Rural Payments Agency

rose to call attention to the Rural Payments Agency; and to move for Papers. The noble Lord said: My Lords, I start where my noble friend Lady Byford left off by declaring my own interest in this subject. I make no apologies for declaring an interest; it means I actually know a bit about it, and something of the problems. My son-in-law is now involved in running our farm, and he has been trying to cope with that. While I have noticed the maps going backwards and forwards, it was not until I was asked by my noble friend Lady Byford to open this debate that I came to understand just what a scale of shambles that now represents. I was interested in the exchanges that took place on a Statement in this House earlier this week, when my noble friend Lord Monro said that he thought it was the most disgraceful Statement on agriculture he had ever heard in the House. The Minister challenged him, and thought that that was an unfair comment. With great respect, I do not know if the Minister knows my noble friend well, but he has been in this House or the other place for 44 years, so he has some experience of these matters. He was a distinguished Minister working with me in the Department of the Environment, and is very familiar with agriculture questions. His judgment is one that I respect on this matter, and one that I endorse. I start from the position that we are now dealing with an industry that the Minister knows—everyone knows—is not the strongest industry in the United Kingdom. It faces major challenges. In many parts of the country, the whole future of farming as we know it is in question, as are the survival of family farms and the fabric of our countryside. It is an industry that is entitled to expect accuracy and efficiency from government. It will not always get everything it wants, but if it can no longer believe anything Ministers say to it, or have any confidence whatever in announcements that are made, that is a very serious situation. Sometimes those announcements may be on policy and strategy. These questions and statements directly affect the financial viability and survival of a considerable number of family farms in this country. Today the Minister can get away with saying that he has had consultations, he has talked to representatives of the industry and of associated industries, and he has talked to the banks, and they have not yet reported the situation. We are not quite there yet. I do not know what the outcome will be in the next month or two regarding Lady day—the traditional date for the payment of rent—or the position of tenant farmers who believed the Minister and thought they would have funds available. The state of the industry is no secret to many farmers at present, and the single payment is a critical element in their finances. In many cases, banks feel that they have already over-lent to farms and agriculture, and are not too willing to extend further credit. What the consequences of this may be, I would not presume to comment on in detail today. There have been, in yesterday’s debate in the other place and in Westminster Hall, some very serious warnings on this matter. From the distinguished list of speakers who will follow me in this debate, and given their considerable experience, I have no doubt that we will hear clear warnings of what the consequences may be. Looking at the background to this, I have always had some reservations about the system of key targets. I am sure the Minister might share some of that concern. I see that key target number one in the RPA business plan, accepted by Ministers, is that payments under the single payment scheme should commence by February 2006, and that 96 per cent of valid SPS claims should be processed and paid by 31 March 2006. Has any key target in any government department ever been so spectacularly missed? This is, as the Minister will recognise, key target number one. It will pose enormous problems for those concerned. My understanding is that, far from processing 96 per cent by the end of March, the figure is now 23 per cent—although there may have been some modest improvement on that—and payments to the industry, to farmers up and down England, are now £1.1 billion behind what the Government promised. For an industry facing such financial challenges, that is an incredible figure. It could be said that this is all very unfair and that Ministers could not possibly have anticipated the problems they now face. So, I look to see just how many warnings the Government received. Warnings were given back in 2003; there was a warning when the announcement was made by the Secretary of State in February 2004; and most significantly, a warning was given by the Select Committee in January. Its report was rubbished by the Minister at the time, but on reading it since, it appears to be incredibly accurate. On making the decision to adopt the dynamic hybrid approach, the All-Party Select Committee said:"““We believe Defra gave insignificant consideration to the administrative complexity of the chosen model. Defra should also have considered postponing implementation of the SFP until 2006, as allowed for in the CAP reform regulation, to allow more time for preparation, thus avoiding the problems that are now evident . . . the lack of foresight shown by the RPA, and the apparent lack of analysis about the possible impacts of the implementation model are not acceptable. Further, we believe that both Defra and the RPA should have anticipated the extra work involved in this project””." I do not think that anybody would now seriously disagree with that Select Committee report. The Government chose to pursue what is called in the jargon, the ““dynamic hybrid model””. They turned their back on the idea of a more transitional arrangement, as referred to by the Select Committee, and introduced this new scheme into a department which—as all those who have had contact with it over many years will know—is, to put it simply, not the strongest department in government. Remember the BSE crisis or the foot-and-mouth situation, in which the Prime Minister himself realised the limitations of Defra’s capacity in this area, turning, at the moment of greatest need, to the Army and the famous brigadier in order to resolve the situation. This is not a department that should have been faced with extremely complicated new arrangements, and then expected to deliver to a very tight timetable. What Ministers asked the RPA to do indicates a serious lack of judgment. I turn to the background to this. I have read the Select Committee report. At the Oxford Farming Conference the Minister indicated that the target of 96 per cent would not be achieved and that the true figure might be as low as 50 per cent. Following that, the Ministers said that they did not become aware until 14 March that payments would not be made a fortnight later on 31 March, as they had originally indicated. I cannot, in my experience, recall an incidence of more inadequate and incompetent handling, be that by Ministers, officials or the RPA. The fact is that somebody has blundered; there is no question about that. I have some sympathy with the Minister, because he was not around when the decision to follow this particular scheme was taken. The Secretary of State was in another department. Margaret Beckett, Secretary of State at the time, announced the decision in February 2004. We are now in a situation in which not only did people know that the target would not be achieved by that date, but—as far as I am aware—there is no information about when payments will be made. I understand that there is a legal obligation for these payments to be made by 30 June. If that is correct, can the Minister assure us today that all payments will be made by the end of June? If he cannot give that assurance, what will happen to the people who—if they are able—then have to borrow money and pay interest, possibly at not very advantageous rates if they are already outside, or at the ceiling of, their borrowing limit? What will the Government do about them and this most unhappy saga? Can the Minister at last clarify the situation today? I turn to the seriousness of this matter. In my own ministerial activity, I was occasionally accused of being a ““hands-on”” Minister. That is sometimes a criticism; Ministers can become too involved, but sometimes Ministers have to get involved. They have to be able to ask the right questions; they have to be able to challenge their agencies and their officials. At the end of the day—and I hope this is not old-fashioned—I happen to believe that Ministers bear the ultimate responsibility. It is not a matter of there being no bad Ministers, only bad officials. Officials cannot speak for themselves; they must depend on Ministers to stand up for them. I think it has been noticed elsewhere that when the Secretary of State, on being challenged on this matter in the House this week, was asked about her approach to ministerial responsibility, she gave the unique answer:"““I am taking responsibility, which is why I removed the chief executive””.—[Official Report, Commons, 27/3/06; col. 552.]" It was not the chief executive who took the final decision as to what the system should be. In this situation, the consequences may lead to the bankruptcy of some of the ancillary firms involved. If they were in a strong position that would be an extravagant—maybe unjustified—comment to make. As the Minister knows, some areas of the industry are in great difficulty. What are we going to do about the farmers whose sense of responsibility means they will not order anything they cannot pay for, and have therefore held up their orders for seeds, cultivations and tractors in the current year? What will happen then to those still waiting and who do not know when they are going to be able to go ahead? They run the ultimate awful risk that they might lose the season. Against all those backgrounds, at the very least today, the House, the country and the agriculture industry are entitled to know when these payments will be made. They are entitled to expect action from those who took the ultimate responsibility for the installation of this new system, when they could have allowed a transitional period to allow the details to be ironed out. They now face a crisis—which it undoubtedly is in many corners of the agricultural industry at the present. I do not expect anything to happen. I do not think that this Government actually accept the convention for ministerial responsibility in the way that I happen to recall that the former Leader of your Lordships’ House—in the shape of the noble Lord, Lord Carrington—accepted. Although he did not actually have a direct involvement, at the moment of the Argentinian invasion of the Falkland Islands he immediately tendered his resignation. My noble friend Lady Byford referred, in much gentler terms than mine, to the need for Ministers to consider their positions. I noticed that the Secretary of State, rather charmingly in her Statement last week, made clear in the fourth paragraph that this was the Minister’s area of responsibility and not hers. In this situation, if Ministers have responsibility, for my noble friend to say that the Minister should consider his position was the most modest phrase that she could have used. He chose to deride it as cheap. That was an unfortunate remark to make because there is a serious crisis. The Minister is a decent and honourable man and, at the end of the day, faced with the scale of what has happened, he has the duty to consider his position here today. I beg to move for Papers.