Rural Payments Agency

My Lords, with the leave of the House I shall repeat a statement on the Rural Payments Agency made in another place earlier today by my right honourable friend the Secretary of State for Environment, Food and Rural Affairs. The Statement is as follows: ““With permission, Mr Speaker, I would like to make a Statement on the Rural Payments Agency. In my Written Statement of 9 May, I promised to keep the House informed on progress made by the Rural Payments Agency on the single payments scheme. At Oral Questions today, no questions on the SPS were on the Order Paper. I therefore thought it right to give honourable Members the chance to raise the issue. In summary, there has been some progress, but the situation is far from satisfactory in a number of respects. As of Tuesday 20 June, some £1.38 billion, representing over 90 per cent of the total fund, has now been paid to over 100,000 applicants; 82,571 claims have now been settled in full; and 18,785 applicants have received a partial payment and are awaiting their ‘top-up’ payment. ““On 9 May I said that the top priority for the Rural Payments Agency would be those claims of more than 1,000 euros where no payment had been made. The number of such claimants in this category is now approximately 2,300. I recognise the hardship involved for them and deeply regret the distress caused. The Rural Payments Agency is taking further steps to pay those complex claims, including discussing issues direct with claimants and, where feasible, bringing parties together in cases of continuing disagreement. The Rural Payments Agency has written twice to all individuals concerned. ““I also recognise the importance of the unresolved hill farm allowance payments. Of the approximately 10,500 eligible HFA claims, 5,000 have been paid in full and a further 900 authorised for partial payments. Full and partial payments are continuing to be made. ““The European Union defined payment window for making 2005 single payment scheme payments runs from 1 December until 30 June. Work is continuing to pay as many claims as possible by 30 June. However, farming leaders have made representations to me on behalf of any farmers who do not receive the full sum due to them within the payment window—that is, by Friday next week. I have therefore authorised the Rural Payments Agency to make interest payments of the London InterBank offered rates plus 1 per cent calculated from 1 July, in respect of any payments where responsibility for the delay rests with the Rural Payments Agency. This will be subject to a minimum interest payment level of £50. Further details will be given on the timing of these payments once the Rural Payments Agency has assessed how they can be integrated most effectively into the existing payment schedule. ““Work on delivery of the 2006 single payments scheme is under way. As I said on 9 May, the 2006 scheme year will be very challenging. The Rural Payment Agency’s interim chief executive, Tony Cooper, has made an initial assessment of the task ahead. He has confirmed that in respect of customer service and management information there is no quick fix. Possible options for the 2007 scheme—for example, the use of a minimum payment level—are not available for 2006. ““Against this background, farming leaders have understandably called for partial payments to be made under the 2006 single payments scheme. I have both discussed the need for the necessary EU legislation to make partial payments with Commissioner Fisher-Boel and authorised the Rural Payments Agency to start work on necessary systems. However, until the RPA’s chief executive has had an opportunity to make a realistic assessment of the prospects for full payments, I do not want to commit to a particular timetable or specify whether or when partial payments might be made. Initial validation of 2006 claims is under way and detailed validation should start next month. By the time the House returns after the Summer Recess, therefore, we should have a better understanding of the prospects for the 2006 scheme and I will make a further Statement then. ““Given the position on the 2006 scheme, I have decided to simplify to the maximum possible extent the arrangements for the incorporation into the single payments scheme of additional support arising from last November’s landmark EU sugar reform. In practice, that means that £52 million will be added entirely to entitlements held by sugar beet producers who meet defined criteria, rather than some of the funds being used to increase the flat rate value of all entitlements. Further details, including on arrangements for 2007, will be announced in due course. ““I can also report that an EU regulation has been adopted which provides for all 2006 single payments scheme claims to be accepted without penalty until 15 June. This extra time, above and beyond the extension to 31 May I referred to in my Statement on 9 May, will mean that around 4,000 farmers will not now be penalised. I am grateful to the European Commission for its understanding on this issue. ““The fundamental review of the Rural Payments Agency that my right honourable friend the Member for Derby South set in train earlier this year will be important for the future of the Rural Payments Agency when it reports at the end of this year. In the mean time, I know that this year’s problems have caused real distress and I repeat the apology to farmers I have made before. I can assure the House that the Rural Payments Agency chief executive, with the support of the department, will be looking to take interim steps to aid the recovery process and improve the experience of farmers dealing with the agency to the maximum possible extent. I will keep the House informed as matters progress””. My Lords, that concludes the Statement.