Common Agricultural Policy: Single Farm Payment

11:14:00

Lord De Mauley
asked Her Majesty’s Government:

How much money the Department for Environment, Food and Rural Affairs has asked HM Treasury to set aside for the possible European Commission fine which may be required for the late payment of the 2005 single farm payment.

The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker)
My Lords, Defra has not requested any additional funding from Her Majesty's Treasury to cover potential disallowances in respect of late payments made to farmers under the single farm payment scheme for 2005.

Lord De Mauley
My Lords, I thank the Minister for his Answer and I declare an interest as one of those still awaiting his modest 2005 single farm payment. Will he respond to reports in this week’s press that, in addition to a fine of up to £305 million, the total bill for the Government’s inept handling of the payments will include costs of £156 million for fixing the failures of the RPA and £21 million in interest payments to farmers, so totalling nearly £500 million? Is this not yet another example—like the Olympics, where they forgot about VAT—of the Government’s complete incompetence in organising the nation’s finances and their arrogance in dealing with taxpayers’ money?

Lord Rooker
No, my Lords; I do not accept the noble Lord’s figures. We have not paid and are not liable for anything like £21 million in interest payments to farmers. We have paid just under £1 million in interest payments; it cannot be much more than that because there is not much left to pay. On the other figures, we have made a provisional allowance in case there are fines and penalties but, in cash terms, no programmes have been affected. There have not been any fines or penalties from the European Union and we have had no indication from it of any such figures. But we have prudently taken that action because we know that we have made some payments late and could be subject to a penalty two or three years down the road. We will argue against any penalties. As of 30 June last year we had paid within 1 per cent of the legal limit—96.14 per cent of the money—and this year we are paying out a lot more a lot earlier. But the noble Lord’s figures cannot be added up. There are difficulties here and I make no bones about it. It has cost a lot more because of the difficulties in implementing the scheme, and that is much to be regretted.

Lord Dykes
My Lords, I thank the Minister for previously facing up straightforwardly to the crisis on the detailed financial figures. None the less, this is an unprecedented shambles. Let us bear in mind the Commons Select Committee report and its comments about responsibility. In 1997, this Government promised transparency and direct accountability and responsibility by Ministers. Is there any other option for Margaret Beckett after this but to resign?

Lord Rooker
My Lords, I am not commenting on anything in the Select Committee report. The Government will produce a response to it in due course. Matters concerning Ministers are for the Prime Minister; matters concerning civil servants are for the head of the Civil Service. It is as simple as that. I am responsible for the RPA from 8 May last year and the fact is that I do not know—I was not at the meetings when all the decisions were taken. I freely admit that if David Miliband and I could have done we would have torn up the whole system and started again, but that is not possible. I would not want to give anybody the wrong impression. This year will in some ways be as difficult as if not worse than last year, although so far we have been more successful in paying out money earlier.

Lord Dubs
My Lords, will my noble friend say a little more about the progress that has been made since 2005, looking into the future in dealing with these payments?

Lord Rooker
My Lords, first, I want to make it clear that the RPA staff—the 3,000 people in the five offices, all of whom I shall visit next week for the second time—are not responsible for this. They have worked their socks off to try and work this scheme in the interests of the public and the professional civil servants and to get the money to farmers. As for this year’s payments, as of yesterday—28 March—we have made payments to 96,476 out of 109,000 farmers, which is 88 per cent; 60 per cent of all farmers have had the full payment while 28 per cent have had a partial payment. The value of money paid out so far is just over £1 billion out of £1.54 billion, so we have paid out 70 per cent of the money this year, although I freely admit that it will be extremely difficult from now to the target at the end of June. The system is not geared up for that, even with all the changes in working practices that we have made. I believe that at this time last year something less than £50 million had been paid out.

The Lord Bishop of Exeter
My Lords, recently there has been a move from a task-based approach to a whole-case working approach to dealing with single farm payment claims, which is much to be welcomed. But is the Minister aware that there is a real concern that some of those whole-case workers are relatively inexperienced, often in their first posts, and that there continues to be a lack of transparency and co-ordination between the registration teams, the mapping teams, the processors and the legal department, making it extremely unlikely that difficult cases will have an individual allocated to them? What is being done to ensure that front-line RPA staff have appropriate training and adequate management support in securing the effective and co-ordinated delivery that farmers have a right to and deserve?

Lord Rooker
My Lords, the right reverend Prelate is right that the new chief executive of the new management team has put processes in place. About a dozen people are on the teams dealing with the cases on a whole-case approach and will have the necessary experience; the training started last summer when I was visiting the RPA offices. But I do not think that we can judge this only on the basis of age and inexperience as the staff sometimes have to deal with incorrectly filled-in forms—this is not all one-sided. But as the commissioner mentioned when I shared a platform with her earlier this week, the forms are excessively complicated, and that is something that we have to deal with. As we get closer to the difficult claims—as I say, we have paid out to 85 per cent of farmers—individuals will have to be assigned to individual cases. That is crucial. But the situation will be a lot better than it was last year when an individual farmer’s application could have been dealt with at the same time in any one or all five of the RPA offices.

Earl Ferrers
My Lords, is not the real problem that a bad system was chosen, a system which was different from that in Northern Ireland, Wales and Scotland? Whoever chose the system really ought to take responsibility for it. Is it not a bad thing when the system chosen results in farmers not getting their money and possibly in fines as well? Somebody really ought to resign.

Lord Rooker
My Lords, when this system is stable—it will not be until at least 2008—it could be a lot better than that in Scotland, Wales and Northern Ireland. A year was lost in the implementation of the planning. Anyone who reads the paperwork will see that a year was lost but that the start date stayed the same. Forty thousand new claims came in including some that the department had never dealt with before, such as those for pony paddocks. Food had never been grown on that land and there was never a Common Market subsidy for it. The paddocks were unknown and none of that land had been mapped. There was a catastrophic drop in productivity because the system was not geared up for that. The de minimis at 0.3 of an acre is far too small and we will address that in the health check of the CAP reforms which the commissioner has agreed to. There are some difficulties. It is easy to comment with hindsight—I was not there, although I have read some of the papers—but, as I say, we are trying to do better than we have in the past.