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Rural Payments Agency

Volume 684: debated on Wednesday 5 July 2006

My right honourable friend the Secretary of State (David Miliband) has made the following Ministerial Statement.

In my Oral Statement of 22 June, I promised to keep the House informed of the Rural Payment Agency’s (RPA) progress in making payments under the 2005 single payment scheme (SPS). I can report now on the position at the end of the EU regulatory payment window on 30 June.

As in previous years, with the old CAP schemes, the total amount to be paid by the RPA under the 2005 SPS will not be known for certain until the last claim is completely validated. However, the latest estimateputs the figure at £1.515 billion, of which over£1.438 billion (94.9 per cent) was paid by 30 June. Some 91,720 claimants had received a full payment and a further 16,168 had received a partial payment and are awaiting their top-up. The combined total of 107,888 represents over 92 per cent of the revised estimated total claimant population entitled to a payment of 116,474, which now takes account of merged multiple claims from the same business and discounts duplicate claims, voluntary withdrawals and those where the claim was only to establish entitlements and not claim payment against them.

Of the estimated 8,500 claimants who have yet to receive a payment, approximately 460 have a claim value of more than €1,000. Some of these are in a category that it is not possible to pay at present because, for example the RPA is awaiting information from claimants. However, the majority require further action from the RPA and those cases will remain the agency's number one priority to resolve as quickly as possible.

Discussions are now under way with the devolved Administrations to determine whether, for the UK as a whole, sufficient payments have been made to avoid triggering the normal EU rules on withholding EU funding of payments after the end of the 30 June payment window. Those rules allow for 4 per cent of value payments made before the end of the window to be made after it with full EU funding. After that, a sliding scale of reductions applies, depending on timing, to payments after the 4 per cent threshold has been exhausted. The indications are that the UK is likely to have paid between 95 per cent and 96 per cent of payments by 30 June. If this is confirmed, we will, as previously indicated, have further discussions with the European Commission about the application of the payment reduction rules.

In the mean time, the RPA will continue to pay the remaining claims and progress work under the 2006 scheme in line with my 22 June Statement.