HL Deb 02 November 2001 vol 627 cc1642-6

11.44 a.m.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty) rose to move, That the draft regulations laid before the House on 16th October be approved [6th Report from the Joint Committee—].

The noble Lord said: My Lords, in discussing the regulations I shall, with the leave of the House, also touch on the two subsequent orders—the draft National Assembly for Wales (Transfer of Functions) Order 2001 and the draft Northern Ireland Act 1998 (Transfer of Functions) Order 2001, which deal with consequential matters.

The purpose of the Intervention Board for Agricultural Produce (Abolition) Regulations 2001 is to abolish the intervention board and to transfer its properties, rights and liabilities. They will go mainly to the Secretary of State for Environment, Food and Rural Affairs; others will be divided between the Secretary of State, Scottish Ministers, the National Assembly for Wales and the Department for Agriculture and Rural Development in Northern Ireland. As a consequence, the regulations will repeal Section 6(1) and (2) of the European Communities Act 1972, and amend Section 6(3), (4) and (5).

The regulations also provide powers and make consequential amendments to other primary and secondary legislation to ensure that we can continue to carry out the UK's obligations under the common agricultural policy, which were previously entrusted to the board. Other legislation and administrative action will ensure that the obligations are carried out by the RPA—the Rural Payments Agency.

The purpose of the National Assembly for Wales (Transfer of Functions) Order is to transfer from the Secretary of State for Wales to the National Assembly all the non-statutory functions with which the Intervention Board for Agricultural Produce was charged in relation to Wales prior to the abolition of that board. Those are mainly functions in relation to the CAP. Article 3 of the order provides for the exclusion from transfer of certain property that would otherwise transfer to the National Assembly.

My department has maintained close contact with the National Assembly throughout the process and it, like the other devolved administrations, is fully on board with regard to the proposals. The National Assembly welcomes the improved service that that reorganisation will bring to Welsh farmers and traders.

The purpose of the Northern Ireland Act 1998 (Transfer of Functions) Order is, likewise, to transfer the relevant functions from the Secretary of State to the Northern Ireland Minister of Agriculture and Rural Development, who will then delegate such functions as she considers appropriate to the Rural Payments Agency. She has already agreed to proceed in line with the other jurisdictions and welcomes the improvement in service that the reorganisation will bring to Northern Ireland.

All of the instruments are therefore part of the process that will set up the RPA and ensure that its customers see no break in the continuity of service. The creation of the RPA is a significant part of the Government's modernising agenda. It brings together the administration of CAP grants and subsidies schemes, which were previously divided between DEFRA—formerly MAFF—regional offices and the intervention board. It handles and accounts for £2 billion of CAP payments. The RPA is an executive agency of DEFRA. It will deliver customer services against a clear set of objectives and targets and it will demonstrate clear lines of accountability and responsibility. As an executive agency, DEFRA and the Secretary of State will ultimately be accountable for the RPA.

On 24th July 2000, my right honourable friend Nick Brown, who was then the Minister responsible for agriculture, announced that he intended to make a number of changes to the regional structure of the former MAFF, including the creation of a new paying agency. In that context, "paying agency" is a term of art for an organisation that pays and controls CAP expenditure in accordance with EU rules. He also wrote on the same day to all Members of Parliament whose constituencies included former MAFF regional service centres and to others who had previously written to let them know of the sites that had been selected for the new paying agency.

More recently, in September, I wrote to stakeholders outlining the new regional structures in DEFRA. Since then, more detailed information has been provided in a leaflet that was sent out and displayed in a dedicated website.

The 16th October was also the first day of the CAP financial year and was therefore the day that the RPA started to operate as an accredited EU paying agency. From that date, until this order comes into force, the agency has operated as a joint enterprise between the intervention board and DEFRA under a single management structure. The RPA has set out to modernise the way in which CAP payments are made by 2004. It will make major investment in new technology so that farmers and traders can submit claims electronically and the RPA, in turn, can provide advanced electronic processing capability. This is a direct response to concerns expressed by farmers and others about the bureaucracy required to access CAP funds. The work of creating the RPA has taken account of these views and will continue to do so in fine tuning the agency's procedures.

The RPA has embarked on a major programme of change. Risk management and the maintenance of the business community are the keys to its success as it restructures and moves on to new systems. The RPA is taking a staged approach over three years to safeguard the department's business interests and ensure minimum disruption for customers and staff. The RPA intends to provide a single point of contact and a dedicated customer service centre. Staff are looking at the options for the structure of this centre and at the technology it needs. Farmers and traders will also benefit from more efficient and rapid processing of payments with the achievement of a 95 per cent electronic delivery capability by 2004. The RPA does recognise that some customers will be unwilling or unable to use these electronic services and we shall work to ensure that we can address those barriers systematically. There will also be significant benefits for taxpayers with a 10 per cent cut by 2004 in unit costs of administering payments and further savings in subsequent years.

The RPA currently employs some 3,500 staff at 11 sites with its headquarters in Reading. Once the change programme has been completed, the number of RPA offices will have been reduced to five; Reading, Carlisle, Exeter, Newcastle and Northallerton. The department is committed to finding staff jobs and minimising the risks of redundancies. The other sites will not close. The creation of the RPA is only part of a programme of DEFRA regional restructuring and some sites will be used by other DEFRA staff, particularly in the new Rural Development Service. Some staff will transfer to Government Offices whose role in rural affairs has been enhanced following the recommendations of the Performance and Innovation Unit. Both the Rural Development Service and Government Offices have played an important role in the post-FMD recovery programme.

These instruments are an important part of a major restructuring in the way in which the Government deliver services to agricultural, rural and trading communities. I commend the regulations to the House.

Moved, That the draft regulations order laid before the House on 16th October be approved [6th Report from the Joint Committee].—(Lord Whitty.)

Lord Bruce of Donington

My Lords, can the noble Lord inform the House of the extent to which the European Court of Auditors and our own Audit Office have been kept informed of these developments?

Lord Whitty

My Lords, as far as the European Court of Auditors and the European Commission are concerned, the designation as a payment agency of the new RPA for European Union purposes has been cleared with all European institutions. As an agency for DEFRA, as far as national auditing arrangements are concerned, it is subject to the same provisions as any other part of a government department.

Lord Glentoran

My Lords, I thank the Minister for bringing this instrument before the House today. He will not be surprised to hear me say that I welcome it. There is no doubt that the intervention board was a shambles and a seriously over-bureaucratic, incompetent organisation which had lost the confidence of the farming community and the industry as a whole. Good riddance to bad rubbish and a cautious welcome to the Rural Payments Agency. Cautious, because it is based on high technology. Your Lordships' House will remember the awful shambles created by the introduction of new technology in the Home Office's passport system and the Ministry of Defence's computer systems. Let us hope that the Government's consultants have got this right and that we shall see a seriously improved payments system. The RPA has a seriously uphill job to win back the confidence of the agricultural community. I wish those involved luck but they will need to perform extremely well from day one. In principle, we welcome the measure.

Lord Dholakia

My Lords, I also welcome the regulations from this side of the House. The other place identified a number of problems with the intervention board and I am not surprised at its abolition. I endorse what has been said. The farming industry will be delighted to see its abolition. Will the new arrangements that the Government are proposing perform more effectively and efficiently? We would wish to be assured that this is not simply a change in name but that real changes will be made in the way the new body carries out its duties.

Lord Whitty

My Lords, my apologies for breach of procedure in responding immediately to my noble friend, Lord Bruce of Donington. I welcome the support of the noble Lord, Lord Glentoran for the regulations. The noble Lord is a little harsh on the intervention board but there were problems and we have moved on to a better system. This will allow not only for the introduction of new technology but also for the bringing together of things previously done by the department and by the intervention board so that there is one port of call for farmers. It will concentrate payment schemes in one place so various economies of scale can be achieved.

I take the point of the noble Lord, Lord Glentoran, about the not entirely unblemished record of the introduction of computer systems into various parts of the public sector, but we do believe that this is a robust system. There will be parallel systems operating in the early days to ensure we do not run into problems. The only caveat I enter concerns the noble Lord's reference to "day one" which has just passed administratively and will today pass legally.

The staff of the intervention board and of DEFRA and now the staff of the RPA have suffered from diversion to foot and mouth activities over recent months and in many areas that has not yet ended. We are not therefore at optimum staffing levels. One hopes that that will be over within a reasonable period and staff can then concentrate on delivering this service to farmers and traders. I believe the objectives of improved efficiency to which both noble Lords referred will be achieved, but we have to allow a little time for the body to settle down. I am grateful for the support from all sides of the House for this structural change and for the support of the industry for what we are attempting to do.

On Question, Motion agreed to.