that a decade ago only 15% of farmers were being paid on time by the Rural Payments Agency? Under this Government, that figure is now 98%, so he should take no lessons from the Labour party.

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My right hon. Friend is absolutely right; the Labour party, when in government, allowed chaos to continue year after year. We have acted swiftly to ensure that farmers can get their applications in on time this year.

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Obviously there are difficulties with payments across the whole United Kingdom of Great Britain and Northern Ireland. Has the Minister had an opportunity to discuss these matters with his counterpart in the Northern Ireland Assembly, for example, and what discussions has he had with the farming unions, which might be able to indicate the best way to ensure that payments are made on time?

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On the latter point, all farming unions and representatives and agricultural consultants have welcomed the steps we have taken, because they want to ensure that they can get their applications in on time. I discussed the matter with some colleagues from the devolved Administrations at the European Council last week, and I can confirm that they are all relieved that the Commission has extended the deadline.

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Can my hon. Friend reassure farmers in the remote parts of my constituency by confirming that they will get the support they need, whether on paper or through access to online services, to avoid the disaster they faced under the system introduced by the previous Government?

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As my hon. Friend says, we have acted swiftly to ensure that we can send maps and paper applications to ensure that all farmers can get their applications in on time. We have a network of 50 digital support centres to help farmers with the registration process, because we still want them to register with the online system.

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Amid all the arguments, is it not simply vital to recognise that the important thing is that farmers get the money that is due to them when they need it? Echoing the words of my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), there is the consolatory thought that that will allow broadband roll-out to catch up.

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As my right hon. Friend knows, this Government have spent over £700 million on rural broadband, and we are still looking at other options to reach the remaining 5% who still need it. He makes a good point. The focus for me this year is to ensure that farmers can get their applications in on time, which is why we have taken action. Unlike the Labour party, which let chaos continue for years, we acted swiftly to ensure that we could deal with the problem as soon as it was identified.

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I welcome the extension of the deadline to 15 June. However, bearing in mind that too often deadlines are not met, can the Minister reassure me that our farmers will not be fined if they do not meet the deadline and that, whatever happens, the situation will be resolved before anyone talks about being fined, or of the country being fined, and will the European Union fine us if we do not meet certain deadlines?

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As my hon. Friend might know, the deadline of 15 May is written in EU regulations and the Commission has agreed to extend it to 15 June. Under the regulations, farmers are given a period of 21 days during which a late application can be accepted. Until last week it was not clear whether the Commission would agree to an extension, although it had indicated that it might, so our plans were made on the basis that we would be aiming to meet the deadline of 15 May. Having that additional month gives us some more leeway, which is obviously welcome.

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Does the Minister agree that the over-complicated CAP system demonstrates that this can affect all member states in a very detrimental way? Is that something that we should be renegotiating as part of our new deal with the European Union?

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My hon. Friend makes a good point. We are already in discussions with Commissioner Hogan about the interpretation of existing regulations for next year to ensure that we can get some simplification. In the mid-term review we will be pressing for further simplification of the greening rules. For the new CAP, which will take effect post 2020, we are already looking at radical reform to make it simpler and make more common sense.

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I draw the House’s attention to my entry in the Register of Members’ Financial Interests. Farmers understand better than anybody that things can go wrong, but what they cannot tolerate is damage to their business. Can the Minister give me a categorical assurance that if mistakes are made on these forms, the farmers will be corrected, not punished?

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I have had that conversation with the RPA. One of my jobs as farming Minister is to sign off some of the appeals that reach the final process, and I can tell my hon. Friend that I am very challenging on those and have asked the RPA to adopt the most sympathetic approach possible. All information that farmers provide on paper will ultimately be entered by digitisers working for the RPA, and they will carry out checks to ensure that the forms they are entering reflect what farmers intended to put on them.

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I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I congratulate the Minister on taking decisive action and avoiding the disaster that the previous Government oversaw in 2006-07, when only 15% of farmers were paid on time. I congratulate him on listening to the National Farmers Union, the Country Land and Business Association and other groups that have made representations and on making sure that we find a system that operates and allows farmers to be paid.

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My hon. Friend makes a good point; the Labour party did not grip the problems with the RPA, so there was over £600 million of disallowance and farmers were often paid over a year late—as he said, only 15% were paid on time.

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I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I, too, congratulate my hon. Friend the Minister. At least farmers now have certainty and know that they can apply and that they will receive their payments, but can he give an utmost assurance that he will do everything he can to ensure that this delay in applications will not result in any delay in payments?

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Yes, I can give my hon. Friend that assurance. We will be seeking to ensure that the claims are processed as quickly as possible and paid as speedily as we have demonstrated our ability to do in recent years.

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As the Minister knows, all that farmers in my constituency want is to get their application in on time and to get paid on time so that they can get on with running their business. Is he concerned about errors made this year and the ensuing penalties that we have heard about from other Members? Will farmers still be able to use the online system, or just agents, given that not all farmers have the use of agents?

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We are giving some of the larger agents, representing just short of 20,000 farmers, access to the online system. We will not be able to give that access to all agents because of the training required and the time scale needed to enable them to use it. All farmers must still register online, and they will be able to download maps. Those who have simple claims will be able to sign a declaration to say that their land use has not changed and is still simple, such as permanent pasture. I take on board my hon. Friend’s point about errors. As I said, I have been pressing the RPA to take the most generous possible interpretation of the EU regulations. The regulations are clear that where an error is not the farmer’s fault, no penalty can be levelled against them.

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Before he steps down from the House very shortly, I join colleagues in paying tribute to the work of my neighbour, my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), not only for his work in clearing up the mess that we inherited with the RPA but his wider work on behalf of farmers.

My hon. Friend mentioned the 15 digital centres that are going to provide assistance. Will he update the House on what additional resource allocation will be put in place to help with the bureaucracy and the difficult conversations that farmers may have with helplines?

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Yes. We have started to treat these digital centres as drop-in centres so that farmers can drop in on them without an appointment. During this crucial period, we are redeploying staff from DEFRA to the RPA to ensure that the helpline and the digital support centres are fully manned and have the capacity to cope with anything thrown at them.