Government to pay interest on late farm payments
Farmers who have waited months for their government subsidy payments will receive interest on all money delayed beyond the end of June, David Miliband has announced.
The environment secretary apologised for the “real distress” caused in the past year by the delays to the single payment scheme (SPS), but said that more than 90 per cent of funds – about £1.38 billion – had now been paid out to at least 100,000 applicants.
However, he admitted there were about 2,300 claimants who had outstanding payments of more than 1,000 euros (£700) but who had yet to receive any money, and urged the Rural Payments Agency (RPA) to deal with these cases swiftly.
He announced that any sums paid out from the SPS from July 1st would receive an additional one per cent interest on top of the base rate, where the delays were found to be the fault of the RPA.
“I recognise the hardship involved for them and deeply regret the distress caused,” Mr Miliband said in an oral statement to the House of Commons.
“The RPA is taking further steps to pay these complex claims, including discussing issues direct with claimants and, where feasible, bringing parties together in cases of continuing disagreement. The RPA has written twice to all individuals concerned.”
The SPS was introduced in 2003 as a simpler way of getting European subsidies to English farmers and payments were due to be given out to this February.
But the system has been dogged by controversy – the former head of the RPA was sacked over the delays, while farming minister Lord Bach has also been fighting off calls for his own resignation.
Peter Kendall, president of the National Farmers’ union (NFU), said it was “good to get an acknowledgment” about the difficulties experienced by English farmers in the last 12 months.
He also welcomed the government’s decision to pay interest on money given out later than June 30th, which is the final European deadline for payments for 2005, but warned that it fell far short of the costs caused by the delays.
“The announcement that the government will pay interest is welcome in that it goes someway towards recognising the costs of late payments,” Mr Kendall said.
“However, interest at one per cent over base bears no relation to the true cost of delayed payments to the farming industry.”
Liberal Democrat environment secretary Chris Huhne was also dismissive of the offer, saying it was a “miserly offering which fails to address the real cost and suffering caused”.
He added: “The government has announced compensation with a gun to its head. Bungled single farm payments led to several official complaints almost certain to result in compensation payments by obligation, not volition.”
