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England Rural Development Programme (Closure of Project-Based Schemes) Regulations 2006

I am grateful for the opportunity to respond. Without causing myself further problems, I must say that this is a sorry tale. While I shall do my best to respond to the detailed questions, I shall not be able to go much beyond the detailed Written Statement we issued on 1 November, at cols. WS14-15 of Hansard. There will clearly be a delay in the launch of the next rural development programme. We greatly regret that, which is why we issued the Statement last week. The key reason is the budget. We have always stressed that the final shape and size of the England programme depends on the availability of receipts from voluntary modulation. I shall seek to obtain the breakdown of the £1.3 billion that the noble Baroness asked for. That £1.3 billion is the approximate UK allocation for seven years, but does not include domestic matched funding, voluntary modulation receipts or state-aided elements. To give a total for the programme budget is currently very hard, but I shall give as much information as possible. The receipts are absolutely essential if we are to achieve our rural development ambitions, such as environmental stewardship. Our preparations for new programmes are well advanced but, until voluntary modulation negotiations are concluded at European Union level, we cannot reach our own decisions on the total programme. The programme for 2007-13 must be approved by the Commission before we can start. As the noble Baroness will realise from our Statement, the Commission will have up to six months to approve the programmes after formal submission. That means that UK programmes will start late, and I deeply regret that I cannot say when. It is wholly out of my control. In some ways, it is currently out of Defra’s control for the reasons set out in the Statement. That is deeply disappointing to me, the department and the Government as a whole. I am afraid, in this case, the first port of call for farmers, land managers and other rural beneficiaries is Defra. I am not passing the buck to the European Union, but I have little control over what is happening and the delay on this. We are discussing contingency arrangements with the Commission. The recently adopted transitional regulation gives us legal cover to pay existing commitments under the current programme. So the one thing I can be positive about is that beneficiaries’ agreements under existing programmes will continue to be honoured, notwithstanding the delay. Clearly, some programmes will have a spill-over into 2007, but they will continue to be honoured. Our officials are working closely with the European Commission and delivery bodies to achieve this. In our Statement last week, we have committed to keeping Parliament fully informed. For the avoidance of doubt, and for those outside who listen to our proceedings: we cannot open the current project-based schemes. That is not a practical proposition. The current England programme will of course close when the EU rural development regulation is repealed on 31 December. There is no legal basis for new agreements under project-based schemes after that date. This was, of course, the consequence of a difficult decision taken much earlier this year and, announced in February, to close new applications for entry to the schemes as of 30 June this year. We wanted to allow sufficient time for applications before the programme closed and get an orderly handover to ongoing commitments. This enabled the Rural Development Service to make some funding decisions on the continuity of service to deliver schemes before Natural England emerged on1 October 2006. The main aim of that transition period was to minimise the risk that customers would be disrupted because of this changeover and to reduce margins of error in administration. I can report to my noble colleagues that the handover appears to have gone well. The rural development agencies—I note the point the noble Baroness made about them—took responsibility for the legacy project based on schemes from 1 October and are managing the live projects handover. The RDAs authorise the payments and undertake the European Union-required inspections for approximately 1,600 projects across the country. Before the new programmes are agreed, the rural development agencies, plus the regional partners and stakeholders, have to finalise priorities, discuss funding possibilities and work with local action groups. We are working closely with the RDAs on the next programme. I know there is some underlying criticism of the RDAs—not so much because of their rationale but because when they were first set up they looked very much like urban priority organisations. That is not the case now. As the years have gone by, they have been reaffirmed. The week before last, I met with the chair of the RDA for the east of England, the lead RDA on Defra issues, and I have arranged to meet in January all the members of the RDA boards who hold the rural brief. In fact, I hope to do so in the convivial surroundings of the House of Lords—so there is such a thing as a free dinner, I suppose. I take this very seriously. While I can see the chairs of the RDAs at any time during their regular six-weekly meetings at the DTI in Victoria Street, I want to see the people who have the responsibility for the rural programme at board level on the RDAs. While I have to leave it to the RDAs to execute the job and the details as and when the programmes arrive—I must not be an interfering Minister—I am not a hands-off Minister. At the end of the day, I am the one who must stand at the Dispatch Box answering questions, not the RDA chairs or chief executives. So, to that extent, I want to reach the people with that responsibility and emphasise that I wish to work in partnership with them but that we want effective action on the rural programme. The RDAs are working closely together. Indeed, in my travels in the country— limited though they have been in the past few weeks because of the obvious necessity of being London-based—the chief executives of a couple of RDAs spoke to me about some of the rural programmes they had been working on outside of these particular programmes. They wanted to talk about it because they were keen to assure me that they were seized of the issue. One would have been classed as one of the most urban smokestack RDAs when it was set up. Nevertheless, it is responsible for huge areas of the countryside, including some of the least densely populated county in England. That is important. The voluntary modulation proposals will allow UK receipts to remain within the UK, which is what we want. That is one of the advantages of the proposals and is why the EU is involved here. I understand that the legal basis for voluntary modulation expires after the single farm payments for 2006 have been made, so we need a new EU regulation. We are currently considering the intra-UK allocations, but in the absence of a voluntary modulation regulation, it is difficult to do that. I hope to provide details in this respect as soon as possible. At the Royal Show, my right honourable friend the Secretary of State confirmed our intention to run the hill farm allowance in 2007; he made that absolutely clear. We are making every effort to run the schemes as planned and we will publish details of the contingency arrangements as soon as possible. The noble Baroness will also appreciate that we have been consulting on the allowance and further work is going on. During the past few days I have discussed these issues with stakeholder colleagues from the industry, in particular the NFU, and with colleagues in Defra. I want a satisfactory solution, but what I do not want is unnecessary disruption to hill farmers for a couple of years before something new starts. We will look at the options. I know that there have been a few stories in the farming press, but, nevertheless, our task is to ensure that we pass on maximum aid to hill farmers, perhaps using slightly different arrangements, but with a commitment to keep it for 2007 although it may go on for a little longer to prevent future disruption. We will report back as soon as possible, but I cannot go beyond what I have said at present. I am sorry about that. We want to target areas of need rather than respond to the loudest voices, but I appreciate the difficulties in the hills and how classification means that payments are made at different rates. Although I know that this is important in terms of the programmes which are the subject of this order, Defra is already putting some £73 million into rural development through the RDAs. These schemes are vital. I have brought with me the glossy leaflets kindly provided during a briefing last week. I have to say that it all looks like a bit too much red tape when you read all the bullet points and rules, but it is public money and we have to be careful of the EU auditors. Nevertheless, as the noble Baroness made clear when she listed them, these are real and practical schemes that are vital to the rural economy. This is a very important issue. In our response to the Biomass Task Force report, we made clear our principled support for energy crops within the new rural development programme and we will outline this in greater detail as soon as possible. The 2005 farming budget deal, if I can put it that way, was a complicated process. I looked at it from afar, I may add—from across the water in Northern Ireland. At the time the UK held the EU presidency. Sometimes it can be a disadvantage to be in the chair, to put it mildly. You cannot fix things for yourself, you must almost stand aside to win concessions and promote negotiations for the greater good of the club. The deals have to be secured and we did that, but we were not able to fix it for the UK. Holding the presidency means that you have a few fingers tied behind your back—not exactly a whole hand, but there is that difficulty. Ministers in the other place understand this problem when they realise that they cannot deal with constituency arrangements because that would be totally wrong. They have to act ministerially, just as we had to act presidentially. The provisions for voluntary modulation allow us to top-up spending. I have the impression that virtually every government department is in daily contact with the Treasury on a range of issues. That is not a buck-pass, but certainly that is the case as far as we are concerned. Unlike most departments, we are governed very much by our membership of the Common Agricultural Policy and the EU. That is crucial and the way it should be. Nevertheless, we are in constant touch with the Treasury. Until we know about the voluntary modulation, it is difficult for us to say what will happen about match funding. I much regret that; I am standing up but I am not able to give positive responses to anybody in the countryside except to say that the schemes will arrive. I hope that we will not lose any money; the breakdown of the money has not arrived, so I will have to write to colleagues about that. But because of the delay, although I cannot give the total now, we can see how the pot of money is made up. The delay should not affect the totality, because it could run to several months next year. Once we have agreed voluntary modulation, looked at match funding and talked to our colleagues in the Treasury on those and other matters and then gone back to the EU with a programme, that will take six months. The Written Statement of 1 November said that, at present, "““the progress of the regulation is stalled in the European Parliament””.—[Official Report, 1/11/06; col. WS 14.]" It is completely outside our control and, in some ways, outside the Commission’s while it is stalled in the European Parliament. I do not know the exact details, but if Euro MPs are worth anything, that is where they should be lobbying. As a UK Minister, I cannot interfere with the European Parliament—that is simply not possible.