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5.20 pm
Lord King of Bridgwater: My Lords, the Minister has made a brave defence of the present position, but would it be right to interpret the figures and percentages he has given today as suggesting that, even now, as regards the payments that people should have received by June for 2004-05, some 4,500 farmers have received only 50 per cent and 1,500 nothing? Further, is it not the case that as regards the “challenging formal performance target” for next year, referred to in the Statement with the implication that it may be too challenging to meet, it is planned that over 4,000 farmers will get only 50 per cent by June of the coming year? Lastly, because of cost overruns in Defra we have seen extremely worrying accounts about cuts in other Defra expenditure programmes quite unconnected with the RPA. Is it correct that cuts are being made in the Environment Agency, in Natural England and in laboratories within the State Veterinary Service?
Lord Rooker: My Lords, on the last one, no. No cuts have been made in the State Veterinary Service. The other morning, “Farming Today” lined up someone effectively to call me a liar. I have made statements in this House, and they have been made in the other place, to the effect that there have been no cuts in the State Veterinary Service; in fact, it has had £16 million more this year than it had last year, and £3 million was a resource figure swapped over for capital. The total budget stayed the same. I have to knock this one: there have been no cuts whatever. People outside are worried that we are playing fast and loose with food safety and animal welfare. It is simply not true. The State Veterinary Service has not been affected.
On the other issues the noble Lord asked about, the target we have set is the European Union one: to pay 96.14 per cent of the money by 30 June next year. As we said in the Statement, the chief executive has made it clear that he cannot make the full payments by that date and hence we have had to look at partial payments. We paid out to within 1 per cent of that figure by June of this year; some 95 point something per cent of the money was paid out by June. The 4,756 people who have received a partial payment for 2005 should have received 80 per cent of the money because this year’s partial payments were set at that percentage. The top-up is therefore 20 per cent. Obviously it is true that to work to that target next year suggests by implication that there would still be some money not paid out. However, the European Union target is to use the window between 1 December and 30 June to pay out 96.14 per cent of the money. Beyond that, we could be subject to penalties. For this year we have said that where we have not paid out, we will make interest payments from 30 June, and indeed we are doing that.
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Lord Monson: My Lords, first, can the Minister tell us why, according to a letter in yesterday’s Daily Telegraph, the interest paid by the agency on overdue payments is apparently completely withheld if the sum due is under £50? Secondly—here I declare an interest—why is the rate of interest payable only 6.75 per cent when the average rate of interest paid by farmers on their overdrafts is at least one full percentage point above that and possibly more?
Lord Rooker: My Lords, on the actual payment of interest, the Statement made in the summer pointed out that it would never be enough but that we had taken advice on a formula. It was the London bank rate plus 1 per cent, and that was the rate we paid. However, the central point is why no interest is paid if the payment would be less than £50. One of the lessons we have tried to learn in this scheme, and something which has caused a problem, is that some 30,000 to 40,000 of the 120,000 claims accounted for 2 per cent of the money. We paid someone a penny in interest. The computer system is set up for 120,000 claimants and some of those claims are worth tens of thousands of pounds, but elsewhere we are dealing with tiny payments. We have a major problem here because there is no de minimis on the payment. We are going to bring in a de minimis when we are able to do so. It certainly will not be this year and I do not think it will happen in 2007, but we are not going to compound the sin of not having a de minimis payment on the single farm payment by not having one on interest payments. We could have ended up sending out cheques for a few pennies, so that the letter would be worth a couple of pounds less than the stamp. We decided to set a de minimis payment of nothing under £50. That was done in the interests of good administration, otherwise we would have had loads more staff on the job, it would have cost us a fortune to work out and send off the payments, and we would have then been criticised for sending out chicken feed. This is one of the issues that has caused problems surrounding single farm payments in the first place—no de minimis payments.
The Countess of Mar: My Lords, in response to the noble Lord, Lord Livsey, the Minister mentioned all the hard work that is being done on the computer systems. Has the board member who was in charge of IT received a bonus? Did he in any way communicate his concerns about the mess that the computer system was in and the fact that the mapping system and the payments system did not interface with each other? Were Ministers warned of these problems?
Lord Rooker: My Lords, I am in no position to answer the noble Countess. I have been at Defra since May and I have concentrated on the present and the future. I indicated in the Statement that there are four other groups looking at the past. We have released information under the Freedom of Information legislation, so I have had the benefit of seeing some of the RPA information sent to Ministers from last October to March of this year. I have not gone back. I have no doubt the EFRA Select Committee and the
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Lord Jopling: My Lords, the House will recall my interest as a recipient under the scheme. Perhaps I may ask the Minister a question which perplexes a huge number of farmers. They note that the chief executive officer of the RPA was fired; they read in the press within the past couple of weeks that the noble Lord, Lord Bach, has said that he believes he was fired, too, because of the appalling management of this scheme. Why did not the buck stop at the top?
Lord Rooker: My Lords, I am not going down that road. The status and situation of the chief executive officer is being dealt with by the Permanent Secretary of the department. It is a Civil Service management matter and the buck stops there.
Lord Hylton: My Lords, I declare my continuing interest in this matter. The Minister went a little further than the text of the Statement, if I heard him correctly, because I think he said that in February of next year some farmers will receive 100 per cent of their claim. Can he confirm that no farmers will be penalised to the extent of receiving only half where they are not at fault in the way they have handled their paperwork?
Lord Rooker: My Lords, the noble Lord is absolutely right. I refer him back to the exact sentence in the Statement:
“I have therefore agreed with the RPA that where full payments are not possible in the early part of next year, partial payments should start in mid-February for eligible claims above 1,000 euro”.
There is an implication in that sentence that some farmers, as I said, will get a full payment because they will have gone through the second stage of validation by that time. What we cannot do is get enough through in order to promise full payments.
It is not their fault that the second stage of validation will not be ready for everyone—otherwise, quite clearly, the chief executive would not have advised us that he could not complete full payments by the payment window—and no one is blaming the farmers for this. The forms are horrendous but they will get easier as the years go by. Some farmers will receive a full payment, I think that is the implication of the Statement, because they will have gone through the second stage of validation, but the majority will not have and, because of this, we will introduce a partial payment system. The figure is set at 50 per cent because that protects us under the European Union rules for doing this without validating the claim. We have no authority to pay more than 50 per cent if we have not validated the claim. This year, the first year, was slightly different and there was a dispensation of up to 80 per cent for non-validated claims, but that is not available for the second year.
The Earl of Erroll: My Lords, I declare a serious interest in that I am married to a farmer. However, I have talked to many other farmers so I shall not be
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Presumably, next year it will all come down to when these checks are taking place on the ground. I heard that inspectors go round with GPS systems checking the areas. Civilian GPS systems are accurate to around 2 metres to 3 metres only. The countryside boundaries drawn by the Ordnance Survey maps are accurate to only 1 metre, so there is a built-in error. You are expecting mapping to an accuracy of 0.1 of a hectare which is only 1 metre out in a 100-metre long boundary, and many fields are much longer than that. You cannot map to such accuracy so there will be horrendous rows in the future. I suggest that everyone gets a bit more sensible about it.
I know a farmer with organophosphate poisoning who, being very ill, goes in and out of hospital but tries to maintain the paperwork. There is a serious problem in trying to get the right boxes ticked. The unreasonable attitude of the RPA towards small slippages here and there—given that the illness is caused originally by farming—is quite unfair and it ought to take more interest.
I hope that the data transfer system from the RPA to the RDS system in Defra is working and is no longer losing parcels of land when it transfers the data so that you cannot get your entry-level schemes correct. When will the entry-level payments start?
When I find that there are errors of £3 and £10,000, I have no confidence in calculating the exchange rate. There should be no error. If that error is consistent across the whole £1.5 billion figure, someone is filching £450,000.
Lord Rooker: My Lords, I am not in a position to answer the noble Earl on his last couple of questions, but I will get some advice on them.
I fully accept that some people have difficulty filling in the forms. The window for filling in the forms for 2006 closed some time ago—in fact, the EU gave us an extra month for that in the summer because we had sent the forms out late. We want to make sure that we do not send the 2007 forms out late; we have been discussing that with the stakeholders in the farming industry so that we can do that a lot earlier. However, I also know a lot of farmers—not all of them—who get specialists to fill in their forms for them. You are required to do that but I understand that if people are ill, that can cause difficulties. There is no easy answer.
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On the accuracy of mapping fields, I said in the Statement that the initial validation had gone relatively smoothly. I then said:
So I have no reason to believe there is any difficulty with the inspections.
On the noble Earl’s first question, interest is indeed being paid. It can only be paid once the full payment is known about, because we are paying interest on the delayed payment from 30 June. It is only on the final calculation that we can pay the interest. Farmers have received interest payments where we have made the full payment since 30 June. We will not pay the interest until we know what is due and we cannot know what is due until we have made the final payment. There is a delay in a few cases, as the Statement makes clear.
Lord Monson: My Lords, may I press the Minister again on de minimis interest payments? I agree with him totally that it is not cost-effective to send out cheques for 2p or 3p or even £2 or £3. However, he will be well aware that, when the boot is on the other foot, the Inland Revenue sends out tax demands for 5p or 10p, having abandoned their previous £30 de minimis figure. Does he agree that a £50 de minimis is quite unusually high? Would it not be much fairer to reduce it to something like £20?
Lord Rooker: No, my Lords, I do not accept that. We are sticking to that payment for good administrative reasons which are also value for money.
Charities Bill [HL]
5.34 pm
Lord Bassam of Brighton: My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Lord Bassam of Brighton.)
Lord Hodgson of Astley Abbotts: My Lords, today is Tuesday 7 November in the year of Our Lord 2006. At the first Second Reading of this Bill, as long ago as 20 January 2005—nearly two years ago—the noble Baroness, Lady Scotland, said:
“One of the most important contributions that the Government can make to facilitating and promoting activities of the charitable sector is to create a modern legislative framework for it . . . By reforming the legal and regulatory framework for charities, the Government will enable people to use charities as a means to make a difference. The Bill will help existing charities to thrive, grow and realise their full potential”.—[Official Report, 20/1/05; col. 883.]
Sadly, the Bill could not complete its passage before the general election was called.
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At the Bill’s second Second Reading on 7 June 2005—a mere 18 months ago—the noble Baroness said:
“The Government believe that a thriving charity sector is a cornerstone of a healthy society”.—[Official Report, 7/6/05; col. 783.]
Given those remarks and the fine words that the Government use about the voluntary sector, the subsequent progress of the Bill—or lack of it—is very surprising. After that Second Reading in June 2005, there were a couple of days in Committee and on Report, in July and October respectively, with Third Reading on 8 November last year. Since that date—one year less one day—we have heard nothing. The Bill has disappeared into some legislative black hole. It has only now emerged, with two days to go before the end of the Session if we are to avoid the extraordinary spectacle of the Bill failing and falling for a second time. The Government owe the House and the charitable and voluntary sector an explanation of why their behaviour on the passage of the Bill has been so dilatory.
Lord Shutt of Greetland: My Lords, I return to the Bill, having been here before, as the noble Lord, Lord Hodgson, mentioned. I thought that there was about to be a deal prior to the general election, but it did not come to pass. I am disappointed that it has taken all this time, but let us rejoice that the Bill is before us and we can see it home today.
My noble friend Lord Phillips of Sudbury is sojourning in Sudbury and is not presenting himself here further. I think that that is a sad affair, but that is his decision. That means that I return to the Bill. I was with it the first time round but not the second. I suppose, having returned to it again, that I ought to declare my interests. I am a trustee of the Joseph Rowntree Charitable Trust and the JRSST Charitable Trust, and am vice-president of the Community Foundation for Calderdale. I welcome the Bill’s return today.
Lord Bassam of Brighton: My Lords, this is a bit of general knockabout, so I will treat it with the respect it deserves. The noble Lord, Lord Hodgson, could probably tell your Lordships better than I why the Bill was delayed at all first time round. We thought it was uncontroversial legislation. We had given it a thorough bout of House of Lords scrutiny and we thought that our colleagues at the other end, just prior to the 2005 general election, would happily see it through. Then, when the opportunity was presented to have a definitive piece of charity law on the statute book, the Conservatives in another place, for reasons best known to themselves—perhaps they saw some controversy in it that we at this end did not see—decided to knock it on the head and kill it off. That was a great shame because we have, as a consequence, spent a lot longer getting to this happy point of putting this legislation to bed and seeing it happily on its way.
The delay is regrettable in the sense that the parliamentary process has taken rather longer than it should have, with timetabling, and so on, but it has
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On Question, Motion agreed to.
1: Clause 2, page 2, line 22, at end insert “, or of the efficiency of the police, fire and rescue services or ambulance services”
Lord Bassam of Brighton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. I shall spend a little time on the amendments, because the group includes an amendment which the noble Lord, Lord Hodgson of Astley Abbotts, intends to move. Within this small group, Amendments Nos. 1 and 3 go together and Amendment No. 2 stands on its own.
Noble Lords will recall that when this Bill was in your Lordships' House last year, the noble and gallant Lord, Lord Craig of Radley, put forward a powerful case for adding as a specific category of charitable purposes,
The Government accepted the force of the noble and gallant Lord’s argument and made an amendment to include his proposed category, which is Clause 2(2)(l).
A similarly powerful case was put more recently on behalf of the police to my honourable friend the Parliamentary Secretary in charge of the Bill by the Police Dependants’ Trust and by the Commissioner of the Metropolitan Police among others. They advocated the inclusion in the Bill’s list of charitable categories of,
The Government agreed to its inclusion and the amendment was duly made. I should emphasise that this amendment does not change the law, since the promotion of the efficiency of the police can already be charitable, but it is of considerable importance to the police service that its status and its importance in national life be recognised alongside that of the Armed Forces. The chief executive of the Police Dependants’ Trust has written to my honourable friend to express his and his trustees’ delight with the amendment.
It would have been invidious to have included the police without also including the other two emergency services, so the provision at which the Government arrived, which is Amendment No. 1, covers the police, the fire and rescue services, and the ambulance service. Amendment No. 3 provides a definition of “fire and rescue services”.
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Amendment No. 2 is on the different subject of sport. The Bill includes as a category of charitable purposes “the advancement of amateur sport”. When it left your Lordships’ House last year, “sport” was defined in that context by Clause 2(3)(d) as meaning,
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