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Lord Bach: My Lords, it was the noble Baroness's government who set up the introduction of arm's-length delivery agencies as one of the major Civil Service reforms of the 1980s. The RPA is precisely one of those arm's-length delivery agencies—even though it may have been created well after that time, we are dealing with such an agency. This agency's job is to pay out these sums. It is for Ministers to get advice from such agencies and to take action accordingly. All the advice we had from the agency up until Tuesday evening of 14 March was that the bulk of payments would be made by the end of March. Earlier advice from the agency was that we would begin payments in February. That advice was right; we did begin payments of the single payment subsidy on 20 February. The advice on bulk payments was wrong. Ministers first heard about it on 14 March.

Viscount Bledisloe: My Lords, I declare an interest as a farmer who is awaiting this money with ever-increasing impatience and ever-diminishing faith. I thank the Minister for the frankness of his Statement. I am pleased to see that a head has rolled. However, I very much hope that no real question will arise of the noble Lord's departure. I am sure that nobody in the farming community would want to lose a Minister who both listens and cares, and I hope that the noble Lord and his colleagues will take that to heart.

Does the Minister recognise that these payments are vital to the vast majority of farmers, who are attempting to live on the proceeds of farming and that these delays create intolerable burdens? The noble Lord spoke of anxieties; it is not just anxieties, but
 
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burdens and problems. He has not yet answered the questions about interest or compensation. What is the position on that? If a farmer is late with his taxes, he is charged interest. Will the Government treat the tax-paying farmer equally and pay proper interest and, where appropriate, compensation for this inexcusable delay?

Lord Bach: My Lords, I thank the noble Viscount for his kind remarks; I very much appreciate them. I accept the premise of what he says: this is a serious state of affairs for many farmers. That is why we regret so much that this has happened. I am afraid that I cannot offer to pay compensation. The issue of compensation does not arise, as the EU regulations governing the scheme provide for a payment window—as I think noble Lords know—until 30 June. It is not the end of March yet. Farmers have been aware for more than 12 months that payments would not be made until February 2006.

Lord Monro of Langholm: My Lords, I am sad to say it, but this must be one of the most disgraceful Statements ever heard on agriculture in either House. How does the Minister expect farmers to continue to survive when there has been a failure to make their basic payments by the end of March? Maybe not April, maybe not May. I declare an interest as a Scottish farmer. I was paid in January. If Scotland and Wales can do it, why on earth can't England? What were Ministers doing in November, December, January, February and March? Were they actually checking that the cheques were going out? Were they making any effort to see that the crucial payments to farmers were made? They have left agriculture in a parlous state, grossly short of cash that they should have received in this financial year—probably ending on 5 April—and apparently, from what the Minister has said, with very little hope of payment in the next few weeks.

Lord Bach: My Lords, I am surprised that the noble Lord, given his vast experience of public life, should say that this is the worst Statement he has ever heard during his career.

Lord Monro of Langholm: My Lords, it is the most disgraceful Statement.

Lord Bach: I am very grateful for the clarification, my Lords. However, I have to say that I find it hard to believe.

Our objective for the use of this sizeable sum of public money—some £1.6 billion a year—is to promote a truly sustainable English agriculture industry; in other words, the subsidies paid to farmers for years and years on the basis of production alone constituted a system that should have disappeared a long time ago, if we were to have a properly sustainable farming sector in this country. So I make no apology for our adoption of these measures as a result of the latest CAP reforms. I wish that the noble Lord's government had done something to modernise farming in any way at all while they were in power.
 
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The system we are using in England is different from the model used in Scotland and Wales. They base their payments on an historic basis alone. In accordance with our hope of achieving a sustainable farming sector, we have a mixed historic and flat-rate system. Indeed, there are rumbles in EU countries that have adopted the historic system alone that they are beginning to wish that they too had a mixed system in place.

Lord Neill of Bladen: My Lords, I declare an interest as one of many thousands of farmers who remain unpaid. For me, the two most startling points in the Statement were the late discovery that the level of chaos in the RPA was such that not until 14 March did it reveal to the Government that it could not comply with the promise, made on many occasions, that the bulk of the payments would be through by the end of March. That is completely extraordinary. The other matter of dismay to the country is that the Minister is not in a position today to give any forecast of when these payments will be made. I accept the integrity of the position he takes: he is not giving us a false forecast. But it is a very desperate position when a Minister cannot say that, "at least by the end of April" or "by the end of May", the payments would all be through the machine. He cannot even say that, which is deplorable.

Lord Bach: My Lords, we too were surprised and shaken to hear for the first time on Tuesday 14 March the news that the bulk of the payments could not be made by the end of March. I share completely what the noble Lord has said about that. I regret that, although I would love to do so, I cannot give the House a date by which all the payments will be made. Nothing would give me greater pleasure than to be able to do so from the Dispatch Box today. However, that would be irresponsible of me. We have put the new chief executive in place and, in his first report to the Secretary of State and me last week he said that he wanted more time before he could make a judgment on that crucial figure.

All I can say to the noble Lord—and it is not much comfort—is that payments are being made as we speak. They certainly have not stopped, but I cannot give him a date by which they will all have been made.

Lord Cavendish of Furness: My Lords, I also declare an interest as a hopeful farmer. The Minister spoke of farmers with cash-flow problems. Surely he is aware that all farmers rely entirely on positive cash flow. Is he further aware of the extraordinary distress caused to my neighbours in Cumbria? I know that the noble Lord is sensitive to criticism, but will he look at the Statement again and accept that its language suggests total indifference to all of us who work in the countryside?

Lord Bach: My Lords, I hope that I am not overly sensitive. Of course I shall look at the Statement again, but it is an answer to an emergency question asked by an honourable Member in another place. We are
 
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sensitive to the issues that have arisen. There are considerable problems for many farmers because half the amount will not be paid by the end of March. I repeat what I said earlier: payments are continuing. But I am not prepared to give a date by which those payments will have been completed. I cannot say anything else to the noble Lord at this time.

Lord Carter: My Lords, does my noble friend agree that part of the problem is the complexity of the system adopted for England as opposed to those used in Scotland and Wales? Is £1.6 billion the total cost of the single payment scheme? If so, can the noble Lord give me the cumulative figure of what has been paid out so far? He mentioned a series of figures quite quickly. If there are any further problems, would it be possible to make advance payments to farmers on account of their final payment?

Lord Bach: My Lords, I am grateful to my noble friend. In broad terms, £1.6 billion is the very sizeable sum of public money that will be paid out under the single payment scheme. Let me give the latest figures: at the close of business on Friday last, March 21, the RPA had made payments to 18,507 claimants, which is 15.4 per cent of the total, to a value of over £135 million.

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