Rural Payments Agency

My Lords, I declare an interest as an eligible farmer who, the noble Lord will be interested and pleased to hear, is fortunate to have received his full 2005 payment, for which I am immensely grateful. I thank the Minister for repeating this Statement today, the more so since I am well aware that he has a particularly busy and crowded day, and putting this in has not been easy for him. He also has my sympathy for the bed of nails on which he finds himself. That said, as the Minister acknowledged, the Statement is about a situation that should not exist. The best that can be said of it is that it has moved from intolerable to bad. That is the reality. It is not comfortable for anybody in the department, the Minister’s colleagues or for all those involved in the agricultural industry, particularly those adversely affected by not having received the payments they expected months ago. I was at an agricultural show yesterday, where I spoke to bankers about these problems. Although they were immensely sympathetic and doing all they could to help affected farmers, they made clear that it was as difficult for them as for farmers who have not received their payments. A lot of work has been done by the banks and the agricultural industry to set up temporary loans arrangements to carry matters forward and keep farmers afloat. While on the subject of bankers, I say to the Minister with some gratitude that the prospect of interest payments for outstanding sums after 1 July is very welcome. I hope he will forgive me the rather acid comment that my understanding is that 1 per cent over LIBOR is generally less than a farmer could borrow at commercial rates from a bank. None the less, it is a very welcome move in the right direction. I also welcome the Minister’s remarks on sugar payments funding. Sugar beet growers will be particularly grateful for that statement. What is the European Commission’s attitude to this particular hiatus? The Statement says that we are moving towards the 30 June payments deadline. We still apparently have some £13.8 million outstanding. There is another week to go, so presumably that figure will go down. At 30 June it is possible, as I understand it, for the Commission to impose penalties for failure to pay. It would be interesting to know whether the Government can indicate yet what the likely cost to the Treasury will be of that. I welcome the extension, to 15 June, of the period in which 2006 applications for single farm payments can be made without penalty. That date has now passed. According to replies given in another place, it looked as though application numbers were dropping. Has the Minister any idea how many applications might have missed that deadline? I imagine that, based on past applications, he will be able to give that figure. More importantly, is he aware of any reason why that situation should have arisen? I always regarded filling in these application forms as about the best-value-for-money task I had on my farm in any year. Any farmer who does not take that view has his priorities seriously adrift, and I cannot believe there are any farmers like that in the country. I know the Minister is doing all he can to sort this system out, and I hope that he succeeds, as does the whole industry. Yet it would have been better if we did not have to be here at all.