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Lord Roborough
To move that this House takes note of the impact of the Government’s economic and planning measures on farming and rural communities.
Lord Roborough (Con)
My Lords, I draw attention to my interests as a dairy farmer; landowner; forester; natural capital, residential and renewables developer; and investor in natural capital businesses Cecil, Circular FX and Agricarbon and other farming-related businesses such as Deere, SLC Agricola and Anglo-Eastern Plantations. I am most grateful to my parliamentary party for making the plight of farmers and rural communities a top priority and allowing time for this debate today.
The list of negative spending and taxation decisions by this Government on farming and rural communities is long. The cumulative impact is devastating on the financial and mental well-being of farmers in particular but also the wider rural community. The reduction in inheritance tax reliefs under agricultural property relief and business property relief remains a hugely emotive and damaging subject. We remain puzzled why this was necessary, given that the Treasury expects to raise only £500 million per annum, and it will be only a transitory gain as tax-planning options remain open to reduce or eliminate this exposure, as Government Ministers have themselves conceded.
A small cohort of currently elderly farmers, sufferers of serious illness or victims of mortal accident will be caught by this capricious decision. There is a high risk that those who reasonably assume that they would not live either for the seven years needed to time out potentially exempt transactions, or even the four and a half years until the next election, will take the timing and manner of their death into their own hands. I have asked repeatedly whether the Government will keep and publish timely data on suicides by farmers and family business owners in the run-up to the reduction of these reliefs and have received a negative response each time. Will the Minister review this denial?
It seems particularly cruel that the £10 million mental health support fund for farmers has been shelved, despite the noble Lord, Lord Livermore, suggesting that mental health support is there for farmers should they consider taking control of the timing of their deaths. The massive reduction in delinked payments, which will be subject to a regret Motion later this month, as well as the abrupt closure of the sustainable farming incentive scheme, leaves many farmers in a dreadful position. Those who were trapped in the long-term higher-level or Countryside Stewardship schemes and unable to access sustainable farming incentives are hit with the delinked payment reduction without any offset. Those who were counting on new SFI income this year to replace old schemes that had ended are even harder hit. This does not appear to be a way to run a Government, whereby decisions are made that lead to considerable unfairness in outcomes and the unlucky lose financial viability.
In answer to my Written Question, the Minister replied:
“We remain committed to investing £5 billion of funding in the farming budget this year and next … We are on track to spend all the funding that is available”.
This seems hard to square, given that the National Farmers’ Union estimates that £400 million was saved by the steep reduction in delinked payments, yet only a few months later SFIs are cut off at a moment’s notice. Evidence given to the EFRA Committee by Defra Ministers and officials appeared to suggest a deliberate intention to ignore the six weeks’ guidance. Can the Minister also assure us that the £200 million investment in the Animal and Plant Health Agency’s Weybridge laboratory is not coming out of the farming budget? I wonder whether she is also able to tell us how much of that farming budget actually ends up in the hands of farmers, not in administration or projects run by others, and not in infrastructure nor arm’s-length bodies.
The £100 million rural service delivery grant being redirected to deprived urban areas, despite the widespread rural issues and the higher cost of living in rural areas, perhaps signals where this Government’s focus is. Farmers are having to contend with these capricious decisions and their often life-changing impacts while also dealing with massive inflationary pressures, low grain prices and increases in employers’ national insurance contributions and minimum wages. It has been suggested by the Government that the new SFIs that are planned are likely to require the land use framework to have been published. The Minister has indicated in a reply to my Written Question that
“the publication of the Land Use Framework”
will be
“this year. A timeline for publishing the Land Use Framework will be set out in due course”.
Could she confirm whether the publication of that framework will be necessary prior to the publication of new SFIs and what that might mean for their timing? A department official has suggested in front of the EFRA Committee that details of future SFIs would be with us in July. Can she confirm that?
The second prong of the attack on farmers and the rural community comes from planning, whether by displacing agricultural production on prime agricultural land with solar farms and other energy infrastructure, or the enhanced compulsory purchase order powers in the Planning and Infrastructure Bill. We on these Benches are broadly supportive of the Government’s housing ambitions, but there is no reason why they need to come at the expense of the rural community.
Land-owning farmers are threatened with compulsory purchase of their land at values that do not represent market value, as the value of alternative uses will be disregarded. Taking part of a holding often undermines the viability of the whole and, while the price paid may reflect the agricultural value, that is unlikely to be enough to replace that land locally—even if such land is available. It is hard to understand what is wrong with the current valuation framework that ensures fair payment for land. It is also hard to understand how this can be consistent with the ECHR on confiscation, as the Government claim on the face of the Bill.
Further to this, the role of Natural England becomes terrifying. As drafted, the Bill confers enormous powers on Natural England to CPO whichever land it chooses to fulfil its environmental delivery plans. Why does Natural England need these powers? Why can it not simply offer to pay landowners to carry out the work or deliver the services that are intended in these EDPs? Surely, there is a choice of sites where such work can be undertaken and that can introduce competition in service delivery while allowing value to be delivered in the EDPs. I fail to understand how nature restoration levies can possibly be well used by Natural England to CPO land as it sees fit. It has not been necessary to nationalise sites of special scientific interest to protect them. Just how large should we expect these nature restoration levies to be?
We on these Benches fundamentally believe in reducing the size of the state. However, capricious short-term spending and taxation decisions are not the way to do it. We want to see a vibrant rural economy, financed by fair payment for the public goods being delivered, as well as the traditional food and timber outputs from rural land. We see numerous ways of delivering this—but without killing the patient before the cure is administered by withdrawing funding before a replacement is available.
When will the Government make a decision on the inclusion of woodland carbon units in the emissions trading scheme? The noble Baroness has previously said “in due course”, but the consultation was launched last summer and surely cannot be very complex. The additional financial incentives would encourage new tree planting to meet and even exceed targets. Our climate is perfect for healthy, vigorous establishment and growth in trees. Our target of 16.5% tree cover, as I have previously said from the Back Benches, is unambitious, and our progress even to that is very disappointing. Trees capture significant quantities of atmospheric carbon, replace high-carbon emissions materials in building, reduce peak flow rates in flood events, help to purify water and benefit biodiversity. Surely, we must do everything in our power to increase this tree cover. The Government’s own chief executive officer of the Forestry Commission, Richard Stanford, eloquently explained these benefits to the APPG on Forestry and Timber Security, as did the Woodland Trust team to the APPG on Woods and Trees.
When can we expect mechanisms to allow water companies to pay for the flood mitigation and water quality improvements that regenerative farming, peatland restoration and new woodland planting deliver? When will action be taken to solidify the strong position of the woodland carbon code and the peatland carbon code by certifying them under the Integrity Council for the Voluntary Carbon Market? How will the Minister incentivise the private sector to pay for nature restoration and biodiversity protection and improvement? Surely the planning Bill is a golden opportunity to move forward on this, beyond our own biodiversity net gain measures on a larger scale. Why are we squandering this opportunity by giving it to Natural England? Would the Government consider tax incentives to encourage private investment in nature restoration, or even changing the rules on bidding for government contracts to require companies to invest in it?
Farmers and the wider rural community deliver unquantifiable value to our country; feeding us, protecting and restoring nature, sequestering carbon, growing timber to displace the 73% that is currently imported, protecting our archaeology, looking after our fresh water, maintaining our countryside for access and removing litter. Most of these public goods are not paid for at anything like their true value—if at all. This is simply not sustainable for the rural community. For the farming and rural community to move forward with confidence, existing spending commitments cannot be changed overnight and random new taxes imposed. The rural community needs confidence that this Government are committed to ensuring that these public goods will be paid for. I very much look forward to the insights of all other noble Lords in this debate and the Minister’s response. I beg to move.
Lord Davies of Brixton (Lab)
I look forward to this debate and thank the noble Lord, Lord Roborough, for introducing the issues that clearly need to be addressed. I look forward to my noble friend’s response. I am a sort of bookend in this event. I have come as much to listen and learn as to provide definitive information.
I am not a farmer—my father decided that he did not wish to take over the family farm; he was a qualified chemist—but, because of that farm, to a limited extent I feel I have a sense of the cultural hold of being from a farming background. I still occasionally visit the land that was ours and feel a sense of attachment—so I get that. It is important that government policies recognise the cultural content of farming and agriculture. In general, however, what we need are economic and planning decisions that support farming practices that deliver benefits for food production, biodiversity and climate resilience, while at the same time maintaining the countryside that we all know and love.
I thank various organisations and the Library for their helpful briefings. They include the Nature Friendly Farming Network, the World Wide Fund for Nature UK and the Campaign to Protect Rural England. I assume that there are parallel organisations in the other nations of the UK. They all emphasise the vital role of public funding, planning and infrastructure in creating and maintaining thriving rural landscapes while meeting our shared environmental goals and, not least, in achieving a successful and thriving agricultural industry.
In introducing the debate the noble Lord, Lord Roborough, outlined a number of major concerns, including the compulsory purchase of land to meet our housing targets. Clearly, this has to be undertaken in a way that does not work against the general objectives that I laid out. The issue of what should be paid for land—the enhanced market value with planning permission for housing, or its value as agricultural land—is important and I fully support the Government’s approach to that.
The most contentious issue has been the inheritance tax reforms. In any debate on this issue, you have to recognise that the problem has been created by the inheritance tax system. In general principle, I see no reason why particular groups should be absolved from their responsibility to pay part of their wealth following their death, to the general good. I support the concept of inheritance tax, and I do not see any reason in principle why the agricultural industry should be exempt. However, going back to the point I made earlier, the cultural significance of the family farm is a real factor and any changes we undertake have to recognise that.
Those who have read the financial pages over many years will know that there is a general view that inheritance tax is a voluntary tax and, in order to avoid it, you have to make changes to the way history and tradition have required farmers to behave. That will take time to adjust to, but we have asked many other communities to make cultural changes, and I see no reason why farmers should be exempt from that objective.
I support the Government’s farming initiatives, and I look forward to the publication later in the year—I hope my noble friend will cover this—of the 25-year farming road map. I look forward to hearing other speakers.
The Lord Bishop of St Albans
My Lords, I too am grateful to the noble Lord, Lord Roborough, for securing this debate and for his excellent opening speech. I declare my interests as president of the Rural Coalition and a vice-president of the Local Government Association.
I have already spoken in your Lordships’ House on changes to the agricultural property relief and business property relief, so my views are already recorded in Hansard. I lament the sudden closure of the sustainable farming incentive, and the reforms to compulsory purchase in the Planning and Infrastructure Bill.
If your Lordships’ House will indulge me, I want to focus on two associated areas which are pertinent to this whole debate. First, the rural economy has great potential to contribute to the economic growth that is needed. I think we all believe in this; it is just a matter of how we achieve it. Secondly, I will make a few comments about the almost complete lack of strategic rural policy or effective rural-proofing in government decision-making.
It is very easy for us to sit here and talk about the things we do not like—we spend a great deal of time doing that—but I am proud to be president of the Rural Coalition, which has tried to work alongside government over many years to put some positive ideas, initiatives and facts and figures on the table to help us achieve the growth in the rural economy that we believe we need.
I want to mention the Pragmatix report that we commissioned, and which some noble Lords will have read, entitled Reigniting Rural Futures. This report evidences the extraordinarily large productivity gap between rural and urban areas and the billions of pounds that are lost through chronic underinvestment in rural infrastructure and services. We made an economic case that, with the right policies in place, the rural economy could contribute up to an additional £19 billion in tax revenue for the Treasury. That would, of course, mean addressing the digital divide, rural transport, access to banking services, the rural affordable housing crisis and fair funding for rural local authorities. Yet none of His Majesty’s Government’s policies in these areas mentions or accounts for the needs of rural communities.
Despite 1,254 respondents to the question about rural affordable housing in the NPPF consultation, the Government have provided no guidance on the delivery of affordable housing in rural communities. The Planning and Infrastructure Bill also misses the opportunity to implement changes to help deliver small rural housing sites. The Bus Services (No. 2) Bill, which contains many good provisions and for which I am very grateful, needs to implement cross-subsidy between rural and urban areas to account for the additional costs generated by sparsity.
This year’s local government funding settlement once again leaves rural local government underfunded, with urban areas receiving 40% more per head in government funding spending power than their rural counterparts. This comes on top of the additional costs of delivering services due to sparsity. I urge His Majesty’s Government to address these issues in their review of the funding formula, to recognise that density of deprivation is not the only factor that affects the costs of service delivery, and to level per capita spending power across rural and urban authorities.
The word “rural” is not mentioned once in the industrial strategy Green Paper. From a series of Written Answers, I can only conclude that the rural industry is not really being considered in the Government’s drive for growth. What a waste. The Government urgently need—indeed, it is vital—to develop a coherent rural strategy and ensure that all policies across the board account for and involve rural communities. If these communities are left behind again—20% of the population live in rural areas and over 500,000 businesses are registered there—we will all be the poorer for it and the entire nation will lose out.
Baroness Shephard of Northwold (Con)
My Lords, I congratulate my noble friend Lord Roborough on calling this debate. It is, as ever, a pleasure to follow the right reverend Prelate, who brings a depth of knowledge and experience to this subject.
It is right that the Government be held to account for the seemingly reckless way in which they are dealing with the farming industry and rural communities. As the right reverend Prelate said, they are home to nearly one-quarter of our population. The other issue I wish to raise is the danger to our food security at this unprecedented moment for global trade.
The Labour manifesto promised to champion British farming. Instead, from the farmer’s point of view and the point of view of rural communities, Labour seems to have launched a series of crippling blows on farming, starting with the Budget changes to inheritance tax for farmers. That is going to cripple British farming and prevent investment and growth in the rural communities.
The noble Lord, Lord Davies, raised a really interesting point about assets and their taxation. I certainly believe that the so-called assets of land, machinery and livestock are not an indication of farmers’ wealth but the essentially means for them to earn a living. You cannot have a farmer without him owning or renting land. They care for 70% of our countryside and grow 60% of our food, as has already been mentioned in the debate.
I do not want to blame the Minister; I never do. She and I know where the real culprit lies, but the effect for farming and the rural community is the same. The latest bombshell was dropped on 11 March this year, with 30 minutes’ notice, announcing that the sustainable farming initiative was closed to new applications. This was at a moment when many farmers were still preparing their applications, having been assured by Defra that if there was to be any change in the procedure, six weeks’ notice would be given—another broken commitment.
The SFI was launched in 2017. It had all-party support. Its purpose was to help farmers transition from straight subsidies to grants for introducing more sustainable methods. In 2022, Daniel Zeichner MP—then shadow Minister for Agriculture—castigated the then Government for dragging their feet, demanding a commitment to long-term funding for it and a guarantee that goalposts would not be moved. Daniel Zeichner MP is now the Minister for Agriculture in the other place, and I am not sure what he is saying now. Have the Government scrapped the SFI? Do they intend to? If so, what is to replace it?
I hope the Minister will be able to enlighten us on that and, in particular, on how the Government plan to support our agricultural productivity and resilience when climate change, environmental insecurity, geopolitical events and now in particular tariffs make the whole issue of our food security a major concern. On the day after “liberation day”, will she be able to explain to noble Lords how her Government propose to deal with tariffs if, as seems likely, they will affect agriculture? Was Nigel Farage MP telling us something when he said last week that he welcomed the import of chlorinated chicken?
If the Government are planning for such eventualities, why, by their taxation and other policies already raised by noble Lords, are they reducing farm incomes, prosperity and growth in our rural communities? They should be supporting the vital stability of our food security, not diminishing it. I hope the Minister can reassure the House. She always listens carefully and takes note of the argument. Dare I wish her a happy Easter?
Lord Grayling (Con)
My Lords, it is a particular pleasure to follow the noble Baroness, Lady Shephard, and to very much agree with what she said about food security. I congratulate my noble friend Lord Roborough on securing this debate.
Underpinning what the noble Baroness, Lady Shephard, said about the need for food security is the need to see a clearer strategy for our countryside, our farmers and our rural communities. We have seen none of that so far since this Government took office, and we desperately need it right now because, as the Chancellor rightly said last week—one of the few sensible things she has said recently—the world has changed. We cannot be certain that we will always be able to import all the food that we need. We cannot be certain that we will not see a further period of geopolitical instability. Therefore, the need to protect in particular our most productive land in this country is of paramount importance.
Right now, we are trying to grow our food, generate our electricity, protect our nature and build our houses all in the same land spaces. We cannot do it in a haphazard way; it has to be done carefully, strategically and thoughtfully. So the first thing I say to the Minister is: please can she and her colleagues in government work this through in a much more careful way than has happened up to now? There are some very practical examples. We should not, for example, be building solar farms on our most productive agricultural land. There is clearly a place for solar power in this country, and there is a lot of land that is of second-degree or third-degree usefulness, where there is a genuine opportunity to do more with it. But we should not use our most productive land for this purpose.
Likewise, there is a need to build more housing, but the easy option for housing development is always just to build new houses on greenfields, which is by far the easiest option for developers—but we should not be taking the easy option. There are plenty of avenues in this country for us to pursue smarter urban development. It is a matter of great regret to me that this Government do not seem to believe in urban development as a core part of meeting the housing needs of the future. The targets for our big city areas have not risen in anything like the same way as the rural areas, the areas on the fringes of our cities and the areas of green-belt land. I saw this in my former constituency, where there is a real opportunity to build on brownfield land and to densify the developments already there—not just to build on the green spaces.
There is also the very important task of restoring our biodiversity, which I believe the current Government, like the last one, want. We have to be smart about how we do that as well. There are disappointments in the Government’s approach to our farmers. The previous Government were right—although they did not get the detail right—to try to empower our farmers to do more to protect the countryside of which they are stewards. I do not see the way in which the current Government are approaching things such as the SFI as reflecting an understanding of the role that farmers can play. There really has to be a more holistic, more strategic and more thoughtful approach to how all this happens.
I will make one point in particular to the Minister. It drives to the heart of the question of how planning goes forward in our rural areas, whether it is about housing or onshore wind—I am not a great fan of onshore wind, but the Government have taken the decision to pursue it—and how all that fits with the challenge of restoring biodiversity. It is the issue of corridors for nature. We have to understand that whether it is wildlife on the ground or birds in the air, putting development in the wrong places has a materially negative impact on nature’s ability to recover. So my final point is: as the Minister works with her colleagues in MHCLG and across government, as they set guidance for local authorities and as they put in place all the different measures they are looking at to drive growth in energy and housing, it is of paramount importance that they also reflect the realities of local nature recovery. If we do these things in the wrong places—if we erect wind farms in the middle of bird migratory routes or if we build housing estates in the middle of migratory routes for species on the ground—we will go backwards, not forwards. What we need from this Government is a holistic strategy. So far, sadly, we have not seen it. I hope the Minister can deliver it pretty soon.
Lord Kakkar (CB)
My Lords, I join other noble Lords in congratulating the noble Lord, Lord Roborough, on securing this important debate and on the very informative way in which he introduced it. I do not come from a farming or rural background, but the territorial designation that attends my peerage is a small hamlet in Mid Devon, Loxbeare, where my father-in-law is a sheep farmer. Over the past 35 years, I have come to understand in some way the powerful communities that exist in these small farming areas, and I have come to greatly respect them.
His Majesty’s Government have a range of economic policies, and they will inevitably impact all parts of the country, including rural areas. But the impact of policy on health outcomes, and population health outcomes in particular, is frequently neglected. We know that in rural communities, health outcomes differ. There is an assumption that because the countryside is beautiful and people can get out and about, they will in general be healthier and live longer. But there are substantial disparities in outcomes. We have heard of the higher suicide rate experienced in farming communities in comparison with many urban communities, but there are also disparities in other health outcomes and, importantly, there are inequalities in access to healthcare facilities.
For instance, 51% of rural populations live over an hour’s travel distance from their closest hospital, compared with only 8% of urban populations. Some 43% of rural populations are within half an hour’s walk of a general practice or primary care facility, compared with some 95% of urban populations. So there is inequality of access. Ambulance waiting times can be longer; pharmacies are more sparsely distributed; and, most importantly, dispensing pharmacies in rural locations frequently have less stock of medicinal products, so individuals have to travel much longer distances to get their medicines. These are all important problems with regard to access.
There are also concerns about accessing clinical services in acute situations. The time from onset of symptoms to intervention for patients with acute myocardial infraction and acute stroke is critical in terms of achieving the best clinical outcomes—yet frequently patients in rural locations experiencing those conditions have to wait longer to achieve those interventions. This problem extends to management of chronic conditions, particularly troublesome when there are long distances to travel for those who, for instance, receive daily fractions of radiotherapy to manage their cancers.
All this suggests that there must be a very clear focus in terms of planning considerations, when taking forward economic and other policies, to ensure that we can achieve equitable outcomes for those living in rural locations, as we do for those living in urban locations, with regard to the provision of healthcare. We are about to experience a major reorganisation of the NHS in England. The Government have set three clear priorities: a move from hospital to community care; a move from analogue to digital care; and a move from treatment to prevention. But for all those transformations to apply equitably in rural as well as urban locations, there needs to be very careful consideration of the specific needs in rural locations to achieve those policy objectives.
Can the Minister confirm that, in taking forward and understanding an assessment of the impact of various policies—economic, planning and other—with regard to impacts in rural communities, or for rural communities, there will be proper consideration of the impact on achieving health outcomes? Most important, in terms of economic policy, is the impact on the social determinants of health—housing, education, jobs and so on—which are the most important determinants of the health outcomes for those communities.
Baroness Coffey (Con)
My Lords, I thank my noble friend Lord Roborough for having introduced this debate. His eloquent speech at the start was full of detail and excellent suggestions on how things could be better if the Government listened. I try not to get too political in these debates, but I am conscious that, while the Minister is from a very rural area—a magnificent part of the country—it is worth noting that all the Commons Ministers represent urban areas. That is why I feel that there has been a lack of consideration and true understanding of some of the impact of recent decisions that have been made on the farming community but on rural communities too.
There is often an assumption that rural communities are wealthy, but that is simply not the case. The right reverend Prelate the Bishop of St Albans talked about rural strategy. A couple of years ago, the previous Government produced something called Unleashing Rural Opportunity. It was the one time I was able to get a map into a particular document showing that contrast and challenging other Ministers at the time but also the country as a whole to see how stark the variation is.
So what can be done? Unfortunately, confidence is now trashed by not only the actions but by the proposals to be made—particularly in the Planning and Infrastructure Bill. I am sure that we will debate it at length when it arrives in this place, but I hope noble Lords understand quite how bad this has got. When we think about the relationship—the unfortunately regrettable relationship—that Natural England has with a lot of our farming community, for it to be given powers to compulsorily purchase land means not only putting it in the wrong hands, because, if anything, it should be done by the Secretary of State, potentially delegating, but it completely destroys the nature markets framework and the approach of bringing private finance into the sector. Just last week, Steve Reed, the Defra Secretary, was right to praise the standard that has come out to open up this market, building on work from two years ago. It is great that we have finally got there, but the Government do not see the irony that giving powers such as this begs the question of why farmers should be bothered to get involved now in the first place.
When we come to debate the SI in a couple of weeks’ time, after the Recess, we can get more into how the money is being spent—and I am conscious that, with the change in paying farmers away from the guaranteed fixed payments there was always going to be a sort of see-saw when that moved over. People might not initially take up the proposals but they would understand, learn and commit—and we have seen the huge level of commitment. I genuinely hope that farmers are making complaints to the department, because I believe that serious maladministration has been done by pulling the plug against an expectation—and not by going through judicial review but by going straight to the department and the ombudsman.
We need farmers. We need landowners and rural communities to help not just with food production but with the future of our planet. It is about the topsy-turvy difficulties with which they are living—and our farmers are the original friends of the earth. Yes, there have been some really poor farming practices, which we have later recognised, which have now been changed. But we need to bring those people with us.
On one other point that I wanted to make, on housing, I am concerned about the proposal to adjust some of the planning decisions. Noble Lords will find that most councils are not nimbys, but when they are faced with an 82% increase for housing in east Suffolk and no changes in London, where the housing demand is really strong, that will put pressure on not just the fields but the villages and those small communities. By the way, at the same time, housing associations are flogging off the houses in those villages so that they can release capital to build more houses, they say, but they are doing that 60, 70 or 80 miles away—very close to the new areas of growth. It is just ridiculous.
There are other things that worry me about council officers taking decisions, when local plans have already set the housing densities and all of a sudden developers come along and say that they do not want to build at that density any more. What councillors and Ministers are not realising is that as a consequence even existing targets are going to take two or three times the amount of land to build the houses that are already there—so just imagine now being expected to double it.
We are in a difficult time, and I know that the Minister is very much a champion of rural areas. I genuinely hope that she can persuade the rest of the Government to be so too.
Lord Harlech (Con)
My Lords, it is a great pleasure to follow my noble friend. The House is enriched by the knowledge and experience that she brings to your Lordships’ Chamber. I declare my farming and land management interests in Wales and congratulate my noble friend Lord Roborough on securing this crucial debate.
Since the general election, we have seen policy decisions that have actively harmed the agricultural sector, undermined rural prosperity and jeopardised our nation’s food security. The Government’s election platform promised to support farmers and stimulate rural economic growth; instead, their policies have betrayed those commitments, leaving many farming businesses struggling to survive. A prime example of this is the sudden and shocking closure of the sustainable farming incentive. That move, made without consultation or warning, has left thousands of farmers in limbo. Many were in the midst of applications, investing time and resources into what was meant to be a stable scheme. Now they find themselves excluded, with no viable alternative, forced to return to more intensive farming methods—in direct contradiction of the UK’s environmental goals.
Take, for example, Richard, a dairy farmer from Cumbria. He had spent months preparing his SFI application, carefully planning to transition his farm to more sustainable practices. When the scheme was abruptly closed, he was left with no support and his business is now at risk of collapse. He may have no option but to sell off part of his herd just to survive.
The Country Land and Business Association, alongside CBI Economics, has provided alarming projections that the changes to APR and BPR could shrink UK gross value added by nearly £15 billion by 2030, eliminate more than 208,000 jobs and, paradoxically, reduce tax receipts by almost £1.9 billion. For individual farming businesses, this means an average loss of nearly 10% of turnover, a 15% drop in investment and an 8% reduction in staff. These are not mere numbers; they represent family-run farms being forced out of business, young farmers unable to inherit land and a bleak future for British agriculture.
Emily, a young farmer from Yorkshire, had been preparing to take over her family’s arable farm, but the proposed changes to APR and BPR mean she now fears that inheritance tax will make it financially impossible. She said her family has worked the land for generations, but this may be the last. The Government say they would support her, but their policies say otherwise. The Government remain silent on this disaster, refusing even to open a consultation on these damaging changes. That is unacceptable—the Government must engage with industry stakeholders to find a fairer approach, such as a clawback mechanism, that does not threaten the survival of farming businesses across the country.
The healthcare perspective on this debate, which we heard from the noble Lord, Lord Kakkar, was fascinating. It is often absent when discussing rural issues.
Several noble Lords have mentioned housing. Rural Britain is in the grip of a housing crisis, with young people unable to afford homes in the communities in which they grew up. Small-scale development could address this crisis while supporting local economies. Instead, as my noble friend Lord Grayling outlined, the Government’s proposals focus on empowering combined authorities to develop vast urban projects, while failing to equip local councils with the resources they need to approve modest, essential rural housing. Furthermore, the reforms inexplicably excluded national parks, further isolating these communities from economic opportunity.
The message from rural Britain is clear: this Government’s policies are failing it. What good is a 25-year plan if you do not know how you will survive the next six months? The farming community is being taxed into oblivion, environmental goals are being undermined and economic growth is being suffocated by bureaucratic inertia. If the Government are serious about their rural commitments, they must take immediate action—reinstate the sustainable farming incentive, rethink inheritance tax relief changes, introduce fairer planning policies and protect farmers from unjust compulsory purchase powers.
Our farmers and rural communities are the backbone of this country. They deserve better. I urge the Government to listen, consult and act before it is too late.
Lord Elliott of Ballinamallard (UUP)
My Lords, I thank your Lordships for the opportunity to take part in this important debate. I declare an interest as a farmer in Northern Ireland.
I have been very interested in some of the discussion so far. I know and appreciate that the Minister has agriculture, farming and rural communities at heart. But we must grasp the nettle here and start recognising that the farming community provides the food on our table, provides society with jobs and is the one economic base in this country consisting of price takers, not price makers. We do not have the opportunity to set our own price for products—that is done by others. If I go and buy a product in a shop, that price is set and I have to pay it. When we produce our milk, beef, sheep or wheat, we have to take whatever price the next part of the food chain gives us. We do not have that opportunity.
I was very interested in the assertion by the noble Baroness, Lady Coffey, around compulsory purchase. I will give an example. Some of my contribution is about Northern Ireland but some of it is broader. In Northern Ireland at that moment, 85 kilometres of new dual carriageway is being developed on the A5 road. Farmers and landowners have had that land vested for months and have not even got an offer of a valuation for it. Is that fair or reasonable? Those farmers cannot plan for their future. They do not know whether they will have the use of that land this summer to produce their food stocks. They have no idea; that is totally unfair.
I have talked to other farmers in a similar position who lost their land six years ago by vesting for a road scheme and who still have not got a penny. It is totally unfair and unreasonable. How would anybody here like it if their vehicle was impounded by the Government, used for their purposes and not paid for?
We must recognise the significant input that the farming community and rural communities make to the economy. I was taken by the noble Lord, Lord Kakkar, and the issue around health. I come from County Fermanagh, where we have one state-of-the-art hospital. It has been open for only 12 years but we have theatres and beds in it that have never been used because we cannot get the health professionals to come and live in the rural areas. There needs to be a change in attitude, policy and direction.
I have listened to some of the issues around financial support for the farming community, but it is not always financial support that the farming community wants; it is support in government policy as well. One aspect I will highlight is that where there are opportunities to improve animal housing—livestock housing—and to build modern, state-of-the-art housing, we in Northern Ireland are broadly not permitted to do that if we are within 7.5 kilometres of a European-designated site. That prevents us doing it. It does not matter what level of audits, surveys and assessments are carried out. If we are not meeting the targets, we cannot even replace it with housing that would be much better for the environment and have far lower greenhouse gas emissions. We are still not permitted to do it. Farmers need those types of policies, not just financial support.
Clearly, living in a rural area can be difficult for services. We have mentioned health services. I know that in one village—it has changed now, to be fair—we had one bus service per week, from the main town in Enniskillen out to that village and back on the same day. If you missed that bus, you had to wait a week to get the next. That is going a bit far, but your Lordships understand what I am saying. A good level of services is just not provided in the rural areas.
I know there is a climate change debate this afternoon and I do not want to encroach on that too much, but sometimes I believe that there are people and communities in this society who would rather we imported all our goods instead of producing our own, because that might mean we can hit our climate change targets more easily. That is not the case for me. I want us to produce them locally and to a better standard than others.
The Earl of Shrewsbury (Con)
My Lords, I congratulate my noble friend Lord Roborough on securing this important and timely debate. I declare interests as a member of the Game Conservancy Trust, now the GWCT, and a retired member of the NFU; both my sons work in land management and agriculture.
The recent news flow from this Government has created considerable concern and uncertainty in rural communities—in particular, in those dependent on farming, both directly and indirectly, for their livelihoods. The Government should also be concerned, as uncertainty at home, in combination with the challenges posed by trends in global markets, means that many farmers will need to intensify production to make ends meet.
While in the past direct subsidy support of the farming sector could be criticised for preventing innovation in farming practices, the new environmental land management scheme, of which the sustainable farming incentive is part, was a very different approach. This scheme was based on the premise of public money for public goods. These public goods are now often embedded in legislation, such as the target for nature recovery in the Environment Act. The withdrawal of the SFI, with no commitment to its resurrection until after the spending review in June, is therefore a very big concern, as it potentially undermines the Government’s ability to meet their 2030 target to halt the decline in species abundance, to which we are committed under international agreements.
Many farmers chose to go into mid-term Countryside Stewardship back in 2020 when the new ELMS was being created, in order to achieve some certainty in support for their environmental endeavours. Many of these farmers would have been early adopters of Countryside Stewardship schemes, having understood the importance of being enthusiastic contributors to supporting biodiversity on the farm. As a result, when their mid-term schemes finish at the end of this year, they will face the real risk of a gap in support for the measures that are already in place and delivering public goods for public money.
Given the domestic and international economic backdrop for farmers of rising costs and falling incomes, they are likely to opt to focus on food production and revert land currently given over to support pollinators or protect watercourses back into crops, which can be sold to bring in income. This will not only impact on species abundance targets. Farming is a fixed-asset, long-term business model and, as a result, any changes incur costs relating to the challenges of adopting new methods. The SFI included a number of options that supported farmers migrating their farming practices towards more resilient models. As a result, the gap in support that the pausing of the SFI creates also affects the ability of farms to change cultivation practices to those that are less reliant on inorganic inputs, such as fertilisers and pesticides, or which improve soil health, such as longer rotations. While these all benefit the farmer, they are also a public good in that they support wider policy ambitions for pollinators, the national action plan for pesticides and progress towards net zero, for example.
The considerable benefits to the attainment of the Government’s nature recovery targets and the resilience of farming systems to future climate and economic challenges have been undermined by the suspension of the SFI. It is therefore vital that Defra acts as quickly as possible to provide some stability and visibility of scheme availability, to avoid the cliff edge presented by the ending of the Countryside Stewardship mid-tier scheme at the end of this year.
I end on a positive note. The pausing of the scheme allows for reflection on where things went wrong. It appears that Defra knew that the money was going to run out, but did nothing to mitigate this risk. It may have been deemed a success to get the money out of the door, but not at the expense of the benefits that agri-environment schemes have been proven to bring. There is much to like about the SFI, so an in-depth review is not needed. Instead, consideration should be given to the fairer distribution of money through asking farmers to register their interest and the land area they are interested in committing. A cap could then be applied, if needed. If this then resulted in an underspend, farmers could be invited to add other measures to their existing schemes.
Lord Douglas-Miller (Con)
My Lords, it is a great pleasure to follow my noble friend Lord Shrewsbury. I declare my farming interests as set out in the register.
In a few short months, this Government have achieved something rather remarkable—they have made those of us who farm in Scotland feel lucky. Sadly, they have done this by completely undermining the confidence and financial security of the farming community across England and Wales with a range of poorly thought-out policies. While I concur with the many points that my noble friend Lord Roborough made in his opening remarks, I will focus on three.
First, the reversal of the badger cull will leave many in the dairy and beef sector distraught at the prospect of heightened incidence of TB and the catastrophic impact this will have on many farm businesses. From my own experience, I believe that continuing the badger cull is a key part of the UK’s drive towards eradicating TB. Can the Minister tell us whether the Chief Veterinary Officer was party to and agreed with this decision?
Secondly, the Government’s policy of reducing APR and BPR has been well discussed and the devasting impact on family farms clearly spelled out, so I do not intend to repeat that, save to say that the alleged £500 million that this will bring in represents a rounding error in the scheme of the Chancellor’s self-inflicted economic woes. Is Defra now run as an offshoot of the Treasury or does it have a mind of its own? If it is the latter, could the Minister tell us whether she was party to the decision to reduce these IHT reliefs and whether she agrees with this policy?
Finally, we have the abrupt withdrawal of the SFI, hot on the heels of accelerating the reduction in the remaining delinked payments, creating a perfect financial storm for the farming community and leaving many farmers across the UK nursing heavy losses entirely as a result of the Government’s financial mismanagement. This feels manifestly unjust and must surely be either a deliberate outcome or an unintended consequence of not understanding the implications of their decisions.
I can appreciate that the budgeting process for the various ELMS modules is more complex than the previous CAP system. A demand-led system was always going to be more complex than simply allocating the budget on a per-acre basis. This complexity is not, however, an acceptable excuse for pulling the plug on a critical funding source that underpins the economic stability of the sector. It begs the question of who has budgeting oversight in Defra and why they have they failed at such a basic level.
I know the Minister understands that farmers need clarity on their finances, so I have three questions for her. First, was she involved in the decision summarily to close down the SFI against Defra’s own guidance? Secondly, has she any oversight of the budgeting process within Defra, and if not, why not? Thirdly, does she have any knowledge of when the SFI will reopen? My final point is that if farmers are to have any chance of navigating their way through the post-Brexit transition, they need clarity and certainty. At the moment, they have neither.
One much-discussed remedy is the development of woodland, peatland and biodiversity credits, which should sit squarely within the wider environmental delivery plans. My noble friend Lord Roborough articulated that farmers and landowners need clear guidelines and positive encouragement, rather than the threat of a government arm’s-length body compulsorily purchasing their property if they do not follow Natural England’s mantra. I totally agree with my noble friend Lady Coffey’s assessment that to give CPO powers to Natural England—an organisation that is widely discredited, disliked and distrusted by the farming community—is both disproportionate and overarching. I strongly urge the Minister to look at this again before it causes serious conflict within the farming community.
Lord Carrington (CB)
My Lords, I declare my active farming interests in Buckinghamshire and Lincolnshire. I thank the noble Lord, Lord Roborough, for bringing this debate, and all noble Lords who have contributed so far on the wide number of topics that it involves. I think we can all agree there is vast uncertainty in farming and rural policy due to government action on taxes, SFI and, most importantly, the empty public purse. This is compounded by the forthcoming land use framework, the national food strategy, the 25-year farming road map, the Planning and Infrastructure Bill, the Renters’ Rights Bill and much more.
Despite the uncertainty, farm businesses need to move on, although planning in relation to environmental measures and the horticultural sector must wait until further government announcements on the SFI later this year, as well as any replacement for the fruit and vegetable aid scheme. Productive, profitable farming needs to look at an industry without subsidies but with a level playing field when it comes to trade policy and import of agricultural products using methods and chemicals denied to our own farmers. However, the result of decreasing government support will have substantial fallout in the rural community, which the Government will need to address.
Unsubsidised farming competing internationally will not be able to afford voluntary environmental good work unless it benefits their farming system. Continuing support for the environment and biodiversity will be required, albeit in a more targeted manner. Parallel to this, it is great to see that, in the other place, Alistair Carmichael has introduced the food supply chain fairness Bill, which hopefully will increase margins for our farmers against major retailers.
As far as this debate is concerned, I wish to highlight the importance of growth and productivity in farming to the rural economy and particularly how to facilitate much-needed investment in agricultural science, innovation and technology. The APPG on Science and Technology in Agriculture, of which I am a member, has focused on the need to attract investment to support farm innovation, as the UK is a recognised powerhouse in terms of plant science and agri-research. The big challenge is to convert all these wonderful ideas into accessible, profitable commercial farming, and, for this, investment needs to be attracted from both the public and private sectors. So far, we have not been successful in launching public/private partnerships involving government, industry, science and investors. To bridge the gap between scientific research and commercialisation of these ideas, we need to study how other countries, such as Canada, Brazil and Australia, have successfully used this model of public/private partnerships to achieve this end.
The Oxford-Cambridge arc growth corridor is a welcome move by the Government to encourage growth based on our enviable scientific research. We need a series of innovation hubs with infrastructure and ecosystems which attract and support high-growth start-ups, investors and corporate partners. This works well in the United States and France. To quote a recent article in the Financial Times:
“Frequent convening of entrepreneurs, accelerators and talent is … vital. So is physical co-location of research, capital and industry”.
Our public finances may be weak, but the returns on investment in areas where we lead the world, such as agricultural-related science, far outweigh the costs.
With government encouragement, innovation hubs and a stable investment climate, we will be able to emulate the United States in targeting a 40% increase in food production by 2050, while reducing farming’s environmental footprint by 50%. With all the self-induced financial upsets, can the Minister tell us how the Government plan to bring stability into the agricultural industry, as this is the basic requirement for investment and growth?
Lord Horam (Con)
Unlike the noble Lord, Lord Carrington, I am afraid that I do not possess a great knowledge of farming. However, it is interesting how many noble Lords who do not possess a knowledge of farming have been drawn into this debate; it shows the concern that everybody has for farming and for what is happening as a result of the Government’s actions.
The nearest I got to understanding farming was when I was asked, a long time ago, to consider putting my name forward to become the Conservative candidate in the Monmouth by-election. Realising that Monmouth was a rural area with lots of farming, I rang my wife’s uncle, who was a farmer in England, and we had a useful half-hour discussion. When I got to the final of Monmouth, there were three people there—Evans, Evans and Horam—so clearly I had no chance. But I was mollified when the president of the Welsh NFU came up to me afterwards and said, “Mr Horam, I am sorry you were not selected because you do show a remarkable understanding of the problems of Welsh farming”. Little did he know.
However, I must not totally underestimate my knowledge of farming, because I was brought up in the Ribble Valley, which is very much a farming area. I was born there during the Second World War, when, of course, food security was of immense significance. We had rationing, which meant that there was no obesity as well as no malnutrition—although the downside was that the food was extremely stodgy and, as the official history of the Second World War states, there was a remarkable level of flatulence as a result of the food we were eating then.
As someone with that concern for farming, I was shocked and dismayed by the Budget and its effect on farming. I do not think that the intention was deliberate; I think it was rather accidental, because it was a Budget resolution. As my noble friend Lady Coffey remarked, the people at Defra are, in essence, urban MPs. The same can be said about the Members of Parliament in the Treasury: they are predominantly urban MPs and have little understanding of the effect on farming of taking a short-term budgetary view of what we have to do. This is another example of how taking an immediate fiscal framework, rather than a long-term view, has disastrous consequences. But it is certainly not accidental that the Government have followed that up with the closure of the sustainable farming initiative. Jenni Russell said in an article in the Times:
“It is a shattering betrayal of the farmers who trusted Starmer’s commitment to greener policies … As one prominent farmer and environmentalist … said: ‘In the context of everything farmers and society have been told since 2017, this is insane’”.
Those are strong words from the Times.
Curiously, this damaging approach to farming was not always a characteristic of Labour Governments. The Minister—who, as we know, is a very capable woman and very good at the Dispatch Box—was the former MP for Workington. She will remember one of her illustrious predecessors, the great Fred Peart, who was the Secretary of State for Agriculture, Fisheries and Food, as it was called at that time, not once but twice in the second Wilson Administration. He was much loved by farmers and had great experience and understanding of the farming community.
In addition, another MP during that period, Joan Maynard, was a representative of the agricultural workers. Because she was very left wing, she was called “Stalin’s Granny”—very affectionately—by the House of Commons. She would not have stood for all this nonsense and the effect on agricultural workers. So I appeal to the Minister, for whom we all have a high regard, to take her colleagues on a trip down memory lane, in order for them to realise that Labour once had real wisdom and understanding of community, and to persuade them to change their minds on these disastrous policies.
The Lord Bishop of Hereford
My Lords, I am grateful to the noble Lord, Lord Roborough, for introducing this important debate. I speak as the Bishop of the most rural diocese in the Church of England.
Agriculture provides significant employment and is extremely diverse, from substantial agribusinesses to small family farms, and from large arable enterprises to small livestock hill farms. Prior to ordination, I worked as an agronomist, advising farmers on all aspects of crop production, translating scientific research into the practical solutions commended by the noble Lord, Lord Carrington. I have the privilege this year of being president of the Three Counties Show at Malvern, an event I warmly commend to noble Lords as a splendid day out.
However, over 40 years of involvement in the sector, I can honestly say that I have never seen morale so low nor such disillusionment with the Government’s capacity to understand and respond to the needs of the agricultural industry. A thriving agri-farming industry is essential to the wider health of the rural economy. Family farms are at the heart of this ecology. The inevitable consolidation of units that will ensue from proposed changes in APR and BPR will have huge knock-on effects on support industries, lead to rural depopulation and undermine the viability of many local services and businesses.
The Government have already rejected very reasonable alternative proposals from the NFU for a clawback mechanism, which I need not rehearse here. There are injustices in the existing application of APR and BPR which need to be addressed, as the noble Lord, Lord Davies of Brixton, has already mentioned in this debate.
The NFU proposals, which mirror similar practices in the rest of Europe, would go a significant way to addressing these without collateral damage to small family farms. A conservative modelling shows that such a clawback scheme would still raise an extra £554 million for the Treasury—some 7% more than the return from current proposals. I hope the conversation about agricultural policy can move beyond an arid discussion of numbers and economic modelling. This speaks to questions of honesty and good governance.
This Government campaigned on a manifesto pledge to support farmers and stimulate rural economic growth. I attended an event in this House shortly after the election, at which I am sure I remember the Minister assuring us that no changes to APR and BPR were planned—and yet within weeks, those assurances had been set aside.
Members of the Government in the other place have distanced themselves from government policy on inheritance tax, recognising the serious effects it will have on their farming constituents. Given that the proposed changes to inheritance tax seem to have been driven by the Treasury without consultation with Defra, there would be no shame in thinking again as the implications of this policy for small family farms become evident.
Foremost in my mind are the men and women who provide the food we eat and who work in an industry that is extraordinarily demanding. In all weathers, with a woeful return on capital and working hours that would be unacceptable in almost any other walk of life, they produce the most basic staples of life. Theirs is the mental health and well-being undermined by the proposed taxation policy. They feel ignored, misunderstood and marginalised. I urge the Government to ensure that this community’s voice is heard and responded to.
Baroness McIntosh of Pickering (Con)
I congratulate my noble friend on securing this debate, and I welcome the Minister to her place today. I declare my interests as vice president of the Association of Drainage Authorities and a member of the rural interest group of the Church of England Synod; I also work with dispensing doctors in rural areas. I can testify to the inequality in access to healthcare, housing and transport in rural areas.
It is a matter of regret that Labour, having been elected on the promise of restoring trust and confidence in government, has achieved quite the reverse with its farming and planning proposals. First, it reversed its promise not to amend inheritance tax proposals affecting farms, or agricultural property relief; then there was the early closure of the sustainable farming initiative, with no promised six-week notice. How can any responsible farming business plan around such erratic policy changes without notice or time to prepare to make alternative arrangements?
The impact on the uplands has been severe. Farmers are stuck in less lucrative, higher-level stewardship schemes and are unable to switch. Early SFI closure has had a particularly devastating impact on family and upland farms. There is a long-term threat to livestock, which will simply disappear from the uplands, and there will be a consequential knock-on impact on lowland farms too.
I urge the Minister to find a better balance between food production and nurturing nature, and to recognise: who better to achieve this than farmers, who actively farm the land and tend the livestock?
The issues of food security and greater self-sufficiency in food must be addressed. We must learn from the invasion of and ongoing hostilities in Ukraine the lesson of how quickly the food supply chain can be upturned.
The economic impact of the international aspects of food and farming cannot be ignored. The free trade agreements with Australia and New Zealand have been neither fair to our farmers nor have allowed them to compete. The very minimum demand in any free trade agreement should be that imports be permitted only if these agricultural products meet the same animal welfare and environmental standards as are demanded of our domestic producers. In addition, no meat should be allowed into the UK if produced with antibiotics or hormones or rinsed in chlorine.
Farmers play a crucial role in flood prevention and flood resilience. The noble Baroness will have seen this first hand locally in her time as a constituency MP. This role is exercised through internal drainage boards, as well as the regular maintenance and dredging of water courses, for which farmers and landowners are responsible. It is still not clear whether the temporary storage of water on land, by farmers and other rural businesses such as golf courses, will be rewarded under the ELM scheme. If so, how will the de minimis rules of the Reservoirs Act apply in these circumstances?
The role of auction marts should be celebrated. They not only set an economic and transparent price, but enable the animals to be seen live at the point of sale, and provide an essential social and support network.
Farming is a vital part of the rural economy. When farming does well, a market town flourishes. Children attend schools in a healthy and well-fed fashion, and farmers clear the roads of snow and ice in winter and play other such roles throughout the year, benefiting the rural community—at no cost.
The Planning and Infrastructure Bill poses a further threat to rural communities with its proposals for building and developing on high-grade agricultural land. The Minister kindly promised to return to me on the vexed question of 9% of farmland being lost under energy proposals to build solar farms, battery storage plants and pylons on farmland. Has she had the opportunity to look at this and discuss it with the Energy Minister in this place? Farmers need certainty and stability, not these constant changes at short notice, which do not instil confidence for their future.
Farmers’ mental health is an issue of mounting concern. I pay tribute to the churches for their rural pastoral work, as evidenced by the outreach to rural communities such those in Thirsk.
When did the Government take their decision to end SFI? Will they recognise and reward upland farmers for producing food at a time when food security and self-sufficiency levels are being challenged? Will the noble Baroness address the issues of falling stock levels and tenant farmers, most particularly in the uplands; and what will the future be for graziers who want to graze in perpetuity on common land? Finally, where will the growth of the rural economy come from, if not from farming?
Lord Best (CB)
My Lords, I thank the noble Lord, Lord Roborough, for initiating this timely debate and I am delighted to follow the noble Baroness, Lady McIntosh, who is such a champion for rural communities.
My comments address the impact of the Government’s economic and planning measures on the critical issue of housing in rural areas. I will draw on the work of the Devon Housing Commission, which I was delighted to chair and which reported last year.
The shortage of secure, decent, affordable homes is creating particularly acute difficulties for employers in the private and public sectors in rural communities. But rural areas have half as much social housing—from councils and housing associations—as elsewhere: only 9% of the stock, compared with 17% in the country as a whole.
The 25 to 35 year-olds are moving away from many rural areas, not just because they cannot compete with house purchasers moving from other places, but because private sector rents are beyond the reach of even those on average incomes. Without a workforce, local businesses and public services inevitably decline.
The Government are taking action in respect of some of the recommendations of the Devon Housing Commission, but really need to go further. First, the affordable housing programme needs adequate funding. The Government have found a very welcome extra £800 million, but their agency, Homes England, should recognise the special value of investment in rural areas: 10% of total grant funding should be earmarked for rural housing associations and local community land trusts.
Secondly, in rural areas, as elsewhere, the Government are tackling the delays and blockages caused by inadequate resources for planning departments. The Planning and Infrastructure Bill should speed up and increase delivery, and local government reorganisation should ease the pressures created by having a multiplicity of planning authorities in some rural areas. Devon, for instance, has 10 local authorities with planning responsibilities, which, in future, will be combined into unitary councils to streamline local processes.
Thirdly, there is the need to address the loss of properties available for long-term letting to local people in many rural tourist hotspots, caused by landlords switching to Airbnb-style short-term lets. The Government are committed to a registration scheme, and they have consulted on the creation of a new use class, which would require planning consent before tenancies can be converted to short-term lets. I have tabled an amendment to the Renters’ Rights Bill to move this forward.
Fourthly, as recommended by the Devon Housing Commission, Defra has announced further funding for rural housing enablers, which are hosted by rural community councils. These RHEs play a crucial role in brokering small village schemes with all the relevant parties—housing associations, planners, landowners, the parish council, et cetera. However, Defra’s commitment has been for only 12 months at a time, inhibiting recruitment of these enablers; a five-year programme would be much better.
Fifthly, there is the unique planning tool of rural exception sites, which enable planning consent to be granted for development exceptionally, precisely because the homes will serve local needs. These developments can produce delightful, affordable, sustainable homes for local people, replenishing the local primary school and rejuvenating the local community. It would be good to see the Chancellor encouraging landowners to make sites available for more of these village schemes through tax reforms, as advocated by the Country Land and Business Association.
In conclusion, both the building of new homes that are unaffordable to local households and the flipping of accommodation for rent to short-term lets and second homes risk rural communities becoming enclaves of older, more affluent owners. These trends are stifling economic growth, as well as eroding long-established rural communities. Can the Minister assure the House that the Government will support more of the excellent local social housing schemes, which can do so much to sustain and revitalise local economies and rural communities?
Lord Bellingham (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Best, who has given us some very interesting ideas about housing. I declare my interests as in the register and congratulate the noble Lord, Lord Roborough, on moving this debate.
We have heard a lot of facts and figures, but in my short contribution, I want to try to get behind the facts and look at some of the human interest in this and some of the real examples. In fact, the noble Lord, Lord Harlech, did the same with his two examples. I was lucky enough to be briefed by my NFU contact, who explained to me exactly what is happening in one particular Norfolk village in the heart of the Norfolk rural community—not my old constituency, and I will not identify it. I want to take your Lordships on a great tour of that village and the farming activities in and around it.
Farm A is a 1,200-acre farm in this village of 400 people which has a thriving school, a church, a pub and a village shop. It is a tenanted farm from a big estate, and it is well run, mainly arable, with some water meadows, two full-time employees and two sons who qualify under the 1948 legislation. The farmer is on the parish council. The wife is involved with the school as a governor and is a PCC.
Farm B is a 600-acre farm that is owned by fourth-generation farmers. They have two daughters. He operates as a contractor to enhance his business. He and his wife are also very involved with the community.
Farm C is an owner-occupied farm of 200 acres which has been in the family for four generations. It is a small farm which has morphed into being more of a hobby farm, as the two brothers involved are also involved in other businesses to make ends meet.
Farm D was bought about 30 years ago by a commercial farming family. It is a very well-run family farm of 1,400 acres, with two full-time employees and three children. The farmer is vice-chairman of the parish council.
My NFU friend and I talked through what might happen under these inheritance tax changes. The farmer at the tenanted farm is really worried. You might think, “He’s not involved, he’s a tenant”, but if the estate involved is hit by 20% IHT, it will have to raise £10 million over 10 years. What will it do? It will probably sell the tenanted farm for solar arrays. As my noble friend Lord Grayling pointed out, in Norfolk a lot of grade 1 agricultural land is going over to solar, which is a disaster. The tenant could be evicted. The house would be sold to a second-home owner. The support for community would be lost.
I have also spoken to the farmer with the 600-acre farm, who is devastated. He has two daughters and no idea what to do. He is over 80. He was going to wait until he died. The farm would then be left and there would be no IHT. What will he do? Will he sell it now? No, probably he will take the hit and the farm will be sold, probably to a large farming company.
Farm C is 200 acres. The Government go on about how this will not affect small farms, yet 200 acres is a tiny farm which will definitely be hit by this. Half the farm will be sold. It will probably be consolidated into a much bigger holding.
Farm D is an interesting case. The farmer is relatively young. He has three children—two sons who do not want to farm and a daughter who might want to farm—and a grandson who wants to go to Cirencester. He does not want to take a decision at the moment about making the farm over because if he does, he will have sibling meltdown. He wants to wait until he dies and then probably make it over to the grandson. If he makes it over now, what will the two sons feel about their inheritance? One is a doctor, the other works in finance.
As the right reverend Prelate the Bishop of Hereford pointed out, we will see a consolidation of holdings and a destruction of local supply chains, as all these farms use local suppliers. We will see communities broken up. Farmers feel very angry. Is it surprising? Just over a year ago, Steve Reed, the shadow Environment Secretary, gave a “cast-iron guarantee” that an incoming Labour Government would not make any changes to IHT relief. Farmers trusted in him. Some voted Labour; they feel totally betrayed. How do the Government expect to deliver the rural agenda of a farming policy without the good will of farmers? They have lost that good will. Farmers feel betrayed. There is still time to make up and repair the damage, but time is running out. I implore Ministers to listen.
Lord Elliott of Mickle Fell (Con)
My Lords, it is a pleasure to follow my noble friend Lord Bellingham. I very much agree with his comments about inheritance tax. I congratulate my noble friend Lord Roborough on introducing this debate and take this opportunity to thank him for the help and advice that he gave me when I came to this place just over a year ago. Having been born and brought up in central Leeds, before moving to central London for university and then living in six London boroughs, I am acutely conscious that many of the other speakers in this debate have much more experience of agriculture and rural affairs than I do, so I will keep my contribution relatively short.
The point I would like to add, which I have yet to hear, is on the importance of a vibrant rural economy in getting people from welfare into work. To take a step back, the Government are rightly committed to getting the employment rate back up to its pre-Covid level of 80%, by getting 2 million people from welfare into work. This was outlined in their Get Britain Working White Paper before Christmas and more recently, a fortnight ago, in their Pathways to Work Green Paper. I very much welcome this objective and commend the Government for their ambition.
The focus of such plans, and often the focus of similar think-tank plans in the welfare-to-work agenda, is often on towns and cities. I note that, as we speak, the Work and Pensions Secretary is in Barnsley to launch the first of nine “Get Britain Working” trailblazer programmes. However, rural communities are often overlooked in this debate. While the problem of worklessness is undoubtedly an issue in urban areas, it is also an issue in rural areas. My noble friend Lady Coffey has already touched on the important issue of rural poverty. The latest data show that rural inland areas have economic inactivity levels of 19.6% and that rural coastal communities have a rate of 21.9%. This compares to 21.5% nationally. Given that rural areas often have fewer job opportunities than their urban counterparts, we must not forget rural communities in the welfare-to-work agenda.
Recent research by the Jobs Foundation—a charity of which I am president, as declared in the register—called Two Million Jobs, looked at the whole welfare-to-work agenda across the country and focused on four areas: a city, Sheffield; a town, Loughborough; a coastal area, Hartlepool; and a rural area, Pembrokeshire. When we looked at Pembrokeshire, we saw the incredibly important role of farms in the area in providing local jobs. We also saw the hospitality and tourism industry in Pembrokeshire and the local oil refinery—Pembroke refinery, run by Valero—which has a fantastic scheme to get people from further education into high-quality jobs. All these businesses are vital to the Pembrokeshire jobs market and will be the employers that ensure that the Government can get the employment rate back up to 80% across the country.
In our national mission to get 2 million people into work, it is therefore essential that the Government’s economic and planning measures are geared towards helping rural businesses to thrive, so that they too can play their part in getting Britain working.
Lord Bilimoria (CB)
My Lords, for over a quarter of a century, as founder of Cobra Beer, I produced beer in the UK with British-grown barley. I am proud of the high quality of our agriculture sector’s produce, leading to Cobra Beer winning 150 gold medals. Agriculture makes up just 0.6% of the UK’s GDP and, for over a decade, I helped and worked with the management of the family farm of my wife’s uncle and aunt, in the Free State in South Africa—thousands of acres comprising dairy, arable, sheep and cattle. I thank the noble Lord, Lord Roborough, for initiating this very important debate.
I ask the Minister about the closure of the sustainable farming incentive scheme—SFI. After Brexit, our farmers no longer had access to the common agricultural policy, which provided financial support to farmers through subsidies. How are farmers now going to be compensated for the loss not only of the CAP but of the SFI? Farming groups are of course worried about the inheritance tax relief reforms, with inheritance tax of 20% now being applied to family farms. The NFU thinks that this threatens family farms and food security, estimating that 70,000 farms could be affected. Surely there is an argument for reversing this harmful policy.
I give the Government credit for some of their initiatives—for example, extending the seasonal worker visa route for five years, investing £110 million in agritech through innovation programmes, establishing the National Biosecurity Centre to combat animal diseases and publishing a 25-year farming road map later this year. But would the Minister agree that we should prioritise farming in the coming spending review and increase the annual agricultural budget to £6 billion?
When it comes to the inheritance tax reforms, they are supposed to affect fewer than 500 estates, according to the Government. But what if a farmer passes away within the next seven years without having had the chance to plan the transition? A survey by Family Business UK has found that over 200,000 jobs in family-run businesses and farms could be lost due to the Government’s decision to cap business and agricultural tax relief. The inheritance tax changes to take effect from next year limit the relief, as I said earlier. Some 55% of family businesses have paused or cancelled investment, nearly a quarter have stalled hiring or cut jobs, the farming sector alone could lose almost 30,000 jobs, and the changes could reduce economic value by £14 billion. Surely, this policy is going to backfire, leading to sales of farms and lower taxation revenue for the Government. Would the Government consider reviewing this policy?
There are alternatives, such as a targeted tax relief for working farmers; a government-underwritten insurance for elderly landowners; exempting the elderly, for example, those over 80, from tax changes; and separating the agricultural property relief from business property relief. The chair of the EFRA Committee, Alistair Carmichael, said:
“Agricultural property relief is not a loophole; it has been a deliberate policy of successive Governments for the past 40 years, designed to avoid the sale and break-up of family farms. … These changes will have a ripple effect across the whole rural community”.—[Official Report, Commons, 4/11/24; col. 24.]
In some cases, farms will simply leave too little income for the inheritor, who will have too few other resources to pay the tax and will be forced to sell part or all of the farm.
To build on what the noble Lord, Lord Kakkar, said about access to medical care in rural areas, I am proud to be the London chair of the ambassadors of the Cambridge Children’s Hospital, which is going to be built in conjunction with the University of Cambridge. Do noble Lords realise that, in the whole of East Anglia—a rural area—there is no children’s hospital? They have to go to Birmingham, where I was chancellor of the University of Birmingham for 10 years, or they come here to Great Ormond Street. We will now have a children’s hospital for this large rural area.
With regard to self-sufficiency and food security, the UK produces 60% of domestic food consumption by economic value. We produce the majority of our grains, meat, dairy and eggs, yet we have to import 40% of our food. With the US tariff wars now destabilising global supply chains, the NFU is concerned, because the US is our second-largest export market, and the largest market for British agri-food products, outside the European Union. Our farmers are proud of the quality of what we supply. Our Secretary of State for Business, Jonathan Reynolds, has said that there is a red line that Britain will not accept hormone-treated beef and chlorine-washed chicken—a major sticking point in previous negotiations.
To conclude, it is so easy to take the farming and agricultural sector for granted. It should always be a top priority for any Government at any time.
Lord Fuller (Con)
My Lords, in just six months Labour has morphed from casual indifference towards the farmers who grow the barley—for our noble friend Lord Bilimoria—and the communities who act as custodians of our landscapes towards outright hostility.
Noble Lords will know from the register that I have farming interests, but I am principally involved in the fertiliser industry, which sits at the start of the food chain and is part of a very large economic ecosystem in the sticks, alongside machinery dealers, dairy engineers, animal feed manufacturers and the more esoteric artisan trades such as ditchers, drainers, fencers and thatchers, to name just a few. The Government’s hostility to these people is felt not just by farmers but in the trading estates that surround every market town in Britain, mostly through these family-owned businesses. We know, and have just heard, that it has taken Defra to tell the Treasury how to count the number of farmers correctly, but neither Defra nor the Treasury has stopped to consider those wider ecosystem businesses, which are the true multipliers of rural prosperity.
Labour’s fundamental misunderstanding of how the real economy works has perversely and disproportionately affected the shires, where 90% of businesses employ 10 people or less, and the business property relief plans discriminate particularly against tenant farmers, the most dynamic and entrepreneurial of farmers, who live by their wits without the cushion of inherited land. As our noble friend Lord Bilimoria, says, business property relief is not a loophole; it is a feature of our economy.
Labour has precipitated a countryside cash-flow crisis by the summary suspension of SFI, with the result that artisan craftsmen have to wait longer to be paid. Astonishingly, the scaling back of ELMS has made nature-friendly farming approaches economically unsustainable. Now only intensification can prevent a small fortune being made by starting with a big one. The effects of VAT and business rates on private schools are hollowing out our rural market towns, where the school is often the largest employer, and the cook, the cleaner and the groundsman—not highly paid people—are being let go.
Alongside this economic illiteracy, I detect something more sinister afoot in the new planning measures, for buried away in the Finance Act we saw provisions whereby agricultural property relief could be available only to environmental schemes operated by the state. In Labour’s world, there can be no room for private sector innovation in the delivery of environmental goods, where Britain has demonstrated substantial comparative advantage. Labour’s solution is to reward the deeply conflicted enemies of growth at Natural England with monopoly operating powers, alongside other powers to confiscate land in pursuance of their activist agenda. Who knew that the socialists wanted the state to own all the factors of production so badly?
I should know because I have had to deal with Natural England as a leader of a council. I exposed it as selectively quoting and misrepresenting academic evidence that it said supported its views but did not. It capriciously chops and changes its mind on a whim. It stands in the way of progress and innovation by mendaciously and spitefully placing every obstacle in the way of councils and others who have been forced to step in to do the work it and the Environment Agency are paid to do but are not doing. It is unaccountable, yet places unaffordable burdens on business, stops the building of affordable homes for rural families and has driven many small builders to the wall. I have read the Corry report, published yesterday, and I regret to say that there could not be a less appropriate body than Natural England to be given this important work or to be awarded trusted status, for by its actions it has forfeited that trust.
My overwhelming fear is that the Government will now be “Nationalising Nature” by becoming the sole regulator, financier, inspector, confiscator and operator of environmental schemes, jacking up charges to support a bloated bureaucracy while acting as judge and jury of what only they deem to be acceptable. I welcome suggestions to realign the overlapping cat’s cradle of regulators that hold back ambition, but we will need more than a rewriting of guidance to remove the dead hand of the state that acts as a drag anchor on progress, innovation and growth in the shires. Only a complete rewiring will do.
Whether it is by its economic, social or environmental policies, Labour may think that it is attacking farmers in a class war, but it is ordinary working people in family firms in the wider rural economy who are caught in the crossfire of its culture clash, the effect of which is to damage the long-term rural economy and the landscapes we should all strive to enhance.
Lord Teverson (LD)
First, I declare my interests as chair of Cornwall and Isles of Scilly Local Nature Partnership and as a director of Wessex Investors, which is involved in the development sector. I thank the noble Lord, Lord Roborough, for this debate. I know he feels very passionately about this area.
I want first to react and respond to the right reverend Prelate the Bishop of St Albans, who is a true champion of rural affairs, particularly as chair of the Rural Coalition, because the rural economy is often forgotten about. It is important. It is not just farming; it is coastal fisheries, all the SME environment and much more. There are big challenges there, as he said. We can take rural transport, which has declined hugely. It is a real challenge for young people to get to education facilities and for ordinary people to get to work. In the financial area, we have had a huge number of banks closing in urban areas within the countryside, leaving huge areas where people who want to talk to their bank manager find it almost impossible.
The noble Lord, Lord Kakkar, mentioned health. I remember when I first became a Member of this House going along to an all-party parliamentary group on health where there was one of the country’s experts on strokes. I said, “I live in rural Cornwall. What should I do about that challenge?” He answered very quickly, “You should move”. That is the dilemma of living in rural areas and the countryside today
On housing, as the noble Lord, Lord Best, pointed out, we have a serious lack of social housing. When we had the right to buy, we were promised that for every social housing unit sold there would be a replacement. That never happened, in practice. I have to say to the right reverend Prelates that in my own parish of St Ewe the church commissioners have put up for sale some land next to social housing that was built in the past by our village. The church has insisted that it goes out to the open market, despite the fact that, as a local community, we have said that we will pay the market price. It is still out there for anybody to buy on a public quoting system. If the right reverend Prelate would like to have a word with the Bishop of St Germans, I would be very grateful.
We have all these challenges in local communities: transport, housing, access to finance and even energy. The noble Lord, Lord Elliott of Ballinamallard, mentioned the issues in Northern Ireland. Of course, in rural communities we are not generally on the gas grid and have to pay much higher oil heating charges, and that is particularly the case in Northern Ireland. I have to say that a lot of those issues got considerably—and seriously—worse during the incumbency of the previous Government.
On farming, those who mentioned the SFI are absolutely right. I find it incredible that a government department somehow appears to be caught out in its budgeting on one of its major policy planks—not just on farming sustainability but on the growth of nature too. We come to a situation where, with no notice, the scheme ends, leaving many people in limbo. As far as I can see, government policy on nature restoration is also in limbo. Farms that have been on countryside schemes that are coming to an end this year—I think some 35,000 farms are coming to the end of Countryside Stewardship programmes—will have nowhere to go once those programmes are finished.
We have had some excellent specific instances from the noble Lords, Lord Bellingham and Lord Harlech. I spoke to a friend of mine who farms in north Cornwall. She made the point that she has been very enthusiastic about a holistic and sustainable approach to her dairy farming, but said, “What I can’t do now is trust that those schemes will be there for the future. Therefore, what do I do about all the work that I have done so far, while trying to keep my farm viable for the future?”
Back in the days of the European Union, the CAP was not good, but we knew pretty well for seven years that there was going to be consistent policy. We felt we were going to have that with the much better environmental land management scheme, yet now we have uncertainty ahead. Farming, including for biodiversity, is something that needs to be planned and consistent—not just over seven years but beyond that—but we have those uncertainties.
I was pleased that the noble Lord, Lord Grayling, talked about biodiversity corridors and everything that needs to be done there. One of the challenges we have now—I have mentioned this to the Minister before—is that Defra needs to move out of being in silos and be much more comprehensive. I will come to the Corry report in just a second, as it might solve that.
What concerns me is that while we have local nature recovery strategies now in England—48 separate ones that are, I hope, co-ordinated to a degree—at the moment we cannot use ELMS to tie up with them, and the planning process does not especially tie up with them. What we need is a much more holistic approach to biodiversity, to get to those wildlife corridors and everything else that we need to get somewhere towards our 30 by 30 targets. We need to make sure it is far better managed and focused than it is at the moment. Many of those schemes are good, but we need to make sure they can be effective.
The Corry report—I think it came out yesterday or the day before—is on Defra having to move forward in a number of ways. I welcome a number of areas of that report which are relevant to this debate. First, there is having one environmental organisation, out of the many in the Defra family, to lead on major planning issues, although I sometimes think that would be quite useful on smaller planning issues as well, particularly in rural communities where those developments are not so large. Another area is making environmental enforcement better and more practical; there are many other areas as well. I am not going to ask the Minister to say which of those 29 recommendations she will or will not follow, but will the Government take them seriously and start to implement them fairly quickly?
Lastly, I come on to trade, mentioned by the noble Baroness, Lady McIntosh, and others. Trade policy is very much in focus at the moment, and I have a concern. We have seen the very bad reaction that the farming community had to the Australia and New Zealand deals under the previous Administration. I understand that the Government are focused on future economic and trade relations with the United States. I get that, but what I would really like to hear from the Minister is that, rather than the fight between the trade department and Defra that we had under the previous Administration, we have a determination that we will not import food from the United States that is substandard in comparison with our own standards.
My only other question is: when will the SFI function again and can we have confidence that it will be a continuous programme, rather than stopping and starting?
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, I congratulate the noble Lord, Lord Roborough, on securing this debate and all noble Lords who have taken part. The debate has covered a wide range of topics and there has been a large number of questions. I will do my best to answer them, but clearly I may well have to write to noble Lords on some areas.
I start by confirming that the Government are committed to improving the quality of life for people right across the country, including those who live and work in rural areas. To achieve this, we must ensure that the needs of people and businesses in our rural areas are at the very heart of our policy-making. We have recently announced our farming new deal. This will support growth in the farming sector and rural communities, and is determined to return farm businesses to profitability.
One of the underlying problems for farmers and the wider rural community is simply that farmers do not make enough money for the hard work and commitment they put in. One of our commitments is to make farming more profitable. That approach is underpinning our 25-year farming road map and our food strategy, through which we will work in partnership with farmers to make farming and food production sustainable and profitable. We have already begun holding farming road map workshops with key stakeholders from across the farming sector, and we plan to publish the road map this summer.
Our support in this for farmers rests on three principles. I thank my noble friend Lord Davies for his support for the farming initiatives we are undertaking. The first principle is our commitment to the sector that has food production at its core. The role of farming will always be to produce the food that feeds our nation. The instability we have seen, both relating to Ukraine and during Covid, shows that food security truly is national security, and we need to move forward in this area.
The noble Baroness, Lady Shephard, particularly mentioned food security and is absolutely right. We need to act to support food production. We are using our own purchasing power as a Government to back British produce, and we have also announced a five-year extension to the seasonal worker route.
A number of noble Lords mentioned trade and new trade agreements. I absolutely understand farmers’ concerns in this area. Supporting farmers in new trade agreements is a priority. We have been clear that we will protect farmers from being undercut by low welfare and low standards in trade deals. We will continue to maintain our existing high standards for animal health and food hygiene. The Government are also committed to developing a trade strategy that will support economic growth and promote the highest standards of food production. On tariffs, I am afraid that at this time I am unable to say anything further than the Business and Trade Secretary’s Statement this morning in the Commons.
Our second principle is that this is a sector in which farm businesses must become more resilient and more able to withstand the shocks that disrupt farming from time to time. That could be severe flooding, drought or disease. We want to help farmers who want to diversify their income to put more money into their businesses in order to survive those more difficult times when they come.
We will give farmers the power to diversify their businesses by speeding up the planning system. In the spring we will consult on how we transform the planning system to ensure that farmers and growers, or their landlords, can build and repurpose buildings on their farms to support their businesses. We will ensure that permitted development rights are working for farmers so that they can speedily convert larger barns into a farm shop, for example, or have the option to set up holiday lets. These changes address long-standing concerns that current planning rules hinder farm businesses from becoming more productive and environmentally friendly.
The third principle is nature. Noble Lords have spoken about this, particularly the noble Lord, Lord Teverson. Restoring nature is vital for food production. We do not believe it is in competition with it. Healthy soils, abundant pollinators and clean water are the foundations that farm businesses rely on to produce high crop yields that actually turn a profit. Without nature thriving, there can be no long-term food security. That is why last year we were pleased to announce £5 billion for the farming budget over 2024-25 and 2025-26. We now have more than half of farmers in environmental schemes supported by this budget.
However, several noble Lords raised concerns about the recent closure of SFI to new applications and the implications of that decision on farmers, nature and the wider rural community. The Government have allocated SFI a budget of £1.05 billion for 2024-25 and 2025-26. That is money that will go into farmers’ pockets and the wider rural community. I know that people have been concerned about the sudden closure of the scheme, but we want to continue to support farmers to transition to more sustainable farming models through a range of schemes and grants. We will announce details of the revised SFI scheme after the spending review.
The noble Earl, Lord Shrewsbury, and the noble Baroness, Lady Shephard, asked further about SFI reform. The noble Baroness asked whether this was a permanent cancellation—absolutely not. We are looking to reform the SFI offer before reopening it following the SR decision. The idea is to introduce more sophisticated budget controls to manage the scheme and ensure that it targets public funds fairly and effectively, as well as where it is most needed—where it will make the biggest difference to nature. We know that uplands need further support, for example.
Several noble Lords raised concerns about the effects of the changes to agricultural property relief on inheritance tax in the context of farming and rural communities. We have debated this at length in the past, so I will now look particularly at the mental health concerns that have been raised. We are aware of the effects of the challenges that the issues of SFI and APR have posed to farmers and others in rural communities. We will continue to provide funding for several organisations that are delivering projects to improve farmer mental health. The Government are giving mental health the same attention and focus as physical health through measures such as employing thousands of new mental health support workers.
On that basis, the noble Lord, Lord Roborough, specifically asked about mental health support in the farming and agricultural community. We have set up a dedicated team to address the particular issues that drive poor mental health outcomes in the farming and agricultural sector. We are working with communities, farming support organisations and experts to look at exactly how we can deliver the best in this area. The Rural Payments Agency also runs a farmer welfare forum.
The Government are aware of the specific challenges and opportunities that make rural and farming communities and economies distinctive. The right reverend Prelate the Bishop of St Albans particularly asked about the economy, as did the noble Lord, Lord Elliott of Ballinamallard. We recognise that rural areas have significant potential for growth and are central to the economy. We recognise that, in order to develop the full potential of rural businesses, we also need to focus on small businesses, which are an important part of our high streets and of the rural economy, with many more people self-employed or working in small businesses. The Government are actively working on that.
The Government have made a commitment that all policy decision-making should be rural-proofed. Obviously, Defra leads on rural-proofing, but individual departments are responsible for ensuring that their policy decision-making is rural-proofed, and we work with them to consider that. We know that a prosperous rural economy requires effective rural transport, decent digital infrastructure, the availability of affordable housing and energy, and access to a healthy and skilled workforce. We are doing our best to work cross-government to tackle these issues.
Rural housing was also discussed, particularly by the noble Baroness, Lady Coffey. We are reforming our planning policy to ensure that we can build the homes that our rural communities desperately need, but at the same time we recognise that we need to protect our green spaces and the natural environment. The Government’s response to last year’s consultation on the National Planning Policy Framework reflected on the higher costs of housing delivery in rural areas and the fact that we want to see more affordable housing as part of our ambition to deliver the biggest increase in social and affordable housing in a generation.
The noble Lord, Lord Best, talked about the work of the Devon Housing Commission and how other evidence on rural housing will be included. The draft housing strategy will be published very soon, so that will be taken into account there. He mentioned the rural housing exception sites. The Government are very supportive of and will encourage work on them. On empty homes, local authorities have the power to tackle empty properties—for example, with an empty homes order. Obviously, we are now working on the Planning and Infrastructure Bill as our next step in the reform programme.
The noble Baroness, Lady McIntosh, raised concerns about the planning Bill’s impact on grade 3 or grade 4 agricultural land, and the loss of farmland to energy projects. The NPPF prioritises using lower-quality land and protecting the best farmland for food production. Large renewable energy projects must ensure that any benefits outweigh any negative impacts on prime agricultural land.
The noble Lord, Lord Grayling, asked about solar energy as well. The figure that I have is that less than 1% of UK agricultural land would be used, even in the most ambitious scenario. I am sure that noble Lords are aware, also, that solar farms can operate alongside farming activities—for example, continued livestock grazing. I shall have to get back to the noble Baroness, Lady McIntosh, about further renewable percentages, as I do not have that figure at the moment.
Noble Lords raised the nature restoration fund and how it will be delivered. We are working closely with Natural England and others to ensure that the appropriate resources are in place to administer it, and it will run on a cost recovery basis. We will recover costs through developer payments, which should unlock development more quickly and provide greater assurance of nature restoration.
The noble Baroness, Lady Coffey, and others talked about Natural England’s role. We would not expect land acquisition to be the first delivery model considered, although clearly it is a possible approach and may well be appropriate in some circumstances. It is important to remember that compulsory purchase is only one tool, and we would expect Natural England to consider using such powers only when attempts to acquire land by agreement has failed, and there is a very compelling case in the public interest.
The noble Lords, Lord Fuller and Lord Teverson, mentioned the Corry review. I urge noble Lords to read it—it came out the day before yesterday. We have begun work on fast-tracking nine out of the 29 recommendations. One is particularly pertinent to the farming sector about rapidly reviewing and reworking regulatory guidance. Farmers currently have to consider and comply with more than 150 pieces of regulation, which we think is unfeasible, so we are looking at that as part of it.
The noble Lord, Lord Roborough, asked about the land use framework. We are consulting on that until 25 April. The idea is that it is not going to tell anybody how to use their land or what to do with it; it is not the intention to use it to make binding decision-making for land or prescribe specific outcomes. It is intended to advise those managing the land and who are preparing local strategies or plans. Clearly, there will be more information on that once it is published.
On health, which was mentioned by the noble Lords, Lord Kakkar, Lord Elliott and Lord Harlech, demographics show that, as they age, people move out of towns and cities to coastal and rural areas, so they are putting the most pressures on the health services at the time when they are going to need most care. The integrated care systems in England should have a specific role to play on that—but I completely understand where noble Lords are coming from, as I live in a very rural area myself. Travel times in Cumbria to healthcare are long and we have poor roads, so it can take an awfully long time. One reason why I am very pleased to be on the Child Poverty Taskforce is because those kinds of aspects of poverty and access to health are a fundamental part of the discussions that we are having.
A number of noble Lords, including the noble Lord, Lord Elliott, and the right reverend Prelate the Bishop of St Albans, mentioned the bus services Bill, which will deliver new powers to local leaders to empower them to choose the model that works best in their area. Clearly, that will include rural services, because buses are vital, and they have been disappearing at far too great a rate in rural areas.
The noble Lord, Lord Roborough, mentioned delinked payments. I declare an interest, because I am in receipt of delinked payments, so I have a very clear understanding of how rapidly they have been going downwards. But we have provided a calculator so that farmers can see the impact that the reductions could have on their 2025 payments.
The noble Lord, Lord Roborough, asked a whether the budget for Weybridge was part of the farming budget. I can confirm that it is separate. The noble Lord, Lord Horam, asked about private investment in tech and innovation. Since 2021, the farming innovation programme has attracted over £54 million in private investment in addition to the £152 million that Defra has committed; it is an important part of what we do.
Tenant farmers were mentioned by the noble Lord, Lord Fuller, and others, and the noble Lord had some very interesting other ideas and thoughts. Defra is working collaboratively with industry representatives to address the challenges faced by tenant farmers, through the Farm Tenancy Forum. The lack of affordable local housing for tenant farmers who want to retire from a tenanted holding has been identified as a key barrier; again, we are looking at that. We have started the recruitment campaign for the commissioner for the tenant farming sector, and that is now live.
The noble Lord, Lord Carrington, asked about research and innovation. As I said, a lot is available if farmers know where to look. We need to figure out how we work with people to make sure that such things are accessible.
The noble Lord, Lord Douglas-Miller, mentioned bovine TB. The Government started work on their new bovine TB eradication strategy to drive down TB rates and end the badger cull by the end of this Parliament. A key part of the strategy is to drive forward the ongoing development of the cattle vaccine. We are working closely with farmers, vets, scientists and conservationists to rapidly strengthen and deploy a range of disease control measures. We are also going to introduce the first badger population survey in over a decade, so that we can have a data-driven approach to inform how and where TB vaccines and other eradication methods are employed. We will also establish a new badger vaccinator field force.
The noble Baroness, Lady McIntosh, asked whether we are helping farmers to support water on farmland. We have committed to a record £2.65 billion floods investment programme, which will deliver on natural flood management; the impact of a project on agricultural land will be included as part of the funding calculator. In addition, we have published a rapid evidence assessment, conducted back in 2024, of flooding and coastal erosion on agricultural land and businesses. That also discusses the evidence for agriculture as a provider of natural flood management.
I am about to run out of time. In conclusion, I have genuinely listened very carefully to noble Lords’ concerns, because I appreciate that there is a lot of concern about funding and support for farming at the moment. It is important to recognise the huge interest and knowledge that this House brings to these discussions. We have had several rural debates in the Chamber and, of course, in the other place. I have also heard separately from many Members who are concerned about the issues faced by the rural areas they live in or have previously represented. I will take those concerns back to the department. The Farming Minister, Daniel Zeichner, is also very cognisant of all this.
I have run out of time, so I wish the House a very restful break and a happy Easter—
Lord Bilimoria (CB)
Before the Minister sits down, I asked several questions and raised many points—not one has been answered. I would be grateful if she put a Written Answer in the Library.
Baroness Hayman of Ullock (Lab)
I did say, right at the beginning, that I would not be able to get to everything within the time and that I would write concerning questions that had not been answered.
Lord Roborough (Con)
My Lords, I am grateful to all noble Lords who have spoken in support of this Motion, and to the Minister for attempting to answer as many questions as she could in the time available. I look forward to her later answers to those that were missed.
I will summarise and highlight a few points. The noble Lord, Lord Davies of Brixton, made a very welcome contribution to the debate, but I take issue with his comments about inheritance tax on family farms and family businesses. Family businesses are the lifeblood of our economy. Without them, we would not have Pearson, Rolls-Royce, GKN, Tesco, Marks & Spencer, Whitbread, Sainsbury et cetera. Large businesses start as small businesses, and they are started by individuals and families. At the moment, we have companies like Dyson and JCB, which are private companies and are thriving.
We on these Benches want fair treatment for all family businesses and to allow them the chance to compete effectively with public and overseas companies so that they can grow into future champions of our economy. Having to be prepared at all times to pay a 20% IHT charge, as well as funding the dividend tax liability on that, is highly damaging. I would go further than my noble friend Lady Shephard and others—all family businesses, including farms, need these reliefs to thrive.
My noble friend Lord Grayling made a powerful case that it is absurd, when we have so much land that is not the best and most versatile, that the Secretary of State for Energy continues to permit so much solar development, in particular on this best and most versatile land. I also completely agree with him that housing development should be prioritised on brownfield land before greenfield is taken.
A number of noble Lords spoke about the disparity in opportunity, healthcare, et cetera, between the rural and urban environments. I particularly noted the powerful discussion of the noble Lord, Lord Kakkar, of access to emergency and chronic healthcare, and the right reverend Prelate the Bishop of St Albans highlighting the productivity gap between the rural and urban environments. The noble Lord, Lord Elliott of Ballinamallard, highlighted the planning constraints on livestock farms in Northern Ireland that make it so difficult to improve animal welfare and allow for better management of animal waste. It was encouraging that the Minister mentioned ongoing work to allow farmers to do more on the planning front to support their businesses. I hope the Government will consult widely on that.
The right reverend Prelate the Bishop of Hereford summed up the mood in the countryside. There is an all-time low in morale, which means there is a huge opportunity for this Government to improve things. I hope that some of the suggestions raised in today’s debate will be taken forward. In the meantime, I beg to move.