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Lord Williamson of Horton: My Lords, I very much welcome the fact that, at last, the Minister has a grip on what is a very bad situation and the fact that there will be some interest payments, not only because of the money but because farmers will see that as a recognition that there is a real problem and that something practical is being done about it. I understand that the priority is to give money to people who have had nothing whatsoever, but payments over £1,000 will influence not just income but investment, purchase of stock, and so on.
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I understand that the Minister cannot say when every one will be paid, but are we talking about, say, three months or five months for payments that influence the running of the farm and investment, not just income? That is important for the longer-term future of some farms.

Lord Rooker: My Lords, first, it is not £1,000; it is €1,000, so we are talking about approximately £600. We have not stopped those payments, but the priority is those claiming more than €1,000. When the RPA staff are dealing with those payments and come up against queries because the system does not work, they do not then stop and twiddle their thumbs waiting for the next tranche of work to come through the computer, they then work on claims below €1,000. The fact is that they are not the priority; the priority is claims over that figure. That does not mean to say that the others are not being paid. We intend to get all the payments out as quickly as possible before or on 30 June and, if we miss any, as quickly as possible after 30 June. The initial priority for the workflow of the RPA staff must be those bigger claims.

Lord Biffen: My Lords, I have a minuscule interest to declare in respect of 30 acres of to-let grassland. I have watched this whole drama with bewilderment, certainly not with hostility. Can the Minister explain why so many continental countries have been able to resolve their agricultural claims in a much shorter period, whether he has studied their practices and whether they might be adopted by this country? Or are we landed with a computer program of such sophistication and ambition that we are likely to continue with these difficulties year after year?

Lord Rooker: My Lords, I certainly hope that the latter part of the question asked by the noble Lord, Lord Biffen, is not true. The fact is that not every member of the EU has gone into the new system this year for 2005. I understand that less than half of the members have operated a new payments system decoupling from food and livestock production. There was a choice. We, as the UK, were leading reform of the CAP, so it was inevitable that we wanted to use the new system as soon as possible. England has not been dealt with in the same way as Scotland, Wales and Northern Ireland, where payments worked faster and have probably—I do not know the full figures—met the payments deadline.

I understand that Germany moved on this. It has experienced some difficulties, and colleagues in the RPA will, over the summer, be discussing with colleagues from Germany some aspects that they found that they did not expect. There will be lessons to be learnt from the EU, but other members of the EU will be learning from us simply because we have been in the vanguard of operating this payment system. In the long term, it will deliver more money to farmers. It
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collapses 11 different payment schemes and more money will be paid out; it is just that it has not been paid out by the promised dates in the first year.

Earl Ferrers: My Lords, I shall ask the Minister some elementary questions. I first declare an interest in that I have been involved in agriculture. We all greatly appreciate the position in which the Minister finds himself. There are one or two things that I do not understand at all. The first is that Scotland, Wales and Northern Ireland have managed to pay their people; why have we not? Is it just that the computer has gone phut; is the system too complicated; or are the civil servants finding difficulty with it? Or is it that people have not sent in their applications? I think that the Minister said that there are not many of those. I just do not understand how we can have got into that position. If he could give us a brief reason, I would be grateful.

When the Minister says that he is doing his best to get all the payments out by 30 June, what is the inhibiting factor? Is it that the machine does not say what is the amount to be paid or that the figures are not available? If they are available, what is likely to be unpaid by 30 June?

British agriculture is facing its biggest crisis since the 1930s. It is a terrible thing that this system, which is so deeply complicated, should be imposed on British agriculture. Is there any way that the Minister or the European Union can make the system easier, because it seems a perfectly absurd thing to land on the industry?

Lord Rooker: My Lords, I am grateful for the noble Earl's questions. On his first question, the system that was adopted in England is not the same as that adopted in the devolved Administrations. Each was able to adopt the scheme slightly differently. England adopted a much more detailed, robust and forward-looking scheme. On paper, there is no doubt that it is the best way to go. The problem is how it has been applied in the first year. There are lessons to be learned from that. I have spent a year with responsibility for Northern Ireland. I did not deal with single payments because we were paying the money out from December. There were other issues there.

The noble Earl also asked the valid question: what is stopping the payments on the last 2,300 of the 120,000 claims? Those are the large claims; there are obviously some small ones. One cannot be precise. There are still disputes about field boundaries and about more than one application for a field; in other words, two farmers claiming the same field. I am not making an excuse, but there are more than 200 probate cases in the system that will have to be removed because it takes a lot longer to deal with them. It is unfortunate, but it is a factor. I am told that, as the system currently operates, when the operator thinks the payment is ready and when it appears on the screen the snag that stopped it going out the first time has been dealt with. However, there might be another snag waiting down the line which will not be flagged up until the first one has been cleared, so you do not know it is
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there. Sometimes, given how the forms are filled in, a duplicate page might be mistakenly filled in or a whole host of things can happen at the last minute.

We have paid out over 90 per cent of the money, with more than 82,000 full payments and a considerable number of partial payments. We are at the tail end of some complicated, awkward cases that have built up on top of the problems caused by the delays earlier in the year. One thing has fed off another. I cannot identify for the noble Earl one single problem to be fixed which would enable us to press the button and make all the other payments. If that were the case, I could say with confidence that we could make all the payments by next Friday, but I cannot.

Lord Willoughby de Broke: My Lords, the noble Lord's predecessor, the noble Lord, Lord Bach, repeatedly told us that staff in the Rural Payments Agency were working incredibly hard and for long hours to get the payments through. But according to newspaper reports, in the Newcastle office at least, staff seem to have been swinging naked from chandeliers and drinking champagne. Will he prevail upon the chief executive, Mr Cooper, to ensure that, fun-loving though these people may be, they get back to do the work they are paid for?

Lord Rooker: Yes, my Lords. The RPA has 900 staff, of whom probably only a handful have brought odium upon the others who are doing a decent job. They do work other than on the single payments, which account for only about 10 per cent of the workload. There is no evidence that any single payments have been delayed because of those unprofessional activities. Senior staff from the RPA's headquarters were dispatched to Newcastle to sort out the issue. That is all I can say about it at the moment, as an internal inquiry is going on.

The Earl of Selborne: My Lords, what has been the cost of this long, sad saga? Resolving the issue has clearly caused a hole in Defra's budget. The very welcome interest charges will be another cost, and there is always the possibility—is there not?—of infraction proceedings after 1 July. Has the Minister any idea what will be the total cost to Defra?

Lord Rooker: No, my Lords, I could only make wild guesses at the moment because the legal payment window was from last December to the end of June. We are still in the legal payment window. We have let down those who say they should have been paid earlier in the year, because we gave them a specific promise and did not pay them. But until the legal payment window ends on 30 June we will have no idea of the possible interest payments, how many big claims are left and the other complaints that, clearly, we will get. Making partial, top-up payments can be complicated, which is why we prefer to make full payments if possible.

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