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Rural Payments Agency

Part of Oral Answers to Questions — Communities and Local Government – in the House of Commons at 3:33 pm on 7th November 2006.

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Photo of David Miliband David Miliband Secretary of State, Department for Environment, Food and Rural Affairs 3:33 pm, 7th November 2006

Let me go through the eight or nine points that the hon. Gentleman made. I am sure that we are completely united on two things. The first is that none of us underestimates the problems or hardships involved. Secondly, about a third of the way through his questions, he asked whether farmers were entitled to full payment. Of course they are entitled to full payment, and it is the Government's job to deliver it to them in an efficient and timely way.

I fear that the hon. Gentleman is labouring under a misapprehension about the £131 million referred to in the National Audit Office report; he suggested that it was somehow responsible for, or related to, cash cuts. We are using what is referred to, in Government budgeting, as a non-cash provision, which means that the Government are making allowance for future claims on the sum. It is designed to be a prudent provision, and it precedes the normal audit work done by the European Union. There has been no such demand for £131 million, and I do not think that it is in the interests of hon. Members on either side of the House to talk up the potential for penalties further down the road. I assure the hon. Gentleman that the £131 million referred to in the NAO report is not related to the £200 million deficit with which the Department for Environment, Food and Rural Affairs is working.

The hon. Gentleman asked why I described the96.14 per cent. target as challenging. I did so because the chief executive of the Rural Payments Agency reported to me that there was no chance at all of the RPA's delivering full payments to all farmers by the date proposed. The hon. Gentleman is right that, as I have said on many occasions in the House, 96.14 per cent. is the minimum level below which late payment penalties are incurred. He asked about Ireland and France, and they, of course, are paying 50 per cent.

The hon. Gentleman asked why we are not paying80 per cent. I referred in my statement to the importance of the EU regulations on the subject. He will know that over the past 10 or 15 years, hon. Members on both sides of the House have thought it important that the EU should have proper regulation for the disbursement of EU moneys, especially in relation to the common agricultural policy; we have been arguing for that. I am sure that he does not want to query the provision of that level of rigour.

The reason for specifying 80 per cent. this year is that when the Agriculture Council discussed the issue in 2003, and considered the first year of the new scheme, which is 2005, the Commission said clearly that it would regard 2005 a transitional, exceptional year—a year in which it would be flexible about how partial payments were made. We used that flexibility to deal with the circumstances that arose last May, which all of us wish had not come about. The reason for the 50 per cent. target is that that reflects the EU regulations, to which I think hon. Members on both sides of the House are committed.

The hon. Gentleman asked about starting the payments in mid-February. The advice from the RPA is that it will take the agency about three weeks to deliver all the payments. He asked whether mid-February plus three weeks means payment by mid-March at the latest; that is a calculation that I and others can make, and we are happy to confirm that that is the advice from the RPA.

Finally, I assure the hon. Gentleman that nothing in my statement was meant as a "boast" about the performance of the RPA or the Department, and I would certainly be surprised if that is how it came over. The blow to farmers has, of course, been the most serious result of the failures of the RPA, but there is also the blow to the reputation of the Department, and it is very important to put things right as effectively as possible. However, I must tell the hon. Gentleman that farmers have said to me, time and again, that the most important thing about this scheme year—the 2006 scheme year—is that they are not given promises that are not delivered on. That is why I put such stress on timeliness, and on the confidence of the RPA's chief executive; when he says that partial payments can be delivered in February, he knows that they can. I hope that farmers will recognise that it is right that we should proceed step by step, secure in the knowledge that each step is a safe step. That is better than raising their hopes only to dash them later.


Stuart Parr
Posted on 8 Nov 2006 3:13 pm (Report this annotation)

The "EU monies" being disbursed are English taxes anyway. We should be able to spend our own money any way we like and if EU regulations are preventing us from doing so then it's time to leave the EU and take control of our own country again.

The Scots and Welsh haven't had the same problem because their governments don't have the luxury of foreign voters who are unaffected by their actions to keep them in power unlike the British government that can bankrupt as many English farmers as it likes safe in the knowledge that Scottish votes will keep them in power.