First, yes, I am embarrassed and dismayed by the issue of the newsletter to which the hon. Gentleman referred. There is no doubt that when it was produced we were on track, payments were being produced on the date that we had been told20 Februaryand validations were being issued to farmers, just as had been foreseen. It was anticipated, and continually reported to Ministers, that once that process had begun it would be speedily ramped up. Of course, that was the part that was not fulfilled.
I cannot give the hon. Gentleman answers on time lines and dates at the moment, but I assure him that I will keep Front Benchers and the House as informed as I can with reliable information. I am sure that the whole House will recognise the strong wish of the new acting chief executive not to be pinned down to proposals for the future until he has more information, because he does not wish to repeat what he views as previous over-promise and underperformance. The hon. Gentleman will know, as will the House, that the payment window ends at the end of June 2006, but I cannot give him a pattern of payment between then and now.
The hon. Gentleman asked about non-validated interim payments. We are looking at that whole issue. We are not ruling out the potential for interim payments, but we are reluctant to make interim payments if there is any possibility of their jeopardising the time scale for making full payments. I think that the whole House will understand that, and understand, too, our wish to keep the rest of the scheme on track.
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The hon. Gentleman said that the situation was obvious to all. I genuinely think that he was quite unjust to my noble Friend Lord Bach, who has spent not just hours but days working on this over many, many months. [Interruption.] I say to the hon. Gentleman, and to the House, that when the scheme was initially being considered and the arrangements were being put in place, a substantial contingency of time was of course built in to allow for any hiccups and difficulties. Over time, that contingency was gradually whittled away. My noble Friend has maintained the closest possible interest, and I, like him, continue to reject any charge that there was complacency on the part of Ministers. Ministers are dependent, as is everyone in the House, on the information that they are given and the confidence that they can place in it. [Interruption.] I simply repeat to the hon. Gentleman what the proposal to us was. We published this more than a year ago; I cannot now recall exactly when, but it was a long time ago. The proposal to us was that the first payments would begin to flow in the week of 20 February, and they did. It was after that that the scheme began to break down.
There were repeated challenges by Ministers, and repeated demands for harder information about the number of payments that had been made. As a result of those challenges and demands the chief executive conveyed to me, on the evening of Tuesday 15 March, that he could no longer say that the bulk of payments would be made by the end of Marchalthough he continued to insist that 96 per cent. would be made in the payment window, by the end of June. That is why we took the steps that I outlined. We will continue to keep hon. Members and the industry as fully informed as possible, and I anticipate a further report on the situation later this week.
Chris Huhne (Eastleigh) (LD): The Secretary of State talks about using up margins of contingency, but surely there is no way of describing the matter other than as a botched introduction of the single farm payment scheme in England. That is worrying for many tens of thousands of farmers who rely on the payments for their cash flow, and for maintaining their obligations.
I have no doubt that there were problems at the Rural Payments Agency of which Ministers were not aware. There can be no other explanation for the extraordinary contrast between the assurances of the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for South Dorset (Jim Knight), at Question Time on 9 March and the sacking of the RPA chief executive only a week later. However, DEFRA Ministers must take their share of the blame.
First, Scotland and Wales have almost finished payments on the simpler historic basis, yet DEFRA Ministers decided to implement the more fancy scheme and they must surely bear responsibility. Do they accept that their decision to abandon the historic basis of payment has been a major cause of the difficulties in England in comparison with the relative success in Scotland and Wales?
Secondly, the new scheme could have been introduced with a delay, as happened in the Netherlands. Do Ministers accept that they made a mistake in trying to run before they could walk?
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Thirdly, do Ministers accept that the scheme's implementation has been botched from the start, and that the evidence for that is not only in the delays that farmers are now suffering in the payments that they were promised but in the spiralling costfrom £18.1 million to £37. 4 million, as revealed by the Select Committeeof the IT system procured for the single farm payments?
The Secretary of State has given no assurances about the timing of the payments that are due. We must press her for assurances for farmers who expected the bulk of the payments to be made by the end of March about when they will be made. If she cannot give them, will Ministers authorise interim payments so that farm businesses can maintain their obligations to their suppliers and creditors? Will Ministers assure us that they have contacted the principal lending institutions to the farming community and accepted full responsibility for any delays in farmers' payments that may arise through DEFRA's broken promises?
Margaret Beckett: The hon. Gentleman drew on the experience of Scotland and Wales, and he is right to say that they have adopted a different systemalthough initially they made partial payments, and I am not certain whether Scotland is yet making full payments. Wales has begun to do that. However, those systems are not only different but involve a much smaller number of claimants. The hon. Gentleman described the scheme that we introduced in England as "more fancy"; a more accurate term would be "more sustainable".
The hon. Gentleman spoke as if it would always be better to pursue the historic system. He is new to the portfolio and will not therefore have the subject at the front of his mind, but under the historic system, people continue, now and for the future, to be paid on the basis of what was received by someone farming the same land between 2000 and 2002. That appeared to be neither beneficial in driving farming forward to be receptive to the market, nor something with which taxpayers or farmers would be content for long. There are already rumblings in member states that have maintained the historic system about how unsatisfactory it is. This is not, therefore, a simple black-and-white question of why we did not do what it is claimed would be easier.
The hon. Gentleman made a further point, and I was not sure whether it was based on information from the Select Committee report. If it was, I regret that. There is a misunderstanding that the cost of the information technology system is somehow evidence of things going wrong. The RPA was already set to undergo a programme to provide it with new IT. That was the £18 million scheme that was initially intended to be put in place. However, that was agreed before the common agricultural policy reform proposals, which obviously resulted in the need not only for a new IT system but for one that would perform a different task. That is why there is a difference, and the two sums involved are not comparable. We are not talking about twice the money for the same scheme changes.
The hon. Gentleman also asked about interim payments. I can only repeat what I said earlier to the hon. Member for South-East Cambridgeshire (Mr. Paice), which is that we continue to keep that matter under review. I shall not be drawn into making forecasts, other than to draw attention to the scale of the payment window. The hon. Member for South-East Cambridgeshire referred to
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the speech that I made to the National Farmers Union annual conference, at which I said that payments had begun to flow on 20 Februaryas they hadand that I had been advised that, very shortly, some £350 million would already have flowed.
When I saw the chief executive of the RPA on the evening of 14 March, however, he told me that only about £60 million had been paid by that date. That was the first intimation that DEFRA Ministers had had that those were the figures involved. However, that sum was disbursed over about three and a half weeks. In the period since that datejust over a week of payment dayssome £75 million has already been disbursed. That is obviously not enough, but it is certainly a big improvement on the previous figures.