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This has been a tragic event for the farming community. The farming business has lost about £20 million but, more importantly, it has lost what little
confidence it had in DEFRA. If agriculture is to be successful in future, the Department responsible for it and the business itself must find a better way to combine and work together.
I want to ask the Minister a question along the same lines as that posed by my hon. Friend the Member for North-West Leicestershire. Does he have any plans to bring forward the payments during the payment window? If not, English farmers will simply look at other countries and the other devolved nations in the United Kingdom and see themselves as second best, because they do not get the same service as others do.
I would also like to ask the Minister a question about inspections. In the implementation of the single payment scheme, inspections are important in ensuring that cross-compliance is observed by the applicants, but they are often not well planned. There is frequent duplication, and they place huge regulatory burdens on farming businesses. Will the Minister impress upon DEFRA, the Rural Payments Agency and the Environment Agency the need to co-ordinate their inspection plans more closely, to ensure that, when two inspections can be carried out at the same time, that happens, so that duplication does not occur and farmers feel that the inspections are being carried out with a light but sound touch?
The Government’s report, “Vision for the Common Agricultural Policy”, was brought out in what seemed to be rather a rush during the UK’s presidency of the European Union. In order to achieve a budget agreement, people were talking in fairly strong terms about reform of the CAP, but when the Prime Minister went to look in the cupboard, there was no work on the shelf and there was no report. This document has the hallmark of work that has been done fairly rapidly and without the necessary research.
The common agricultural policy has evolved over the years from the time of the treaty of Rome, when it was built on intervention, through the MacSharry reforms that brought in quotas for breeding animals and for payments for particular crops. I am sure that most right hon. and hon. Members here today will agree that in 2003, under the cloak of a mid-term review, we saw the fundamental implementation of the single farm payment, along with the decoupling. During that period, there have also been reductions in the export subsidies that do so much to distort world trade and such great harm to third-world countries. Export subsidies should be eliminated by 2013. It was the agreement between France and Germany that the common agricultural budget should be maintained to 2013 that led to the agreement on the single farm payment.
The document produced by DEFRA and the Treasury lacks the political nous that should have been present for it to be taken through the European Union. As the right hon. Member for Fylde said, it seems extremely difficult to get this kind of reform through the agriculture Ministries in France and Germany. Perhaps President Sarkozy will have a different frame of mind from that of President Chirac. I think President Chirac was the only one who understood the European agricultural policy, and that was probably because he wrote it.
The movement of funds from pillar one to pillar two is broadly agreed by all hon. Members.
Mr. Jack: The hon. Gentleman refers to the effectiveness of the document, but the only measurable effect was a reduction in the money going to pillar two. Was that a good result?
Mr. Williams: The right hon. Gentleman makes a good point. There was indeed a reduction in pillar two expenditure in that budget. Given that the Prime Minister of this country believed in reducing pillar two expenditure, it seemed a strange result.
The document is not explicit about the effect on the structure of British agriculture or the sustainability of UK businesses. With a huge reduction in pillar one expenditure, I sometimes wonder whether any agricultural businesses will be present to deliver the pillar two objectives of conservation and recreation. The hon. Member for Totnes (Mr. Steen), who is no longer in his place, made a point about the difficulty of conserving upland areas using pastoral management methods of the past. He wondered how the people who enjoy those areas could continue to enjoy them if there were no farmers in the area. The “Vision” document certainly does not address that issue in any way.
The document also fails to address the issue of food security, which it seems to imply is not a major issue to be taken into consideration. Given that the world population is about 6 billion, with 600 million either under-nourished or underfed, and that by 2050 it will have increased to 9 billion, food security is clearly a big issue—not just for this country, but for the world. We should ensure that all areas of agricultural land, here and throughout the world, are put to their fullest use in order to ensure that 9 billion people are well fed and well nourished in 2050. There are real threats to that, including climate change, political instability and the demand for energy crops. A new organisation known as the commercial farmers association has produced a pamphlet promoting food security for the future. It does not argue for supporting British farming through protectionism. Rather, it argues that farming in this country should be supported by research promoting a good balance between output and conservation.
I believe that the “Vision” document was short-sighted and does not merit support. It failed to look to the future of farming either in this country or the wider world.
8.38 pm
Mr. David Drew (Stroud) (Lab/Co-op): I am delighted to follow my fellow members of the Select Committee, who are clearly dominating the debate so far. That is understandable, in as much as we have not had many opportunities to debate agriculture in recent times. It is interesting to note that two reports are coming along at the same time. I cannot do justice to both reports, which are detailed and critical, but I hope that the Government will reflect on them carefully. If they do not respond in print, I hope that they will do so in other ways and thereby try to point us in the right direction. I do not want to go over the same ground as my colleagues, so I shall try to keep my remarks brief and slightly different from those previously expressed in our interesting discussion. I hope that there will be plenty of time for reflection on the debate itself and on subsequent developments.
I would like to start with the report on the Rural Payments Agency. The words “disaster”, “debacle” or even worse could be applied. I believe that the fundamental mistake was trying to bolt together the dynamic hybrid. Discussing the scheme with my hon. Friend the Member for North-West Leicestershire (David Taylor), I described it as a camel sent into the desert with no sign of an oasis. It was a difficult concept and, notwithstanding all that has been said by those on the official side, no one has yet identified its genesis to my satisfaction. There was no consultation on it and certainly no consensus behind it, and not surprisingly it bombed. It is of course possible that in due course it will be seen to possess some logic, and that other nations will follow us. In fact the Germans did adopt a similar route, but as was pointed out by the Chairman of the Committee, the right hon. Member for Fylde (Mr. Jack), they were better able to deal with the practicalities than we were, and we failed to learn from their example.
It was a mistake to move to an area-based payment system while also trying, for a number of years, to retain an historic system. It was inevitable that that would raise questions about what could be described as the wedding-cake principle. If more people demanded slices from the wedding cake, the slices were bound to be thinner, and some would not be given even a crumb of comfort.
That returns me to the fundamental criticism that I have advanced throughout our debates in the Chamber and the Select Committee. I believe that it should have been established at the outset which people were farmers and would be entitled to participate in the single payment scheme. That was never clearly spelled out, and the Government appeared somewhat taken aback when 50 per cent. more people than they had accounted for claimed entitlement. Five per cent., 10 per cent. or even 20 per cent. would have been understandable.
I still begrudge, and will continue to begrudge, the money that should be going to farmers and is going to others who are not farmers, do not need it, but are able to draw it because of the crackpot way in which we introduced the system. That has made the position even more complex and has prevented genuine farmers from receiving money, which is unacceptable. I hope that the Government will consider a de minimis, because the very small sums that have been received have snarled up the system.
I will not say much about the management of the agency and the IT systems, because Members on both sides of the House have already made plain that both were deficient. However, as the right hon. Member for Fylde pointed out, it would have been helpful if the Government had listened to the points that we made during the run-up to the agency’s establishment. They were not criticisms at that stage—they were useful points—but they were ignored, and the Government paid the price. Many of us spent a great deal of time trying to bring about a sensible, positive understanding of what was happening, but Ministers pushed our suggestions aside and pooh-poohed our competence to make them.
Sir Peter Soulsby:
My hon. Friend made a telling point about the failure to predict the number of applications, but does he not agree that by the time the Committee
was issuing warnings the number was known, and that even at that stage the Government did not listen to the alarm bells that we were ringing?
Mr. Drew: Once it became clear that the number of eligible people had been drastically under-calculated, we quickly pointed out what some of the repercussions would be. Even at that stage, Ministers, if not officials, were to a certain extent living in denial. Our criticism should have been dwelled on rather than pushed away, which, sadly, is what happened.
Mr. Dunne: Was not one of the Committee’s warnings to do with the mapping system and the fact that many mapping errors arose as a result of using a two-dimensional mapping system rather than a three-dimensional one? In many areas, particularly along the Welsh marches which are well known for having three-dimensional fields, that has given rise to many foreseeable errors.
Mr. Drew: I am not sure that I can answer that in practical terms, but it seemed to me that the system was sometimes fifth dimensional, as there were so many errors. It was particularly galling that when it got things right, it subsequently returned to them and got them wrong. There was no consistency in the information; it was a case of garbage in, garbage out. Sadly, even when the information was initially right, it was subsequently screwed up, which was completely unacceptable and led to people having no confidence in what was done. I could go into considerable detail on that matter; in fact, we did so, and the people who briefed us explained what the problems were—but, sadly, the solutions were more difficult to identify.
There was not much vision in the other document even though it was called “Vision for the Common Agricultural Policy”. We swiftly identified that it appeared to have been produced not by the Department for Environment, Food and Rural Affairs, but by the Treasury. Therefore, it was strong on economics but weak on societal and cultural aspirations, which should be central in moving from a common agricultural system to, we hope, a common rural policy. It was, at best, a fudge.
It was interesting that the Government again said that they had listened to, and reflected on, the views of many in the farming community. We attended the Royal show last year. It must have been better than this year’s Royal show as we had sunshine; I am thankful that we did not visit it this year as we would have had to have worn our Wellington boots. We took evidence from ordinary farmers, and that was interesting as they expressed thoughtful opinions on what should be our future agricultural policy.
We addressed in the report whether it was possible to have a common agricultural policy. I have doubts about whether a common policy can exist, and certainly about whether it can do so in a European Union of its current size—although I cannot complain about that as I supported enlargement. We addressed points of analysis and dissection, rather than of underlying philosophy. I am sure that my hon. Friend the Member for Luton, North (Kelvin Hopkins) has trenchant criticisms to make of the whole concept of the common agricultural policy, and I share them. However, the Committee looked at how we might move to a different system—how we might move from pillar one to pillar two.
A key problem was that we led that charge alone. Although other nations might speak the language of wanting to move away from production subsidies, when push comes to shove and their politicians are faced with the question of whether to defend the important franchise of the farming community—it is less important in our country than in some others—many of them fall back on defending the production subsidy system. Sadly, too many other nations take that position, and until they change their underlying opinions the common agricultural policy will be a dead duck, and the sooner we fry it the better.
The document was short on vision and did not say where the Government wanted to go, even though—to be fair to them—they had gone much further than other countries, as I have already said. The document did not make us feel as if we knew where we were going. As the hon. Member for Brecon and Radnorshire (Mr. Williams) said, it would have been good to have looked in much more detail at food security issues. As it is a historic document, things have moved on and we now have to face up to non-food crops and the implications they have for the rural economy. There were various issues that needed to be embraced and the weakness of the document was that it did not look to the future. It looked to the immediate problems that British farming faces, but we wanted to stretch out from that so that we could provide leadership to the rest of the EU. That was lacking, and therefore we missed a real opportunity.
8.51 pm
Mr. Mark Todd (South Derbyshire) (Lab): I shall concentrate on the first of the two reports, partly because my period of service on the Committee coincided with the start of the change programme that is commented on. I can recall both the interview of Johnston McNeill by the Committee and the discussion of the initial stages of the change programme. Indeed, the Chairman of the Committee recalled some of my expressions of scepticism about what was being attempted and whether that particular gentleman was the right choice to lead such a programme.
The episode under consideration was undoubtedly one of the most woeful episodes in both business change and system development of the last decade. It has a lot of competitors, unfortunately, but it is certainly in the top two or three, if not actually top. Some hon. Members may not know this, but before I became a Member of Parliament I was an IT director, so in the words of my hon. Friend the Member for North-West Leicestershire (David Taylor) I am the person with one eye among those who are blind on some of these topics. My experience is out of date, because we are 10 years on, but I do have some broad knowledge of leading large system and business change programmes. Occasionally, I try to share that with the House, although not always with a great deal of effect.
What I learned about this programme was a shocking level of risk analysis, which permitted a complex and extremely challenging change programme for the administration of any rural payments scheme. At the start of the process, in 2001-02, we did not know what lay ahead, but we started on a process of major change in the way in which payments of any kind would be made to the farming community, and we combined that with the introduction of wholly new
methodologies for payment. Even the most primitive of analyses would have highlighted the hazards. I shall list only those that struck me from looking at the issue. They included locational change, substantial down-sizing of personnel and layers of system development. Probably from the start in 2001-02 through to the end, there must have been at least three system development programmes of various kinds to build systems that worked in delivering payments to farmers. Change was laid on change; when a decision was made on the process, there were further changes.
There was also an extraordinary programme of inclusion, which my hon. Friend the Member for Stroud (Mr. Drew) mentioned. One landowner did not make a claim; I own five acres of Derbyshire and was told by my farming friends that I should make a claim under the system. I am delighted to say that I did not; that was one claim that did not clog up the system, but it illustrates how ridiculous the design was. I hold five acres, which I occasionally graze—I make a mess of it generally—and it has a footpath through it. Why in heaven’s name should I expect a few hundred quid from DEFRA towards it? Yet that invitation was sent to everyone and I am afraid that not everyone was as self-denying as me. Not surprisingly, the system was clogged with tiny claims that must have cost far more to process than the sum paid out.
Jonathan Shaw: I understand my hon. Friend’s frustration. He has saved the Department some money by not claiming. However, I am advised that the EU definition of a farmer includes simply keeping land in good agricultural and environmental condition.
Mr. Todd: Indeed so, and all member states grappled with the dilemma of how to deal with rather small holdings of an inactive nature. They did not attempt to handle those claims in exactly the same way. As I recall, there was a de minimis approach, which would have made it possible— [ Interruption. ] I am seeing lots of nods, including, I think, from the Minister himself. That would have simplified the process and I would have commended that. It might not have prevented people from making a claim, but it would have made it much simpler to deal with them.
Faced will all those layers of risk, the most obvious strategy was a simplification of what was to be attempted. We have just touched on one example. One would not have chosen one of the most complex models for payments—that of combining two different forms of data and then shifting it over a period of time. Clearly that would require a far more difficult design than a number of the alternatives. The hon. Member for Brecon and Radnorshire (Mr. Williams), rather kindly, did not go into detail about the rather simpler approach that he must have enjoyed in his native country, which led to successful payments on time and without hassle. One might have thought that that would have occurred to people in designing the system. Instead of idealising where we might be going, a pragmatic approach of designing something of lower risk should have been dominant in the minds of the ministerial and departmental teams.
Mr. Jack: Does this not raise a serious question as to the advice that was given to Ministers when the policy was being negotiated and the seeming lack of any advice that said, “These are the implications of what you are agreeing to”?
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