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Baroness Miller of Chilthorne Domer: My Lords, when this subject was debated in a Starred Question on, I think, 24 January, it was believed that some of the questioning was actually questioning the very substance of CAP reform. I say now on the record that we have always supported CAP reform. We have been very clear about that. I think that we really need to separate the two issues. Any criticisms which I may now level are certainly not about reform, which is welcome, but about its implementation.

I too have found no answers in the Statement, but perhaps I did not expect to find any at this stage. If there had been anything more positive to say, the Government would have come forward with their own Statement rather than respond to a Question. However, a number of questions arise now. The first question for farmers who are in really desperate circumstances must continue to be whether the Minister has a more definite timetable in mind. In particular, in answer to a Written Question, it was said that claims would be processed randomly according to the order in which they came in. Has the position changed, and will they be processed in a more orderly way?

Secondly, the RPA is responsible for nearly £3 billion of payments—£2.9 billion, I think—and it costs £249 million a year to run. Defra has an RPA ownership board and an RPA executive review group, both of which I believe are chaired by a senior Defra official and both of which I presume report regularly to Ministers. How was it that these groups did not spot the problem earlier? I have gone back through all the Written Questions and Answers and the problem clearly arose well before it became apparent to farmers that they were really going to suffer.

I presume that the Government are maintaining their position on not paying interest because they do not feel that it is appropriate. I note their reason for saying that, which is that the payment window runs until 30 June.
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According to an Answer given to my honourable friend Dr Cable in another place, the number of people employed by the RPA decreased by almost 500 between March 2005 and February 2006. If the RPA was to undertake such enormous changes and it could have foreseen the amount of work that would result, why did it choose that time to cut staff, just when it was so busy? Did the number of RPA vacancies increase substantially during the period of the problem? In other words, how many vacancies is the RPA suffering from?

Farmers are, of course, in the front line and are having enormous difficulties. Nevertheless, as we learnt from foot and mouth, what critically affects farmers also affects the whole of the wider rural economy. I think we will want to return to that in the debate on Thursday.

6.46 pm

Lord Bach: My Lords, I thank both noble Baronesses for their comments and questions. The noble Baroness, Lady Byford, asks what I was saying about resources. One of the initial steps that the new RPA chief executive suggested to us last week, and which we have taken up, was that we should focus more resources in the RPA on making the 2005 payments as fast as is legally possible. The RPA is a large organisation, as we have heard; it has centres all over the country. A lot of resources have already been applied to payment of the subsidy. He is suggesting that more resources should be applied to them from within the RPA. We agree with him.

At the very last stage before payment it was necessary for there to be six different authorisation processes before payments could be sent. The new chief executive suggested that that number could be decreased to two. That has been implemented at once.

As for whether we will have more information by the time of our debate on Thursday—I believe that the other place also is debating this issue, on Wednesday—the new chief executive is coming forward later this week to the Secretary of State and me with other proposals. He has, after all, been in position for a total of only 11 days. I hope we will be able to say something about his proposals in those debates, but I cannot guarantee that.

(13)The noble Baroness asked about the 15 May deadline for farmers to apply under the 2006 scheme. The 2006 scheme literature, including sample forms, is already on the RPA website. Forms pre-populated with data will be distributed shortly. Of course we appreciate that some farmers would wish to have additional certainty on the detail of their entitlements before submitting a claim for next year, but we can see little chance of amending the deadlines which are set in legislation agreed by all EU Agriculture Ministers. But we will see what we can do to deal with the problem that she raises.
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Lord Neill of Bladen: My Lords, will the Minister give way?

Lord Bach: No, my Lords, I think I am obliged first to answer questions from the Front Benches. I will of course answer other questions in due course.

Of course the delays are causing real hardship. We appreciate that very much, which is why we were so disappointed not to receive until 14 March of this year the advice which first told us that these payments would not be met in bulk by the end of March. The advice we have received from the banks so far is that they are not seeing any change in the number of farm business failures and that no otherwise viable business is likely to fail as a result of the timing of payments. On Thursday I will be seeing the banks; I saw them last December; and, in answer to the noble Baroness, I am also seeing the suppliers AIC later this week.

The noble Baroness asked about who we are focusing on. In practice we are giving priority to those who received payments under the old CAP schemes, which the single payment scheme has replaced. They are the ones for whom cash flow may be an issue, as their annual income is traditionally supplemented by a CAP payment by this time of year. New applicants in 2005—there are many of those—generally have much smaller payments due. These are people who did not apply under the old schemes but who are applying under the new scheme because it is based on land rather than on production.

As to the noble Baroness's comments about the Secretary of State and myself, we take our responsibilities extremely seriously and I think her remarks were a little cheap.

In response to the noble Baroness, Lady Miller, I have already mentioned that we are focusing on those for whom cash flow may be a really important issue. We accept that there are a number of those.

I was asked about a more definite timetable. I want to be cautious. In the past there has probably been too much easy forecasting and not enough solid fact. Until we get the next advice from the new chief executive, I am not prepared to make forecasts about future payments. I can tell the House how much has been paid to date, and at my weekly meetings with the NFU, CLA and the TFA we will regularly let them know what the weekly figures are as they advance. In the past week £60 million of claims were met and in the three and a half weeks before last week £75 million of claims were met. So there was a considerable improvement during the course of the past week.

The noble Baroness, Lady Miller, will know that a further review is to start immediately to ensure that we get some results in time to affect next year's scheme. We will not allow the remainder of the review to interfere in any way with what we need to do to get the 2005 payments out, which is the absolute essential and our first priority. This review will involve a team of
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consultants and will focus on getting all the processes right, especially for next year. It is essential that we have a good look at how the RPA works and how it is run. It is a big organisation and that is what the Hunter review will do.

The precise details of the RPA's actions are for the new chief executive to firm up. We are focusing resources—a priority for medium-sized claims—to maximise the value of the payments, not the actual number of claimants. With regard to disproportionate checks, some did turn out to be either duplicated or of very little value. As I have told the House already, four out of six checks at the payment stage have now been dropped. The noble Baroness asked about RPA staffing. I shall write to her or answer her if she raises these matters in the debate on Thursday.

6.54 pm

Baroness Shephard of Northwold: My Lords, the Minister said that he became aware on 14 March this year that payments could not be made on time. I am very surprised by that statement. Is he not aware that, as many as four years ago, warnings were given in the other place about exactly this eventuality arising, not only in the Chamber during the passage of legislation but also in Select Committee? How is it that, four years on, the noble Lord claims that he was surprised by this new knowledge?

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