Draft Intervention Board for Agricultural Produce (Abolition) Regulations 2001 and Draft National Assembly for Wales (Transfer of Functions) Order 2001

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Mr. Colin Breed (South-East Cornwall): I, too, welcome you to the chair, Mr. Hancock. I agree with a great deal of what the hon. Member for Mid-Norfolk has said. Those of us who have worked in rural areas in the past six or seven months are only too familiar with the problems associated with the Intervention Board. I suspect that many farmers and others in rural areas will rejoice at the news that the board is to go, but they will be more interested in what will take its place and whether it will perform more efficiently, effectively and—most importantly—promptly. Will the Government use targets and performance reviews to ensure that it is more efficient? We need to know that the new organisation is not just a change of name but a real change in the way in which payments are made.

In addition to the new technology, will further changes such as streamlining be introduced to ensure efficiency? How will we ensure that the new agency is not merely a gloss on the old culture, and that performance will be totally transformed? That is an important issue. Many hon. Members and constituents have carried out what might be termed telephone orienteering: going from pillar to post, only to find ourselves virtually back at the beginning, having achieved nothing. We must ensure that the agency is responsive to its clients and to Members of Parliament who are trying to get to the bottom of their constituents' problems.

Cash is vital to businesses, which rarely fail for any reason other than a lack of it. Often, it is only the patience and forbearance of bank managers that have prevented some of our farmers—perfectly good business men who remain in control of perfectly good businesses—from going out of business. Their livelihoods have been jeopardised by the non-receipt of cash. As the hon. Member for Mid-Norfolk said, in some cases the payments that we are discussing constitute the largest amount of money that farmers receive in an entire year. In anticipation of such payments, they borrow money, on which they pay significant interest. Ensuring that they receive those payments is a cause of stress, and we must be confident that payments will be made when they are due.

How will the common agricultural policy rules be interpreted, particularly in respect of the integrated administration and control system? Many rules that we have to implement seem to be interpreted strictly and harshly. I accept entirely that we cannot allow fraudulent claims, but it is clear that in many cases a complex procedure involving complex forms has led to errors and the prevention of payment. Indeed, in some cases clawbacks have been required.

On accountability, who will ultimately be responsible? We have had the arm's-length agency, but where exactly will the buck stop when things do not go right? Under the current system, that has been impossible to determine. It seems that everyone is able to pass on responsibility to someone else.

Reference has been made to farmers moving to an electronic system. It is true that some larger concerns are able to engage computer-literate staff who are fully able to use the new technology and make electronic claims. However, they are not the overwhelming majority. There has been some training, but I hope that it will be recognised that some people might never be able to achieve that level of confidence. In an electronic system, payment depends on ensuring that one clicks one's mouse on precisely the right box at the right time. If an incorrect entry is accidentally made, one's entire business can be jeopardised. It is a lack of confidence in the ability to enter such information correctly that prevents many people from moving to an electronic system.

Does the new RPA signal the introduction of an appeals system that will give farmers who feel that they have been wrongly dealt with by DEFRA or the RPA an opportunity to have their cases looked at dispassionately to ensure that justice is being done in terms of the non-receipt of payments or clawbacks?

What is the single point of contact? Is it merely two electronic terminals? Are we going to do away entirely with the beneficial system of face-to-face meeting? That worked extremely well for both the client and the old MAFF, or new DEFRA, and gave farmers an opportunity to speak directly so that they received the correct information. The measure could entail a considerable number of redundancies, in rural areas where jobs are already difficult to obtain. I hope that every opportunity will be given to affected staff to ensure that they can find alternative employment.

Finally, I welcome the transfer of the functions to the National Assembly for Wales and hope that that will provide a benchmark of the way in which the payment systems around the devolved assemblies are performing so that they can compete to be the most efficient in the UK.

5.1 pm

Mr. Adrian Flook (Taunton): When doing research into what was the Intervention Board and will be the RPA, I went to speak to farmers in my constituency. I did not have to speak to them very long before finding out what a shambles they consider the board to be. Sadly, changing the board's name will probably do for the RPA what changing MAFF's name has done for the reputation of DEFRA. I do not feel that there will be too much change.

My hon. Friend the Member for Mid-Norfolk said that confidence has been a victim of the worst crisis in agriculture in recent years, but late payments have not been the only cause. One of the farmers I spoke to, Mrs. Taylor, made the immediate comment that the Intervention Board has been extremely pedantic and picked up on every point. I shall give a small example of the way in which the board—I fear that the RPA will not be any different—has mismanaged situations.

Mr. and Mrs. Taylor have a new herdsman called Graham, who started in June. Mrs. Taylor correctly sent off all the forms, of which there were many, to the Intervention Board. When Graham signed for a cow that had badly damaged its hip and was to be dispatched under the over-30-months scheme, the vet who signed that order effectively confirmed Graham's identity, but the board responded by saying that it did not recognise his signature. Mrs. Taylor responded by sending back a copy of the original forms, but the board insisted that new forms be filled in. That is the sort of mad bureaucracy that is not helpful in rebuilding the confidence of our farming community.

It is not just that the farmers must fill in the forms by the due date. Will the existing system change under the RPA so that it responds by the dates that it says it will respond by? Late payments have been extremely bad news in terms of controlling cash flows, as the hon. Member for South-East Cornwall (Mr. Breed) said. Another farmer in my constituency had only 28 cows under the casualty cow scheme for 2000, which would have given him an extra £17, on top of the over-30-months scheme. For some reason—he still does not know what it is—the board disallowed six of those requests for 28 extra cows. After six months, he gave up arguing about the 102 quid. Having officials at various offices up and down the country—which relates to the pillar-to-post point—arguing over £102 is not exactly the best way of running a £3 billion budget or a Department.

I have four concerns. First, access to officials on the scheme, although better than before, is still poor. By reducing the number of officers from 11 to five, will the service still allow farmers to maintain eye-to-eye contact, which is on the way out? Secondly, farmers are being dragged from pillar to post, so does the Minister accept that form filling is out of control and will the Rural Payments Agency be responsive to its clients rather than, as it seemed under the Intervention Board, responsible only to itself?

Thirdly, will we see the end of the ``never concede'' mentality of some officials, which bears no resemblance to the quantum of disagreement, and when will they achieve a sense of reality? Fourthly, there is an increasing fear that, by incorrectly filling out forms, unjustified penalties will be imposed on farmers. What measures will the Minister hand down to civil servants in DEFRA to ensure that front-line officials give farmers renewed confidence in dealing with the welcome successor to the Intervention Board?

5.6 pm

Mr. Morley: I will deal first with the points raised by the hon. Member for Mid-Norfolk. The Government recognise the difficulties that agriculture has experienced, and we have made additional resources available to the sector to assist it. However, agriculture must be restructured in different areas and ways, and it does not do the sector any service to try to duck those issues. Farmers appreciate truth and honesty about the changes that are coming, which is what we as a Government have tried to give.

I accept that we must cut bureaucracy. The Select Committee welcomed the proposed change, and we welcomed its views on the subject. I acknowledge that payments have on occasions been late, which inconveniences farmers, and trying to improve the system is one principle behind the changes. To be fair, forms were sometimes submitted late to the former regional service centres, and we must also look to improve on that situation with access to new technology.

I concede that employing a new system that centres on major new technology involves a risk. We all know what has gone wrong in the past with Home Office and Ministry of Defence computer systems. With many sophisticated systems, promises made by suppliers have not been delivered after installation. DEFRA is aware that, at one point, one could get a pet passport more quickly than an ordinary passport. The lessons have been learned.

By coincidence, I had a meeting today with people involved with the new system. They assured me that the proposed system for the new payments agency does not use particularly new technology. One problem with a new computer system is that, if we move into something completely new and the specification consistently changes, the risk of its going wrong and there being delays is much greater. The technology is proven, and I understand that development progress is on target for the phased changeover. An enormous amount of work is being done to examine potential problems. That includes talking to people who have been involved in previous disasters to find out why those systems went wrong, what the problems were and how we can ensure that they do not happen again. I have been assured that all those issues are in hand and that the new agency is focusing on what the systems are meant to deliver. If one is clear about that, installation and delivery become much easier.

I accept that electronic interfaces are an issue. Funds available from the English rural development programme for training within the agricultural sector could be used to train people in the use of information technology and the internet. There are already voluntary industry schemes, and there is potential for DEFRA support through the ERDP on a regional basis. Of course, farms range from multi-million-pound organisations that are well geared up and well equipped, to small, part-time operations. Some farmers are isolated and have no experience of information technology. We can play a role in dealing with that.

I assure hon. Members that accountability is not a problem: in fact, it seems that DEFRA Ministers are held accountable for matters that are not even their responsibility. The Secretary of State will be accountable for the operation of the Rural Payments Agency. As well, the chief executive of the agency can be called before the Public Accounts Committee, and the permanent secretary at DEFRA will remain the accounting officer in respect of financial accountability. The lines of accountability are clear.

The hon. Member for South-East Cornwall asked several questions. Service delivery targets that outline what the new agency must achieve, and how, have been established. An industry forum has been set up to involve the industry in determining how we can improve the service, and that is an important part of the new agency's operation.

I accept the hon. Gentleman's comments about penalties, but many EU schemes leave us little room for manoeuvre. We are examining the issue of appeals and, in the near future, will consult the industry about an appeals procedure that we can put in place where it is appropriate to do so, leaving us some flexibility. We take that seriously.

A high proportion of farming businesses already have access to the internet. Given the nature of communications, every farm should have such access. I know that it is easy to say that and that there are practical difficulties, but we might be able to assist with that. The DEFRA website and others are major sources of information for the farming industry. E-forms are not only a simpler, faster and cheaper way to submit IACS forms—I have seen some of the trial schemes running in the Norfolk area; the hon. Member for Mid-Norfolk may have seen them as well—but the software for such forms can be designed so that obvious mistakes are immediately picked up. As well, details such as name and holding number—common mistakes in form filling—are inserted automatically. Thus, bureaucracy and some simple mistakes can actually be reduced through the programming and software design. That will help farmers and will result in fewer mistakes.

I assure the hon. Member for Taunton (Mr. Flook) that farmers will continue to have the opportunity for face-to-face contact at all the sites, certainly within the transitional period until 2004. There will also be helplines for farmers who wish to ring up and speak to someone. We realise the importance of training for our staff and the need to take into account the effect of the changes on them. When I recently attended one of our regional service centres, I spoke to the trade unions about the forthcoming changes. While I was there I noticed an advice facility to help those looking for other career opportunities. Some of the job losses affect areas such as Reading and Cambridge, which have high demand for staff and strong employment prospects.

Although we are reducing staff numbers in the Rural Payments Agency, other sectors of DEFRA are increasing—the agri-environment programmes, for example. The national scrapie programme is also taking on staff in Worcester, so there are opportunities for jobs within the organisational structure. I am confident that we can minimise the impact on our staff, which is an important consideration.

The hon. Member for Taunton should not prejudge the outcome of these changes. The system is not yet fully up and running, but a great deal of work has been put into getting it right and industry groups have been involved from the beginning. It is all about improving services. I accept that there is an enormous amount of form filling in the agriculture sector at present, but much of it is bound up with claims for subsidies. When public money is involved, there has to be accountability and cross-checking. The challenge is to reduce the bureaucracy without reducing the accountability. Ideally, we could move away from production subsidies and set farmers free to make their own commercial decisions. That is part of the long-term changes to common agricultural policy reform, which have been outlined many times.

Reasonable and helpful issues have been raised, but the Government are aware of and are addressing them. In the end it is not only about greater efficiency and cost-saving in Government structures, important though they are, but about improving the standard of service to the people who rely on us. That is our principal consideration: providing people with a better service than they have had in the past.

5.17 pm

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