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Department for Environment, Food and Rural Affairs

Not a lot more. May I welcome the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Chatham and Aylesford (Jonathan Shaw), to his first Front-Bench post? I know that he has been a Whip, but this is his first ministerial position. If this is his first outing as Lord Rooker’s spokesman on Earth, we look forward to further discussions. I congratulate the Environment, Food and Rural Affairs Committee on producing two excellent reports. As the hon. Member for Leicester, South (Sir Peter Soulsby) said, it is a great shame that the Government’s responses, which I understand have been forwarded to the Committee, were not produced in time for the Committee to publish them. As a result, the House cannot consider the responses tonight. It would be wrong of me to seek to repeat the all the points made by the many hon. Members of all parties who have spoken. It is fascinating that all the Government Back Benchers who spoke on the report on the Rural Payments Agency totally endorsed the report’s criticism. As has been said, that criticism is extremely trenchant. When a Select Committee, acting unanimously, uses adjectives of the sort found in the report, it demonstrates how serious the situation is. The hon. Member for South Derbyshire, using his professional knowledge, explained to the House where many things went wrong in the management of the change, and the management of the delivery of the single payment system. The problems with the SPS started with the mid-term review. I want to make it clear that the Opposition supported the principles behind the changes, and the principle of decoupling support from production. Our only criticism is that the changes did not go far enough. I will return to that point when I move on to discuss the second report. We also supported the later decision to adopt a dynamic hybrid. Some of the reasons that the Government gave for the decision were right: it is difficult to justify paying people in 2012 for what they did 10 years earlier, and it will be easier to move to whatever happens post-2012 if such a change is made. However, as the report rightly says, the dynamic hybrid was apparently adopted in year 1, after the Government made the decision to start the process. As several Members have said, many of the problems could have been alleviated if we had delayed the start. I am convinced that that is where the main problems began. As we have heard, the programme involved the extension of the scheme to massive areas of land and to many more farmers, but there was no recognition of the impact. That resulted in 48,000 extra holdings, and 360,000 extra parcels of land having to be registered. It is an odd way of weaning an industry off subsidy suddenly to give the subsidy to people who did not have it before, but that seems to be the policy that was adopted. As we have heard, the Government did not adopt the de minimis figure of €100, although that would have taken out 14,000 claimants. Indeed, I would have supported a much higher de minimis figure. As we heard, two months later, it was decided—albeit as a result of pressure—that a third region would be added. That came on top of everything else. Many issues remained unresolved. Those of us who were watching events or were involved at the time were conscious of discussions on what comprised an orchard, and on fruit, vegetable and potato permits and to whom they belonged. All those problems continued while the RPA was allegedly trying to set up the necessary systems. As my right hon. Friend the Member for Fylde (Mr. Jack) said, on 19 January 2005, the RPA announced that payments would be delayed. It is interesting to note that the then Secretary of State, the right hon. Member for Derby, South (Margaret Beckett), said a year later that"““In 2004–05, the RPA met all its key performance targets””.—[Official Report, 2 February 2006; Vol. 442, c. 452.]" As that covered the period when the RPA said that payments would be delayed, it raises the question what performance targets it had apparently met. During 2005 it became increasingly clear what the problems were—the wrong maps sent to the wrong farms. Sometimes even maps from the wrong counties were sent to farmers. As others have said, fields were added to a farm that had been missed off one set of maps, and other fields were missing from the next set of maps. There was chaos, yet according to the public face of Government everything was going well. Ministers, as we have heard, especially Lord Bach, constantly criticised those of us who said that there were problems. He said that we were causing"““unfounded alarm and uncertainty in the farming community””." As early as that same day, 19 January 2005, in the House I called for interim payments. Later that year on 9 June the then Secretary of State said that she was not ruling them out. We know the rest. The Government did not make the decision to introduce interim payments until April 2006, nearly five months into the payment window. Clearly, there were serious problems. I have a number of questions for the Minister about the present, but before I come to those, I want to make one point. The fundamental cause of the problems, aside from the difficulties of managing change, was that no Minister understood the industry that they were dealing with, nor, it seems, did any of the civil servants who were making decisions or giving advice to Ministers. No one seemed to realise the complexity of the dynamic hybrid and that it would take much more time. As the Secretary of State said repeatedly, they underestimated the number of new claims and the amount of land. Given the definition of a farmer that we heard from the Minister a few minutes ago, one wonders why those in DEFRA did not seem to understand how many thousands of people there were out there who, like the hon. Member for South Derbyshire (Mr. Todd), own a few acres of England and might therefore register and claim. It is not just people who own 5 acres. In my constituency, in the horseracing sector, all the stud farms suddenly became eligible. When all the problems were reported, no Minister seemed to have the gumption to go out and ask searching questions about why they were getting all those reports, or to go out to farms to look at the forms that farmers were being asked to fill in, and to see the maps that were being sent round and the chaos caused by inaccurate mapping. The Department was full of urban Ministers with no idea of the industry that they were dealing with. The situation was summed up on 2 February 2006 when, in an oral question, I said that the scheme was complicated, and the Secretary of State replied:"““The hon. Gentleman says that it is a complicated scheme, but that is misconceived.””—[Official Report, 2 February 2006; Vol. 442, c. 454.]" I fear that she did not grasp the complexity of what she was doing. The final insult to the industry was that that Secretary of State, who was ultimately responsible for the chaos and the shambles, was promoted to Foreign Secretary. As somebody might have said, when she had done her worst, the caravan moved on. It is worth pointing out, as other hon. Members have, that Germany also adopted a dynamic hybrid scheme and did not face similar problems, which proves that the scheme itself was not the fundamental problem. In the recent supplementary estimates—this is an estimates debate—the Department has been given £305 million, set aside to cover the costs of the debacle in the form of fines and disallowance from the EU. A recent written answer that I received used the figure of £70 million. In his response, will the Minister give us the Government’s latest estimates of fines and disallowances from the EU for the years 2005 and 2006? If it is as high as the £305 million set aside, that would equate to some 8,500 police officers, which the same rural areas would very much value instead of paying fines to the EU. What is the up-to-date position on claims that are being reviewed? There are 20,000-odd claims for 2005 where we still do not know—and, more importantly, the individuals concerned do not know—whether people are going to get money back or be given any more. On this year’s payments, 75 per cent. by value by the end of March is an improvement on where we have been before, but it is still woefully inadequate for the third year of this scheme. This year, the Government, or the RPA to be more precise, demonstrated that interim payments do not necessarily delay the final payment—one of the excuses given in the past. When we look back, we find that although interim payments were paid for some months this year, once the RPA pressed the button to pay the rest of the money it all went out in about three weeks. I therefore suggest that there is nothing to stop the Government producing interim payments before Christmas this year. The National Farmers Union is calling for 80 per cent., although I believe that EU rules might restrict it to 50 per cent. Certainly, I strongly believe that an interim payment needs to be made before Christmas. That would be proof that this new team of Ministers really wants to make a change for the better. For 20 or probably 30 years, all political parties in this House have called for reform of the CAP, and I am afraid that much of that historical rhetoric remains when we hear about the cost to the taxpayer and increased food prices. Indeed, we heard a little of it from the hon. Member for Luton, North (Kelvin Hopkins). Much of that rhetoric ignores the dramatic change of 2003—the biggest change to UK agriculture policy since the introduction of guaranteed prices in 1947. That was the end of the state fixing, in one way or another, the price that farmers receive. There was a widespread belief, which was obvious in the remarks of the hon. Member for Luton, North, that cutting market support would cut food prices. It is ironic that for two of the major world commodities—grains and milk powder, where there is now little market support—there have been dramatic increases in world prices over the past 12 months, not because of market support but because good old traditional laws of supply and demand. It is odd, given the ““Vision”” document, that in 2003 the Government praised the mid-term review, but then said in 2005 that it needed much more reform. We need to understand that the CAP is as much a social policy as an economic policy. Those who founded it before we joined what was then the Common Market did so for social reasons. In negotiating the changes that we still believe are necessary, it is important that we understand where the others are coming from. The ““Vision”” document clearly failed to do that in substance and in process. Its publication, without any consultation, just two weeks before the budget summit, demonstrated a complete failure to understand the real intricacies of the CAP. I share many of the Committee’s views. It was an ill-thought-out document, it was based on many out-of-date facts, it did not fully recognise the changes that had been made, and the Government had no idea how to make it work. Then there was the incredible hypocrisy of cutting the pillar two rural development money by some €400 million, while at the same time, as we understand from discussions in Brussels, losing the opportunity for a rebasing of the mechanism for spending that money. The Opposition’s view is that the original reform is not sustainable. The budget pressures, including the transition arrangements for the new member states, mean that there will be a reduction in the single payment system by 2012. From the farming industry’s perspective, it is vital that the industry can, sooner or later, hold its head up and stop for ever apologising for and justifying the need to have public money. It needs the ability to plan in the long term—it cannot just turn on the tap and produce more widgets or whatever. Keeping cattle, for example, requires three or four years between an animal being born and it going into production. We need long-term stability, and it has to be based not just on money, which seems to be the guiding factor in the ““Vision”” document. Much more fundamentally, it is a question of what we want from our land. On that point, I agree with the hon. Member for Luton, North: it is a matter for not just rural people, but everybody in this country. More than 70 per cent. of the land in this country is farmland, and what we do with it makes a difference to everybody. There have been great changes since the 2003 review, such as the development of biofuels and the argument about food versus fuel. There has been a drought in Australia, which was the partial cause of the shortages I referred to earlier. Rising demand from India and China, as they become more prosperous, has led to a reduction in world grain stocks, which are now at their lowest level for many decades. Of course, there has also been increasing recognition of the importance of climate change and its many implications. It is a question of not just agriculture’s contribution to climate change, but the effects of that change on agriculture. Of all the crop land in the world, 70 per cent. is at or close to sea level, and is, therefore, very susceptible to the impact of rising sea levels due to climate change. In the UK, 57 per cent. of our grade 1 land is less that 5 m above sea level. We cannot ignore that. The fundamental problem with the ““Vision”” document, therefore, is where it states that"““domestic production is neither a necessary nor sufficient condition for food security.””" That statement should not be a surprise. At the Royal Show in 2003, DEFRA put out a statement saying"““National food security is neither necessary nor desirable””." That approach sits ill with the Government’s view on energy, about which they are rightly much more concerned, but it also ignores the changes in world supply and demand to which I referred. It ignores the issue of the carbon footprint of food, which is distinct from the issue of food miles. It ignores the environmental degradation taking place in other countries in the world in order to produce cheap food for Britain and elsewhere in Europe. By the phrase ““food security””, we mean not self-sufficiency in the old-fashioned way but the capacity to produce a significant proportion of our food. That means retaining the necessary infrastructure and investment so that if the market demonstrates a shortage through the market signal of a rising price, as it is with grain and milk powder, what matters is that we have an industry to respond to such signals—if such an industry is left. That ““if”” is the Government’s responsibility. Land has other roles apart from food production. It plays a role in producing our energy, it is the location of many of our leisure pursuits and it plays a major role in water management through flood prevention, and the retention of water in our wetlands by getting it into aquifers rather than letting it run off to sea. It plays a role in relation to the environment and biodiversity. We need a holistic approach to land management and land policies.