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Agriculture: Hill Farm Allowance

Volume 707: debated on Monday 26 January 2009


Asked By

To ask Her Majesty’s Government how many farmers are affected by the overpayment of the hill farm allowance in 2006; and what is the scale of that overpayment.

My Lords, final figures for 2006 will not be known until work to confirm the existence and level of debt has been completed. However, it is expected that the exercise will affect between 1,000 and 2,000 farmers, with an overpayment value of between £1 million and £2 million.

My Lords, that really is a very unsatisfactory position. I am sure that the Minister will agree that the RPA payments system is appalling and its continuing incompetence is unacceptable. Has the RPA sent out letters to all farmers who were overpaid, and what information was given to those farmers about what overpayments were due?

My Lords, the noble Baroness is aware of the problems that the RPA has had, which led in the first place to what might be described as interim payments being made in relation to the hill farm allowance. Work is still being undertaken. I understand that stakeholders were notified last November that the overpayment process would begin. Work is now being undertaken and I understand that it will be completed in the next two months. Letters are likely to be sent out in March.

My Lords, I declare an interest: I am still waiting for any of our single payments for the year ending March 2008 from the Rural Payments Agency. Overpayment is a different matter. Does the Minister think it is easy for hill farmers, the most disadvantaged sector, to meet an unexpected demand to pay within 30 days? How does this compare with the treatment of other disastrous overpayments, such as those under the tax credit system?

My Lords, I think the overall performance of the RPA was behind the noble Lord’s first question; this House is well aware of the issues that have been faced in this area. On the SPS payments for 2008, 75 per cent, by value, of those payments should be made by the end of this month. I am aware of the pressures that hill farmers are under. I assure the House that repayments will be handled as sensitively as possible and that there will be a number of repayment options to make this as easy as possible for the hill farmers affected.

My Lords, can the Minister confirm that there will be a 30-day deadline for repayment of these sums? Is it not quite extraordinary that Defra has, on the one hand, presided over the failures of the RPA—the only outcome being that the Secretary of State, when a major failure took place, was promoted—while, on the other hand, it pursues farmers with these vigorous timescales?

My Lords, there will be a range of repayment options. The figure can be repaid over six months. Indeed, if there are particular hardship issues, it is possible that the repayment period could be lengthened. The debt has to be of £250 and above. As I have said, I understand the pressure and stress that many hill farmers are under. That is why we will take as sensitive an approach as possible. We will work with the NFU and other stakeholders to ensure that we are aware of all the issues. At the end of the day, this money has to be recovered.

My Lords, I am grateful for the Minister’s assurance that every effort will be made to match the repayment schedules to the needs of the individual farmers, but is he aware that particular farmers will not be able to access the uphill entry level stewardship scheme and will therefore lose that source of income and be further afflicted? I declare an interest as a trustee of the ARC-Addington Fund and ask that every attempt be made to keep the farm help charities informed so that we can in our turn be supportive of those who are most deleteriously affected.

My Lords, I thank the right reverend Prelate. I shall certainly ensure that my department is in touch with him and the relevant charities. I pay tribute to them for their work and for their support to farmers, particularly hill farmers, in what is a very difficult time.

On the transition from hill farm allowance to uplands ELS, I understand a number of the concerns. We have been in close discussions with organisations such as the NFU. However, we expect that if under the new system which comes into being in 2010 there is an 80 per cent uptake, the amount of money in the pool will be about £25 million, which is a little more than is available now under the hill farm allowance, and that if the uptake is more than 80 per cent, more resources will be available.

My Lords, does the Minister recollect the rule that money paid under a mistake of fact is normally recoverable at law, but that money paid under a mistake of law is not? Is it possible that some of these moneys were paid under a mistake of law rather than a mistake of fact?

My Lords, as ever, the noble Lord asks a very good question. He, along with other noble Lords, will know that when the SPS and hill farm allowance payments were started to be made by the Rural Payments Agency, the system came under considerable pressure, the targets were not met, and there was great concern that farmers were not receiving the resources that they were due. In view of that, the decision was taken to make what are best described as partial or interim payments, but it was always on the understanding that those payments would have at some stage to be reconciled with the rules under which they were given, as has now happened.

My Lords, if these are relatively modest sums owed by some of our poorest farmers, why can they not be repaid merely by being deducted from next year’s payments?

My Lords, that is one of the options. The hill farm allowance payments are due to go out in March this year. One option is for hill farmers to decide that the repayment should be taken off that allowance. There are a number of repayment options. I can assure the House that we will continue to talk with those who represent the interests of hill farmers. We will ensure that the matter is handled as sensitively as possible.

My Lords, the matter of the Rural Payments Agency has been inquired into thoroughly. Ministers have accepted their responsibility and apologised. As the Government said in response to the PAC’s report, the Permanent Secretary and senior members of the department involved in oversight of the delivery of the programme share some responsibility for the failures, but the department’s strong view is that accountability rests fundamentally with the then chief executive of the Rural Payments Agency. The organisation that he headed was responsible for delivery, and at no time did he say to the department that it was not possible to meet the objectives set.