Single Farm Payment Scheme

Wednesday 20th July 2016 Lords Chamber

Question

15:15

Asked by

[The Earl of Shrewsbury]

To ask Her Majesty’s Government what progress has been made to rectify delays in payments from the Single Farm Payment Scheme.

[The Earl of Shrewsbury (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and declare an interest as a member of the National Farmers’ Union.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)]

My Lords, I declare my farming interests as set out in the register. I acknowledge that in the first year of the new and complex CAP scheme there have been enormous challenges. I recognise that many farmers have waited longer than I would have wished for their payments. As of 17 July, 86,788 farmers—that is 99.6%—have received around £1.35 billion of payments. The Rural Payments Agency continues to focus on making top-up payments to those who have already received bridging payments.

[The Earl of Shrewsbury]

My Lords, I am grateful to my noble friend for that reply. I congratulate him on his new promotion. Is he aware that many farmers are facing severe cash-flow difficulties because of these payment delays, and indeed that some have gone out of business? Many have had to sell livestock prematurely in order to settle their own financial commitments, and many have had to dig into their savings. How does this unhappy situation concur with Her Majesty’s Government’s policy of ensuring prompt payments to SMEs, and is the Minister sure that the RPA administrative machine is adequately resourced?

[Lord Gardiner of Kimble]

My Lords, I thank my noble friend for his very generous comments; I am indeed hock-deep in Defra briefings. I am well aware of the situation for many farmers, as my noble friend has described, and many lessons clearly have to be learned from this first year. Indeed, we are looking to have 90% of farmers being paid their 2016 BPS claims in December. I shall be visiting the RPA as soon as I can, and I very much hope that we get into a better situation for the coming year.

[Lord Clark of Windermere (Lab)]

My Lords, were these delays caused because money was not released through Europe or was it, as many farmers have told me, that the money had been transferred to Defra but Defra had not paid it out? Where was the delay?

[Lord Gardiner of Kimble]

My Lords, there are a number of reasons for this. In part, as I said in my first reply, it is because this is a new CAP with a lot of complication, which we in the UK sought to make less complicated. The noble Lord will know about disallowance, and one of the issues that comes forward is ensuring that we have a much-reduced disallowance situation. Money was available but there were very sound reasons why we had to ensure that there was a reduction in disallowance.

[Lord Curry of Kirkharle (CB)]

My Lords, the recent National Audit Office report was quite damning about the administration of the scheme. Not only are we suffering disallowance because many farmers are not receiving their payments, as the Minister has acknowledged, but some have had to submit a second year’s application form before the first year has been confirmed. They are deeply concerned that they may suffer other disallowance penalties because the original form may not be complete.

[Lord Gardiner of Kimble]

My Lords, as I hope your Lordships will understand, not only am I aware of these issues but I have great sympathy and understanding of them. The remaining claims that we have to deal with concern some very complicated commons issues, cross-border issues and issues like probate, where we have the money but there is as yet no grant of probate for people to receive those funds. There are a number of reasons why we are down to about 1,200 claims, but still I am looking for progress.

[Baroness Parminter (LD)]

My Lords, farmers need reliable broadband to apply for these farm payments and run their businesses. Given the criticism this week from the Select Committee of BT Openreach’s quality of service, what are the Government going to do to ensure that we get decent broadband in rural areas?

[Lord Gardiner of Kimble]

My Lords, that is a top priority. It is why there has been considerable government investment in this, and we need to work with a number of stakeholders to improve it. One of the greatest difficulties is the last 5%. I am very interested in this; it is where our remote rural areas are being disadvantaged, and I am very keen that in Defra and DCMS we work on this with innovation to see how we can help.

[The Lord Bishop of St Albans]

My Lords, those of us in touch with the farming community are deeply aware of the 13,000 cases that are being reassessed at the moment, and we are grateful for what is being done to expedite that. The important question is: how will the system be reviewed and resourced so that this does not happen in future years? Can the Minister assure us that something is being done to guarantee that we have a better system? In particular, will he reconsider appointing a specific case worker for each application to try to see them through?

[Lord Gardiner of Kimble]

My Lords, there are close working relationships in some of the RPA centres, but I will take that back. I understand that of the numbers in payment reconciliation, the 13,000, 1,400 have already been completed. We want to make progress on this. One other thing I should have said before is that quite a number of people at the RPA are working on this—between 800 and 1,000—so the RPA considers itself perfectly well resourced to undertake this.

[Lord Grantchester (Lab)]

My Lords, I declare my interest as a farmer receiving payments, and I also welcome the Minister to his new appointment. He will know that these payments very often make up the largest part of farmers’ net income. Will the Government commit to developing a dedicated, fully funded agricultural and rural policy to replace the common agricultural policy following the Brexit vote?

[Lord Gardiner of Kimble]

My Lords, I thank the noble Lord. We both hold the dairy industry extremely dear. On that point, one of our highest priorities of all is to ensure that we are now working on the creation of a domestic agricultural policy that will support our farmers and consumers in our country at large.

[Baroness Byford (Con)]

My Lords, can the Minister cast a bit more light on the reasons for some of these delays? Is he confident that the new IT system is adequate? Over the years, IT system failure has caused delays in many of the payments. I should declare that we have received our farm payment.

[Lord Gardiner of Kimble]

My Lords, I understand what my noble friend said, and yes, I have looked into this already. The main IT system has worked very well indeed, and in fact, over 80% of the claims were submitted online this year, which is the highest proportion of online claims in any one year. We need to improve on that. A lot of the work this year has been about improving the IT system. We have invested quite a lot; now we need the return.