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Andrew George (St. Ives) (LD) rose—

Alun Michael: I will give way to the hon. Gentleman, then I must conclude.

Andrew George: The Minister will no doubt have noticed that under the Conservatives' proposals their changes in outsourcing the Rural Payments Agency will, according to the James review, be

Can the Minister reassure farmers who are anxious about late payment? Under the simplified system, if there is a late payment to farmers beyond 1 December this year, will farmers receive payments up-front where possible, and if it is not possible, will they be compensated for their loss of earnings as a result of delayed payment?

Alun Michael: Let me make it clear to the hon. Gentleman that we have said that we will pay as early as practicable within the payment window, which, as he knows, runs through to June of the following year. We want to bring the payments forward to the earliest possible point within the payment window. In the first year, that depends partly on the timing of information that comes from the European Commission. The hon. Gentleman, with his knowledge of the farming industry, knows full well how complex some of the delivery arrangements are. We try to make them as simple as possible for our farmers, but there are complications involved. The benefit will be our undertaking to make payments as early as possible within the payments window, which is not just for next year but for future years. We are in discussion with the industry, the banks and others to try to ensure that the situation is understood, and there is a promise to deliver. Farmers will know where they stand in the course of the coming months, well in advance of the December to June period. It is currently estimated that the payment will be made in February. It will be as early as we can possibly make it within the payment window, not only next year but in each successive year.

Of all the rural issues, I turn finally to one that has been much debated in this House—hunting with dogs. The Countryside Alliance, with Conservative Members following in its footsteps, has consistently misrepresented hunting as a town-versus-country issue, which it is not, and claimed that it shows that we are out of touch, which we are not. What I have said demonstrates the Government's achievements for the countryside. The facts speak for themselves.

Let me set out the main points of what is in truth a minor issue for rural communities. Members of Parliament, having voted 10 times in 10 years for a ban on hunting—

Mr. James Gray (North Wiltshire) (Con): The Minister seems to be fixated on hunting. Why is he
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talking about hunting when the motion does not refer to it, my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) did not mention it and it has not been raised at all during the debate? Why is he so fixated on banging on about it?

Alun Michael: Is the hon. Gentleman now embarrassed by his opposition to the Hunting Bill and his comments during its Second Reading? I turn to this issue particularly because Conservative Members have made a lot of song and dance about its impact on the rural economy. They have banged on about it time and again over many months. Indeed, the hon. Member for North Wiltshire (Mr. Gray) might like me to quote some of his comments. He said:

He went on to say:

He also said,

In recent days, we have seen a statement from the Countryside Alliance indicating that we should not expect to see such a removal of dogs. Therefore, there is no threat to the people who are employed in that activity. It is interesting to see how that has disappeared from the agenda of Conservative Members.

Having shot the fox of the hon. Member for North Wiltshire, clearly to his great embarrassment, I want to say that I am pleased that the debate has been on farming and rural communities. The priority is to make the best use of the money that is invested in agriculture to reform farming and give it a sustainable future. The problems will not be solved overnight but we are working on them with the industry, farmers and those who represent rural communities and business in our rural areas.

Farming remains at the heart of many communities, despite being only part of the rural picture. We must balance our priorities for farming, for those who live in rural communities and for the nation. That is the Government's commitment and we will continue to deliver it.

5.25 pm

Andrew George (St. Ives) (LD): I congratulate the hon. Member for South-East Cambridgeshire (Mr. Paice) on using precious time to debate an important subject that will affect many hon. Members. He raised some important issues in his presentation.

I agree with the hon. Gentleman about many matters but I was somewhat disappointed, given the fanfare of publicity with which the Conservative party announced the James review, that he failed to answer a question from my hon. Friend the Member for Somerton and Frome (Mr. Heath). He asked why, if the Conservative party was so concerned about red tape and cost to the industry, overhead No. 63 in the James committee's main proposals about the Department for Environment,
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Food and Rural Affairs stated that a Conservative Government would deliver the outsourcing of the Rural Payments Agency,

That will clearly be a cost to the industry.

Mr. Paice: Let me make it clear that that does not mean a charge on farmers, as the hon. Member for Somerton and Frome (Mr. Heath) implied. [Interruption.] I shall tell the Minister exactly where the money will come from. The outside agency will be paid a percentage of the total payment. At present, as the Minister knows, running the RPA costs 4 per cent. of the total payments. We believe that it can be done for half that amount. That money would go to the outside agency.

Andrew George: I am grateful for that clarification. If the charge is based on the company outsourcing, I am sure that farmers will be relieved. However, the proposal requires clarity. If we find from studying further Conservative announcements that that is genuinely the intention, we will welcome it.

Mr. Kidney: The hon. Gentleman is performing a great service, because we ought to get to the bottom of the matter. I do not believe that the hon. Member for South-East Cambridgeshire (Mr. Paice) has provided a reassurance that we should accept. There would be a saving only because the taxpayer would stop paying for running the RPA. It is neither here nor there whether the total running cost is 4 per cent. or 2 per cent.—a fraction of the amount of subsidies paid. The important question is who will foot the bill. The hon. Members for St. Ives (Andrew George) and for Somerton and Frome (Mr. Heath) discovered that the bill would pass to farmers, who will be flabbergasted by that, because the money would come out of their subsidy. They would get the money net of the payment instead of the total payment that they receive now.

Andrew George: I am worried that the reassurances that the hon. Member for South-East Cambridgeshire gave may unravel. That is why it is vital that the Conservatives make further clarifications and announcements. Perhaps they will try to clarify the issue further when winding up. At least they have taken on board the fact that there will be anxiety in the farming community if they propose such additional charges.

Mr. Paice: I think that the hon. Gentleman accepts what I said earlier: there is no intention that the payment for the outside agency would come from the payments made to farmers. It is simply a question of reducing the totality of the cost of running the Rural Payments Agency, and we would pay the outside agency a percentage of the total, which is exactly how the RPA is funded at present. Farmers will not pay.

Andrew George: The hon. Gentleman says that I accept his earlier explanation. Of course, I do not accept everything that he says, because he earlier claimed that the Liberal Democrats were not in Government. Of course, we are in Government in Scotland, where we are implementing common agricultural policy reform. The Agriculture Minister, Ross Finnie MSP, is highly
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thought of in the farming community, and his implementation this year of the single farm payment north of the border is going ahead very steadily indeed. So the rather cheap remarks made by the hon. Member for South-East Cambridgeshire earlier were quite misplaced. Given that he is defending himself in this way, I worry that he doth protest too much. Perhaps, later on, we shall find out exactly what the Conservatives are proposing. Farmers will be concerned that their proposals would involve top-slicing the payments due to farmers, and I hope that we shall receive further clarification on that as the debate proceeds.

We could spend time going over the Conservatives' pre-1997 record on farming, but it probably is not worth while doing so now. I have just put down a sheaf of papers containing reminders of BSE and of the fact that we have IACS forms twice as long as those of other European nations because the Conservatives were gold-plating directives in the UK. I hope to keep my contribution to the debate relatively short, because I know that many others wish to speak, and I want to cover issues relating to farming and to DEFRA's management of schemes. I also want to look at the impact of the power of supermarkets on the market—as the hon. Member for South-East Cambridgeshire rightly did—and to follow up some of the Minister's remarks on affordable housing in the countryside. These issues are all important to people living in rural communities and to those involved in farming.

I and others have expressed concern that DEFRA Ministers appear to act as managers, observers and bystanders in regard to what is happening in rural areas, and that whenever we want a clear vision of the Government's rural policy, we often find it out from Lord Haskins in another place. I am not alone in dubbing him the real Secretary of State, the one who is providing leadership and vision for the Department. However, when he comes out with controversial quotes such as

he rather undermines the Government's claim to be fighting for all farmers. It is inevitable that farms will get bigger over time, as they always have done, and that farmers will leave the industry, but the fact that that seems to be welcomed by the Government is a matter of concern to those involved in farming. Farmers have been leaving the industry at an astonishing rate, and since Labour came to power, they have been doing so at a higher rate than at any time since the second world war.

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