Lord Fuller
That this House takes note of the Government’s record on the rural economy.
Lord Fuller (Con)
My Lords, I spent yesterday standing in a field in that new spiritual home of British agriculture, Diddly Squat Farm in Oxfordshire, for the cereals trade show. Nearly 20,000 farmers, growers, advisers, machinery dealers, drone flyers and, yes—by way of declaration of interest—fertiliser suppliers such as myself, huddled under umbrellas, wearing wellingtons, talking trade. The host, Jeremy Clarkson, has said that there cannot be a single farmer left who supports this Government. I can tell noble Lords that my experience yesterday proves him correct.
Indifference from a north London-based Labour Party sadly has morphed into a hatred of those who live in the shires—those who put bread on the table and sustain our nation—with no signs of contrition in the gracious Speech. You know the malevolence has reached an apogee when even the former Secretary of State for Health and the current Mayor of Manchester have realised that this ritual rural abuse must stop. It has taken a while, but those two honourable gentlemen have worked out for themselves that Labour’s war on the countryside has gone too far and must be halted.
It is because the food, drink and agriculture business is big. Agriculture’s annual contribution to the UK economy is £13.9 billion. But this is not a debate about farming alone; the debate is wider than that. This debate seeks to hold the Government to account for the damage they have wrought on those who live in the sticks: the places where the Uber cannot come and collect you from the pub at 11 pm, because either the pub has closed down as a result of Labour’s war on the high street in our market towns, villages and coastal communities, or because there is not an Uber in the countryside anyway. You see, we do different out in the sticks.
It is not just rural pubs. It has been terminal for country house hotels and other hospitality businesses, filleted by extra rates, hobbled by new employment taxes and made unviable with other levies, fees and charges such as the tax on glass bottles.
It is not just hotels; it is also private schools. Many custodians of wonderful grade 1 heritage buildings are the last employers where they have made country towns factory towns: places such as Holt, Marlborough, Oakham and Uppingham. Mostly charities, they are significant contributors to the UK exports for services, but the Government are deaf to that reality. In these places, they are the factories employing hundreds. The people who work there—cooks, cleaners, groundsmen and, yes, teachers—are not rich, but they have been the collateral damage in a class war that has seen them lose their jobs in areas with so few other opportunities. So much for the party supporting the workers.
We have seen £110 million slashed from rural councils with the abolition of the rural services delivery grant. Devon lost £10 million out of £100 million. Norfolk is not far behind and North Yorkshire, our largest rural county, has lost over £12 million, with the countryside being short-changed.
Support for off-grid home owners, people off the beaten track who heat their homes with oil, has been nothing but an inadequate afterthought. Now we see a fresh war on country pursuits, which employ thousands, enhance conservation and dispose of fallen stock while keeping the country pub going in the winter—not with fallen stock, I hasten to add.
On Tuesday, the noble Lord, Lord Deben, raised the inexplicable behaviour of His Majesty’s Revenue and Customs, which refused to refund millions in VAT incorrectly levied on county show societies that could force their insolvency. We see that political indifference is now infecting the behaviours of the departments of state, damaging the cultural life of the countryside.
Now let us dwell on the harm inflicted on farmers, which structurally undermines our food security as the result of the sustained attack on those who feed us. Last summer there was a ham-fisted cessation of SFI, which could have helped the natural world. What an irony that it has led to farmers intensifying production instead. We saw the cancellation of slurry lagoon grants that, more than anything, could have helped reduce river pollution. We have empowered private equity and sovereign wealth funds to compulsorily purchase land for other purposes. All these have shot the environment in the foot—an activity that will be possible only until shooting itself is sidelined.
Thinking of the rural economy more widely, let us consider the inheritance taxes levied on farmers and other family businesses, which are disproportionately clustered around our market towns in modest trading estates. Together, they employ millions in firms handed down in trust for the next generation. However, they are being systematically filleted and starved of working capital in a way that foreign owners, private equity or publicly traded shares held by pension funds are excused from. This spiteful apartheid disproportionately affects firms in the provinces, especially the large number of rural trades involved in food processing, machinery dealing, fencing, ditch digging, plant hire, and any other ancillary trades, such as timber and buildings merchants, and the haulage contractors that fetch and carry supplies.
We see that Labour’s economic illiteracy is chilling the private investment that drives growth, reducing profits today and damaging the corporation tax revenues of tomorrow—all of which pay for schools and hospitals. We have a Chancellor boasting about free bus travel for youngsters in August. If only there were buses in the countryside for them to ride. Instead, those who drive those twin-cab trucks, who know how to get up in the morning, are to be taxed more heavily. All these people need to move about anyway because of poor digital connectivity in our villages. The Treasury boasts that it has taken about threepence off the price of a litre of red diesel, but only until Christmas. This is a Government reduced to gimmickry. All these active harms visited on the rural economy are the result of the smug city dweller, for whom the countryside is somewhere to look down on and patronise: it is all rather provincial, you see. That is part of the problem. This Government misunderstand, underappreciate and malign the countryside; they should stop treating us as second-class citizens.
Like the hopeless apprentice, Labour is not learning on the job, as there are other insults in the pipeline. To mask the manifest failure of housebuilding in the cities, Labour has increased housebuilding targets in rural districts by over 50% to unachievable levels—levels that have never been achieved before. The Social Housing Bill does nothing to promote social housing in rural areas of the sort championed by the noble Lord, Lord Cameron of Dillington. Under the land use framework, 1.7 million hectares of productive farmland—about 20%—will be removed from agriculture. At a typical £2,000 gross income per hectare, that represents a £3.4 billion annual hit to the rural economy—a sector that lost an estimated £800 million last year. The countryside is being made poorer and, if things carry on at this rate, there will be no money left to make it more attractive to the birds and the bees and the other species.
The new SFI is meant to be more environmentally beneficial, with fewer actions, but with a paltry £240 million budget announced today, and capping, it prevents those with the most land from making the greatest environmental impact. Worse, at a time when there is hunger and a need for food security, there is a plan to introduce insane carbon taxes on fertiliser—the farmer’s largest expense. That will do nothing to reduce emissions yet will turbocharge food price inflation at a moment when the EU is racing to reduce the impact. Why are we running towards this danger with a scheme that is architecturally incompatible with that of the EU, and which has additional complications—free allowances, default values, and so forth?
For a country that no longer produces ammonia, the raw ingredient for fertiliser, foreign suppliers are already concluding—I know this from personal experience—that we are becoming far too difficult to deal with. That imperils our food security, because fertiliser forms the foundation of our food chain. Then there is the problematic SPS deal, which will turn back the clock on precision breeding—which drives sustainability and productivity—and ban advances and innovations in black grass chemistry. Here is the rub: Labour is trying to have it both ways on the SPS. It wants dynamic alignment with the EU, without the agricultural support that EU policies require. That leaves British farmers in a worst-of-all-worlds situation: all the costs and none of the revenue.
The EU has seen us coming, something the Government cannot see for themselves, and it will not rest until our best land is given up for solar schemes that destabilise the grid and generate no real income at all. There is no need for the little doers that keep the village stalls going—and to prove this point, yesterday we learned that Clarkson’s farm employs 150 people; converted to solar, it would employ nobody. Labour’s vandalism even goes as far as imposing metropolitan patterns on local councils, extending regional city councils to milk the surrounding parishes to pay off their historic debts. It is all quite a list.
Today I can reveal for the first time another example of this Government’s indifference to the rural economy: in reopening the Ensus plant to produce CO2 for our nation at a subsidy cost of £1 million a day, the first cargos of feedstock to power it were from France. The Government could not bring themselves to require that the wheat for that plant come from British farmers, who are on their knees. Given a free choice, this Government have subsidised French farmers to the extent of £1 million a day over our own. The irony is that none of this would have been necessary, had an unthinking Government not signed away our 1.4 billion litre a year bioethanol business in a trade deal with the US that collapsed grain prices on our shores.
This debate reveals a landscape where there is no one in government who understands or is prepared to stand up and speak for those who can see green outside their windows; just chaotic departments all pulling in different directions. We have a Government who prefer dogma to delivery and are ignorant of the millions who live and work in the sticks, working long hours out in the rain and cold, boosting nature, cherishing our countryside, tending to our herds and crops and making Britain a green and pleasant land. Labour has simply abandoned the countryside, providing nothing in the gracious Speech. It is an omission that will come back to bite it.
Baroness Royall of Blaisdon (Lab)
My Lords, I am grateful to the noble Lord, Lord Fuller, for initiating this debate, but he would not expect me to agree with him on every point he has made. I remind the noble Lord that it was years of austerity that helped to undermine the money going to local councils that he regrets so much—and so do I.
Rural Britain is not peripheral; it is central to who we are. It contributes hundreds of billions to our economy, and it is home to nearly one in five of our citizens. Labour has a proud history of championing our rural areas, from the Attlee Government’s National Parks and Access to the Countryside Act onwards. That was the bedrock of today’s tourism, which contributes to our rural economy. I live in the Forest of Dean, and always have done, where there are no Ubers and a flourishing pub.
If we are to build a resilient and fair rural economy, we must move beyond rhetoric to a genuinely place-based long-term approach that treats rural communities not as recipients of policy but as partners in shaping it—farmers large and small, rural entrepreneurs, and local producers. The Government have rightly reaffirmed their commitment to rural-proofing, which is vital. It must be integral from the outset, influencing decisions on funding, service delivery and infrastructure. It must recognise that the rural economy includes culture and creativity.
I met a wonderful rural entrepreneur this morning, James Grugeon, who lives in Suffolk. Among other things, he works with the Adnams brewery, which will be well known to the noble Lord, Lord Fuller. Their Great Get Together beer will be available in our bars from Monday to mark 10 years since the murder of Jo Cox. I am delighted that the English Devolution and Community Empowerment Act places a legal obligation on mayors and strategic authorities to actively consider the needs of rural communities when exercising their functions. This includes assessing impacts on land use, housing, local employment, health and well-being. I hope that others will follow the excellent example of the UK’s first protected, landscape-led natural health service, which is being piloted by North York Moors Trust as part of the Moving Forward campaign of David Skaith, Mayor of York and North Yorkshire. This will help to improve well-being, reduce loneliness and support people to get and stay active.
Alan Milburn’s interim review tells of the chronic problem of youth unemployment—aspirations thwarted, opportunities lost and futures placed on hold. The land and nature sectors offer fantastic jobs but, too often, young people from urban and rural areas do not know of their potential choices. What are the Government doing to ensure greater awareness of these opportunities, empowering young people to stay in rural areas and have fulfilling careers?
Horticulture makes an enormous contribution to our economy of around £40 billion. It plays a critical role in food security, environmental sustainability and human well-being, yet it remains underrecognised. Crops are essential, but so are our gardens, patios and window boxes, not to mention beautiful RHS gardens throughout the UK. This sector faces a chronic shortage of labour and skills at all levels. We need stronger education pathways and more degree-level study alongside high-quality apprenticeships that enable people to enter and thrive in the sector. The seasonal worker scheme remains essential. The Government’s extension of the scheme and recent reforms to introduce greater flexibility are important, but short-term visa decisions create uncertainty. A more predictable, rolling framework would provide the stability that growers and workers need.
The countryside should be enjoyed by all citizens of our country, not just those of us who are fortunate to live there. I wonder whether any schemes have followed the Generation Green 2 Defra-funded initiative that connected tens of thousands of disadvantaged young people in England with nature. The access to nature Green Paper will be welcome. I recently met a beautiful brown hare while walking across my fields—well, I do not own them, but they are by my house. I am delighted that the Government are committed to the implementation of a closed season for hares. When will the shooting of these glorious creatures in the breeding season cease?
Finally, I hope that the Minister will be able to tell us when the report of the rural task force will be published, likewise, the 25-year farming road map. The rural economy is about not only production, but about people, place and potential. It is about beauty and diversity. With the right long-term approach, it can and must thrive for the benefit of us all.
Lord Cameron of Dillington (CB)
My Lords, it is a great honour to follow the noble Baroness, Lady Royall. I am a retired member of a farming family from Somerset producing food and milk with lettings to domestic and commercial tenants. The first thing to say about the rural economy is that it is not agriculture that makes it tick. Agriculture and forestry actually represent less than 4% of rural employment and rural GVA. Of course, if you add in the support industries and the food chain, it is considerably more, but then many of those businesses are urban-based. So, although the food industry as a whole is vital to the nation’s economy and, indeed, its survival, farming, as such, plays a lesser part in the rural economy than many people think. However, it should be said that farmers also create our wonderful countryside, which helps attract rural tourism, which adds another 4% to rural GVA and also over 12% of all rural employment.
However, the rural economy is now incredibly diverse. There are more manufacturing businesses in rural England than in urban, not per head but per se. For example, in our converted farm buildings in Somerset, we have web designers, microchip manufacturers, school management services, vets, accountants, insurance brokers, hairdressers and even two padel courts. I suspect that we now have more people working on the farm than before the repeal of the Corn Laws in 1846. The rural economy is transformed and, certainly in the western half of England, many of our small farming families depend upon non-agricultural wages, which, when added to the family budget, help keep the farm solvent. In other words, the more diversified the rural economy, the better it is for agriculture.
The biggest problem holding back the rural economy now is the unavailability of labour, and there are two main features of this: housing and transport. The unaffordability and unavailability of rural housing means that the next generation of working families has largely moved to our cities and towns. I am hoping that the Social Housing Bill will help create more affordable houses in our villages and market towns, but that is a very big subject that I do not have time to go into now.
On transport, our rural young have a problem. How do you get to your first job 10 miles away at 7.30 am without a set of wheels, and how do you get a set of wheels without the wages from your first job? It is a Catch-22. The simple answer is that you lend the youngster a moped. There used to be hundreds of Wheels to Work schemes around England that did just that. The youngster was lent a moped free of charge and, after six months in work, had to give it back and get their own set of wheels. The scheme was funded by local authorities and the DWP. Then, as we all know, local authorities ran out of money and the urban-based DWP simply did not get that these schemes cost less per head than the social security benefits otherwise payable to these youngsters. Sadly, nearly all these Wheels to Work schemes have died.
Transport problems do not affect only the young. I have had families explain to me that with the cost of rural childcare and the low local wages available, it does not make economic sense for them to buy a second car so that the second adult can go to work. As I say, unavailability of labour remains a serious impediment to rural growth.
There are other problems for the growth of the rural economy. Most serious is the difficulty of accessing training, but there is also the poor connectivity of phones and broadband, higher energy costs and endless delays in planning. I say to our planners that our villages were made for work, rest and play. Remember the butcher, the baker and the candlestick maker. Villages have never been and should never be just dormitories.
We are an enterprising lot in rural Britain. There are more rural businesses per head than in urban Britain. There is a far higher rate of self-employment. We tend to prefer getting up and trying rather than getting up and taking the dole. We will always survive, but we need support and help to fulfil our true potential.
Baroness Coffey (Con)
My Lords, it is great to see my noble friend Lord Roborough back in his place just in time for this important debate. I congratulate my noble friend Lord Fuller on securing it. There is no doubt that the rural economy, just like most of the UK, is struggling. Unfortunately, some of that is due to recent changes in a variety of areas of employment, but I will not pretend that it has not always faced more challenges than are experienced by most people in this country.
A few years ago, I was lead author on the policy paper Unleashing Rural Opportunity. Even then, I was challenging somewhat the Cabinet Office two-by-two matrix on how we determine median pay and employment. As soon as we took it down to a three-by-three matrix and started looking at district council level, it painted a very different picture from what Whitehall wanted to think was going on, which portrayed all of Wales and Cornwall as exceptionally poor. When you do the detailed work and analysis, it is not the same picture. Within counties, at a district council level, you see quite a difference. That is happening at not only a rural level but a coastal level.
I am conscious that this continues to be a challenge. I appreciate that the Government may be trying to look into it but, unfortunately, as my noble friend Lord Fuller pointed out, there is a systematic degradation going on. It is not deliberate, but it is happening, even on small things such as proposed changes to drink-driving limits. The impact on hospitality in the countryside will be significant, yet there is no evidence to suggest that those sorts of accidents or links are there in the countryside. We have to keep reminding ourselves to think about the minority of people in this country—not necessarily in terms of the land they cover—and how policy driven by Westminster and Whitehall can have an impact.
Plenty of noble Lords will be able to talk about farming or similar. I say to the noble Lord, Lord Cameron of Dillington, that Wheels to Work is definitely still going. It is now often run by charities, and DWP helps to pay for it. I will focus not on the farmers or farriers—all key industries in our agriculture—but the opportunities to which noble Lords have already referred.
It is twofold, about colleges and childcare. More than half of young people cannot get to an FE college within half an hour. That starts to limit the options available to them and what sort of jobs they can do. I am conscious that we want to try to improve opportunities for young people through apprenticeships and the like. We need to keep focused on how we spend the increased amount on bursaries that was provided a few years ago and make sure it is focused on rural young people so that they can get to colleges to open up opportunities for them. It is important that we try to stop the drain of people moving away from the countryside to the cities and major towns by making sure they can get into work.
The other challenge is about being in and staying in work, and that is to do with childcare. When I was in the Cabinet, I failed to persuade my own Government about how to deal with childcare. We regularly talk about 30 hours a week. That is based on 38 weeks a year. It is entirely around school terms. We have seen a significant drop in the number of childminders, which started under a Labour Government and continued under a Conservative Government, while the proposals put forward by the Government are about school-based nurseries and the focus on term time.
A significant part of employment is connected to hospitality in the countryside and on the coast. When do people need flexible childcare? They need it during the summer holidays. I encourage the Minister to work with other government departments to look again, not just to see the rose-tinted view of what life is like in rural areas but to go a bit further into the detail to see why it is that the lowest-paid people and the lowest employment—not unemployment—are in the countryside, and to make changes to reverse that progression.
Lord Taylor of Holbeach (Con)
My Lords, I am delighted to follow the noble Baroness, Lady Coffey. I join her in saying how nice it is to be sitting just behind the noble Lord, Lord Roborough, whose return to the House is, I am sure, welcomed by everybody.
I have a great interest in the subject, having been a bulb grower before I came to this place 20 years ago last Friday. It does not seem long, but it is actually quite a large portion of my life. I am a Holbeachean by name now, and by birth, and I live there. The business in which I was involved is a family business, founded by my grandfather who originally had a 10-acre ex-serviceman’s smallholding after the First World War. He was able to build it up, and I hope I played my part in the system too. Since I became a Minister I have ceased to have any interest so, as a declaration of interests, I am interested in the subject but I have no pecuniary interest in the industry.
I do not know whether any noble Lords read last week’s Sunday Times special supplement on the fastest-growing private companies. It was really quite interesting. I do not think any of us would have been surprised to discover that out of the top 100, 45 were in Greater London and a huge proportion of the remainder were in the south-east and the areas around London. In the east Midlands, where I live, there were three. In the north-east there was one. In the whole of Scotland there were two, and there were four in Wales. These are privately owned companies which, as everybody here will know, are often the most dynamic elements of the economy. It is illustrative of the focus on urban matters, which tends to dominate economic thinking and everything else.
I am delighted that my noble friend Lord Fuller has tabled this Motion. He has been an exemplar of the dynamic, “go for it” entrepreneurialism that is essential in a rural environment. He has also been a key figure in rural local governance, which is an important part of the lives of people who live in the countryside.
I was trying to think of where I should start on this. I did not want to be totally negative, but it is creeping up to nearly two years since we had that disastrous Budget. It was a disastrous start for the Government, particularly their policy in connection with inheritance tax. I remember asking the noble Lord, Lord Livermore, a key Treasury figure, how we could expect investment following the farms and business inheritance tax, and what was the chance of growth. I shared with him a view of growth being the key factor. Before long, as other noble Lords have pointed out, employers whose staff had to travel distances to work were faced with a jobs tax. No wonder we have a rising number of young people who are NEETs, as we call them.
However, I do not want to make my contribution to this debate an anti-government contribution, because farming and rural areas need to feel the Government are with them. We should aim for efficiency and productivity. We may never be self-sufficient in food, but we should see rural England as a resource to be exploited to satisfy the consumer and the retail sector, and the enormous number of people engaged in the processing, packing and distribution of farm goods. The food valley stretching from Grimsby to Peterborough is a major centre for this activity.
I close by saying that I am concerned about SPS dynamic alignment. I was at the briefing, and the noble Lord replying to this debate was there as well. I hope he can reassure those of us who are concerned about the consequences and that it may lead to greater regulation. We are in business to grow and produce food, not to fill in forms.
Lord Douglas-Miller (Con)
My Lords, it is a great pleasure to follow my noble friend Lord Taylor of Holbeach, whose knowledge in this area, as we heard, is very considerable. I also declare my farming interests as set out in the register.
So often, Labour Governments present themselves as friends and champions of the rural economy. But as we are seeing very visibly with this Government, the reality is somewhat different. Our rural way of life is being constantly eroded by the views of the urban majority, and our farming infrastructure and ability to grow food dismantled by ill thought-through policy and taxation.
I mean no disrespect to the Minister, but one of the key reasons for this, which I have mentioned before in the House, is that Defra simply has no one on its senior management or ministerial team who has any real-world farming knowledge, or farms on sufficient scale to understand the impact of this Government’s legislation. As a result, Defra Ministers and civil servants rely on very questionable advice from arm’s-length bodies such as Natural England, which are themselves populated by quasi-academics with their own ideological agenda, who have little or no understanding of how our rural communities work and often display a breathtaking level of political overreach. This translates across into Labour rural policy. Conceptually, the inverse would be like asking the senior management team of the National Farmers’ Union to run the Treasury—although some might argue that is not such a bad idea.
Seriously, protecting food security, growing the rural economy and maintaining the social fabric of the British countryside requires much more than just ideological theories and political slogans. It requires real, practical, effective and consistent policies that balance economic development, food security and conservation with the more nuanced elements of rural life.
The Labour Party’s approach to the rural economy has been quite the opposite, with policies such as the family farm tax, increases to the minimum wage, increases to national insurance contributions, withdrawing SFI at no notice and the banning of rural traditions such as trail-hunting and the use of lead shot. All these have caused farmers and those who live in the countryside severe economic hardship and a great deal of mental strain. Simply put, the rural economy feels, for good reason, under siege from Labour.
Let me return to the issue of policy consistency. Successful land management, food security and rural prosperity require clear, consistent planning and a long-term approach. I urge the Minister to tell his colleagues that frequent, unsignalled policy changes and endless U-turns create uncertainty for rural businesses, unsettle investors and create serious cash-flow problems for the sector—all of which lead to the sluggish and demoralised situation that we face now.
I close by asking the Minister three things. First, will he maintain a clear head when looking at banning or further restricting rural activities? Those pressing for a ban never understand the whole picture, and although they might outweigh in sheer numbers those who participate in these rural activities, that neither justifies nor validates their opinion. Secondly, will he publicly acknowledge the real-terms impact that inflation is having on farming budgets and look again at support, particularly direct support for fertiliser costs, to ensure that food continues to be grown across the UK? Thirdly, will he reverse the crippling APR and BPR tax charges on family farms and businesses, which continue to cause economic and emotional agony across the whole farming sector?
Lord Howard of Rising (Con)
My Lords, I declare my interest as a farmer and the owner of a country estate.
When considering the rural economy—which, after all, consists mainly of people working hard for long hours with little reward, frequently for the good of others—we should remember that the English countryside does not look like it does by accident. It does so because of the endeavours of those who live and work there. For example, who takes care of the waste that costs the economy £1 billion a year? It is the farmers who pick up the large-scale dumping—and there is plenty of it. It is the public who organise litter picks to collect the stream of discarded tins and fast-food wrappers.
The Government missed the opportunity to put in the Crime and Policing Act powers for the police to seize the vehicles of litter louts, rather than waiting for local authorities to act. If you want to stop dumping, there needs to be a meaningful deterrent. If people thought that discarding a McDonald’s wrapper would cost them their car, they would think again.
However small their enterprises, farmers and landowners trim hedges, examine trees for potential danger, clear ditches, remove obstacles from footpaths and perform many other unsung acts of maintenance. When discussing the rural economy, your Lordships should bear in mind that the headline statement of income and expenditure, miserable as it is, omits the considerable burdens borne by those living and working in the countryside.
As my noble friend Lord Fuller pointed out, the Government make life harder for the rural economy. The average rural post office faces a fourfold increase in business rates compared with 2023-24. More and more pubs are shouting “Last orders!”: 161 pubs closed in the first three months of this year. Why add further unhappiness by attacking country sports? Banning trail-hunting is pointless and unnecessary. It does no harm but provides a welcome respite from the hard work and long hours associated with most countryside activities, and it contributes greatly to the rural economy.
The Church of England is responsible for the parishes, which are still a significant part, even now, of local communities. The consolidation of parishes means that there are fewer parish priests. Why does the Church of England not use some of its enormous wealth to maintain more parish priests and pay them better, rather than expanding bureaucracy and wasting money on trendy causes?
The fundamental truth of the countryside is that the majority of people involved in it are there as much for the love of the countryside as for making a living; generally speaking, there are no great riches in the countryside but it is a rewarding way of life. It would be even more so if government interference and impediment could be reduced. Today’s farmers spend as much time looking at spreadsheets, filling in forms and complying with directives—many of which are pointless—as they do farming. It is understandable that the country should maintain the ability to feed itself, and that might involve subsidies, but perhaps applying for them could be made a little less arduous.
Lord Farmer (Con)
My Lords, the memoir of the noble Baroness, Lady Batters, titled Harvest: A Farmer’s Story of Heritage, Home and Hope, has just been published. I notice that she dedicated it:
“To farmers, their families and all those who feed us”.
That is a fitting reminder of the importance of today’s debate. While the rural economy is not restricted to farmers, as we have heard, their interests and those of our whole society overlap existentially. International threats abound today, and the blocking of strategic shipping lines is a warning shot across our bows that national resilience requires domestic food production to flourish. In a free-market economy, that means that farming simply must be profitable.
As my entry in the register of interests states, I am a Farmer not only by name but by occupation. I have a farm in Hampshire and am deeply committed to the prospering of rurality.
Confidence among British farmers has fallen to historic lows: the NFU found that nearly two-thirds say that profits are declining or their business may not survive. Government polling found that only around a third feel positive about their future in agriculture. When I talk to other farmers I get a similar sense of their mood. They are asking, “How long can we hang on under the current economics of farming before having to throw in the towel?”
These economics include a low grain price, high fertiliser costs and ever-growing restrictions on pesticides. Andersen Consulting has said that last year agflation was running at 8.4%, well ahead of CPI, at 3.3%, and the prices for farm outputs were down 6.5% from the previous year. Farmers also face acres of form-filling and communications with Defra officials who seem to talk in a foreign language. They say the negative signals from these factors adversely influence whether the next generation will want to farm at all. Farming is already in the hands of relatively few people, and many are of the older generation and struggling to find skilled hired hands to farm with them.
Research confirms that our self-sufficiency is declining, particularly in certain sectors. We cannot discount the possibility of a tipping point, when British agricultural production, in effect, collapses to become irrelevant relative to the quantity of produce required to feed the population.
We had reached a similar crisis point in the 1930s, and it took significant public investment to bring UK agriculture back to life. Then there were many more people involved in agriculture and a much bigger pool of capable farmers to re-energise production. Today’s reduced numbers make this far harder—and robots are not the answer, although they might help at harvest time. Modern technology, such as combine harvesters guided by satellites, is undoubtedly much more sophisticated. But we will still need human beings for when the robotic combine header bends and needs mending. There is always a surprising number of mishaps affecting farming the whole time.
Do new employment laws allow for the exceptionalism of farming? At points in the year, very little goes on. Some farmhands work only seasonally. If people want to live in relatively remote places such as Shetland, they are required to run several jobs according to the season, and that is the norm. Should we encourage such norms to develop in farming?
In closing and to reiterate, we need to be resilient. When it comes to farming and food production, we are not. What will the Government do about this?
Baroness Pitkeathley (Lab)
My Lords, I thank the noble Lord, Lord Fuller, for tabling this debate and declare an interest as a resident of that most rural of counties, Herefordshire.
Last Sunday, I was in my local village hall, on the banks of the River Wye, cooking and serving breakfast for up to 50 people. The menu, if noble Lords are interested, was cereals and fruit, a full English with vegetarian and gluten-free options, and unlimited toast, tea and coffee, all for £6, with the profits being shared by the village hall and the local church. This event takes place on the first Sunday of every month. I mention it as it is typical of the activities which happen in so many village halls in so many villages. It is on village halls that I shall focus my brief contribution today.
Village halls serve as a vital community anchor, providing a wide range of benefits. They foster social and community cohesion and offer a neutral, accessible gathering space that brings together people of all ages and backgrounds. That helps reduce social isolation, particularly for elderly residents and those living alone. It fosters a sense of local identity and belonging. They have a role in health and well-being, hosting fitness classes, sports clubs and recreational activities. They provide venues for mental health support groups, carers’ groups and well-being programmes, and give older residents access to social activities which support physical and cognitive health. They are well known as venues for playgroups and nurseries.
They often serve in other ways with local services and support—as polling stations, post office drop-ins and GP surgery outposts in areas where these services have retreated. They host food banks, community larders and emergency relief efforts, and provide a base for Citizens Advice, debt counselling and other such support services. We must remember that problems of debt and poverty exist even in the most beautiful surroundings.
My noble friend mentioned cultural and educational life, and village halls make a huge contribution here. Our local village hall is transformed into a theatre when the local pantomime is produced. They host concerts, film screenings, art exhibitions, education classes, language groups and craft workshops. Your Lordships may be thinking that these things are not vital to the rural economy—a bit on the soft side, perhaps. I dispute that, as anything that helps community cohesion helps the economy.
Let me point out some of the more specific contributions to the economy. They provide affordable venue hire for small businesses, markets and tradespeople, and support local employment through hall management and events. I have seen many a volunteer develop skills to take into the workplace by volunteering to do the bookings and co-ordinating events. I have seen people who, following a major illness, have developed their skills so that they can go back into the workplace.
Think of what happens when there is a flood, of which, unfortunately, there are too many nowadays. Village halls act as emergency rest centres, where people can take refuge after a flood, power cut or other crisis. They serve as co-ordination hubs for the community emergency services.
Village halls contribute to democratic and civil life. They host parish council meetings and public consultations—how do you get a neighbourhood plan unless you have a gathering at your village hall?—and, of course, local elections. They give communities the space to debate, organise and hold authorities to account. In rural areas, as we have heard, the village hall is often the last remaining community building when all the other buildings—schools, pubs and shops—have closed, as all too frequently they have, sadly.
For all these reasons, I hope that the Government and local government recognise the contribution of village halls and the vital role that they play in rural life. I hope the Minister will acknowledge this and understand that any support given is repaid tenfold by the contribution of the volunteers who work so hard to keep them going, as an essential component of a living countryside, cementing the bonds of community, where people know and care for each other.
Viscount Goschen (Con)
My Lords, I declare at the outset that I live in rural Devon and own a small farm.
This House has a great deal of experience and expertise in farming and rural affairs, as demonstrated in the debate. However, I lament the experience that has been lost with the departure of so many of our colleagues who spoke so powerfully and with such personal knowledge on rural affairs and related matters.
In the short time available, I will cover only two points. The first is how policy that affects rural areas is made and communicated. A related point is the bond of trust that has to be present between the regulators and the regulated. I regret the distrust that perhaps has emerged, particularly since the IHT debacle, and the wedge that has been driven between the Government and so many who operate in rural areas, particularly those who have farming interests. It is important that that is rectified, so I very much look forward to what the Minister says.
The Government have made many of the right noises. For example, an interesting policy paper about rural-proofing was published in May 2025. It needs to be done, but the question is whether it has had any real impact and whether the taskforce that has been established is powerful enough, for example, in discussions with major departments such as the Treasury. That remains to be seen.
I will leave the detail of a debate on farming specifically to colleagues who have much greater experience and expertise than I, but note merely that farming is a long-cycle, capital-intensive industry making marginal returns, which is greatly influenced by government policy, and global commodity markets and trade policies. Above all, farmers need clarity and stability over the medium term against which they can make decisions. There is a lack of confidence that food production and security really are at the centre of policy-making. That has to change. There must be a bond of respect and trust between those who make policy and those who execute it.
I listened with great care to what my noble friend Lord Douglas-Miller had to say on this subject. We look forward to the 25-year road map, though 25 years sounds a bit ambitious when we are hearing important policy announcements that appear to be reversals of earlier policies, particularly around environmental impacts. You just have to look at the kites being flown around a potential requirement for a 25% reduction in livestock grazing. These are incredibly important policy areas and farmers must have confidence that their regulator and sponsor department understand the dynamics of their business and industry. That was something of a plea. The Government should listen carefully to what rural advocacy organisations say on that front.
In my remaining few seconds, I will say a word or two about transport. Travel by car is not a luxury in rural areas: it is a necessity, given that there is sparse public transport available. Loading tax and regulatory burdens on to motorists has a disproportionate effect on rural communities, where people need their cars to move around, get to work and get on with their lives. There is simply no alternative. Our rural road network is a disgrace, and this is not a party-political point: it has occurred over a variety of local and national administrations. Proactive maintenance such as ditch clearing, flood prevention and pothole mending to prevent major schemes being required is important. I look forward to the Minister’s response.
Baroness McIntosh of Pickering (Con)
My Lords, I welcome my noble friends Lord Goschen and Lord Roborough back to their positions, and I congratulate my noble friend Lord Fuller on securing this debate, which I welcome very warmly.
What is a rural area? We know that rural areas in the UK generate over £250 billion annually for the national economy, yet the cost of living is a very real issue in rural areas. Wages are often lower, yet the costs of housing, transport and heating are higher, and it is more expensive to deliver public services in rural areas. The Government loosely define a rural area: its definition is literally everywhere other than an urban area. An urban area is a settlement with a population of 10,000 or more, based on the 2021 census. A rural area thereby includes rural towns, villages, hamlets, isolated dwellings and the open countryside. The rural population in 2021 was 9.5 million, representing 16.9% of England’s population. North Yorkshire, a part of which I was proud to represent in the other place, is a very sparsely populated and largely rural area, with 623,370 residents covering over 8,000 square kilometres. It is sparsely populated and, in parts, quite isolated.
What is a rural economy? It covers all economic activities, as we have heard, and industry employment in non-urban areas. While primarily agricultural in nature, a rural economy is diverse, covering manufacturing, engineering, tourism, professional services and the digital economy.
What are the challenges facing the rural economy? I will focus on farming as the major contributor and the one activity of which I have the closest knowledge. It is a source of great concern to me that, while the level of support is falling and the challenges and pressures on productive farming are growing, there is now a funding gap as farm incomes are going down. British farm payments are being slashed; at the same time, environmental schemes, including the SFI, as we have heard, are very slow to be introduced. There are particular challenges to upland farms, small family farms and tenant farms. Those three groups are facing the greatest challenges. On top of that, as we heard from the noble Lord moving this debate, there are geopolitical challenges: hostilities in Ukraine and the Middle East are threatening the supply chain, increasing costs, and, closer to home, clean energy schemes are taking 10% of some of the most productive farmland out of farming. The countryside is being blighted by solar farms, battery storage plants, wind turbines, pylons and overhead wire transmission. These schemes are threatening house prices and ruining the peace and quiet enjoyment of rural dwellers. The Government are focusing more on nature, oblivious to the fact that farmers have a closer and better understanding of farming than anybody else. They are wedded more to the environment than to boosting food production, yet environmental schemes do not put food on the table. I urge the Government to increase food security and resilience to the risk factors and increase our self-sufficiency in food.
Market towns such as Thirsk, Malton and Pickering are the hub of the rural economy. Often, in areas such as North Yorkshire with a thriving livestock presence, there is a mart. I urge everyone to visit their local mart because it will have some of the best food.
The future of livestock production must be ensured. Farmers, as we have heard, are the unsung heroes at the heart of the rural economy, not just producing food to eat but performing vital functions such as clearing the roads of snow in winter, draining low-lying watercourses at times of floods and manning parish councils. I urge the Government to seek mutual recognition rather than realignment of standards with the EU and, more especially, to refocus the rural economy and ensure that all their efforts, through land use and management, prioritise farming and food production over energy and environmental schemes. The Government started off promising a lot on the rural economy. Now they must deliver.
Baroness Grender (LD)
My Lords, I thank the noble Lord, Lord Fuller, for bringing forward this important discussion, and I welcome back the noble Lord, Lord Roborough, after a brief interregnum.
To repeat what the noble Baroness, Lady McIntosh, has said, our rural economy contributes over £240 billion annually and encompasses most of our land. It is central not only to our economic well-being but to our environmental stewardship and, particularly in a difficult week on this front, to our national identity. Yet, for all its importance, rural Britain too often feels like an afterthought in policy-making.
As the Rural Services Network has observed, rural communities are asking not for special treatment but for fair recognition—the opportunity for people and businesses in every part of this country to thrive. At present, that opportunity feels increasingly out of reach. The Rural Services Network points out that urban authorities receive some 40% more in funding per head of population than their rural counterparts.
The pressures are considerable. Farmers and rural businesses face the growing reality of extreme weather, from flooding that devastates farmland to heatwaves that reduce yields. Indeed, three of the worst five harvests have happened since 2020. At the same time, as pointed out by the noble Baroness, Lady McIntosh, global instability, including Russia’s invasion of Ukraine, has driven volatility in energy and fertiliser prices, placing further strain on already tight margins.
However, many of the structural weaknesses that we now see are not new. They stem in part from decisions taken over the past decade and longer. The Conservative Government presided over a series of changes that left the sector more exposed: the Brexit settlement introduced significant friction and red tape into export markets, while the trade agreements with countries such as Australia and New Zealand raised legitimate concerns about undercutting our own domestic producers. The transition away from the basic payment scheme was undertaken without a fully operational and trusted replacement, leaving many farmers navigating uncertainty at precisely the moment they needed clarity. My noble friend Lord Foster’s committee on our rural economy in 2019 got a rejection for many of its recommendations, such as a mandatory rural impact process for all legislation to end the decades of inbuilt natural urban bias.
That said, it would be wrong to suggest that the current Government have steadied the ship on this front. Too often, they appear to be continuing along the same uncertain path. Changes to agricultural property relief, as we have heard from other Peers, and national insurance have caused real anxiety among family farms, many of which operate on narrow margins and depend on long-term stability to survive. Policies that are perceived to penalise succession risk undermining the very fabric of rural communities.
Particularly troubling, as touched on by many, are the continuing difficulties surrounding the environmental land management schemes. Nearly a decade after the Brexit referendum, we still do not have a system that commands widespread confidence. The closure of the sustainable farming incentive to new applicants due to a capped budget has sent deeply damaging signals into the community. Reports of very limited uptake in the higher-tier schemes, alongside the exclusion of common land in many cases, suggest a system that is not as yet fit for purpose.
What is needed, going forward? From these Benches, we believe that the starting point must be long-term certainty. That requires, for instance—and it will not be the first time I have talked about it this week—a statutory national food strategy, embedding accountability and ensuring that food production, environmental sustainability and public health are considered together, rather than in isolation. We also believe that the farming budget must reflect the scale of the challenge. An increase in investment is not simply support for one sector; it is an investment in our national resilience, environmental recovery and economic stability.
This week, my Liberal Democrat colleague Daisy Cooper MP set out the Liberal Democrats’ essential energy guarantee, designed to give every household a basic allowance of cheaper energy, with additional support for those in greatest need. In rural areas, where homes are often harder to heat and businesses depend on energy-intensive operations, that kind of reform is not an abstract ideology. It is a practical response to a very real economic burden. The pressure on rural households is compounded by the cost of energy.
Equally important is the question of skills and workforce. Agriculture and land-based industries should be seen as dynamic, forward-looking career paths. There is significant untapped potential, particularly among young people who are not currently in education, employment or training, as we have been discussing only today and last week. A targeted programme bringing together training, paid experience and clear progression could help to renew the sector and ensure that innovation in areas such as agritech and sustainable land management is driven by a skilled domestic workforce.
Finally, we must recognise that food security is inseparable from national security. In an increasingly uncertain world, that resilience matters. This does not mean retreating from trade, but it does mean ensuring that domestic production remains strong and viable, with a more strategic approach to self-sufficiency, combined with fairer supply chains and stronger protection, especially for our rural producers.
The rural economy has immense potential, but it cannot thrive on the current scenario. It requires consistent policy and genuine engagement. Rural Britain does not seek any kind of special favours; it just seeks fairness in terms of the framework within which it can succeed, and I think it is time we provided that.
Lord Roborough (Con)
My Lords, I am grateful to my noble friend Lord Fuller for bringing this important debate to your Lordships’ House and to him and others for outlining the issues so comprehensively and eloquently. Before I begin, I draw the House’s attention to my entry in the register of interests as a livestock farmer, forester and renewable energy developer, and as an investor in Deere & Co, Kana and Agricarbon UK Ltd, which provides services to UK farmers. I should add that I am grateful to my leadership for giving me the opportunity to return and for the warm welcome that I have received today from all parts of the House.
In the previous Session, the Government treated the countryside as a piggy bank that they could raid to finance urban spending. The 50% reduction in IHT reliefs on APR and BPR assets is expected to raise around only £300 million per annum, yet it has a profound impact on family business planning, particularly in the agricultural industry, where asset values are high relative to the incomes they generate. The partial U-turn came only after tireless campaigning, not just from those of us on these Benches, but from farmers and supporters up and down the country. We will not be satisfied until the reliefs return to 100%. Perhaps the Minister, after hearing these arguments today, might even choose to make that commitment, although I doubt it.
The Government have launched new SFIs after the unexpected and unsettling closure early last year. The government announcement this morning of only £240 million for the new SFIs and £50 million for countryside stewardship is deeply disappointing. Can the Minister confirm that this Government’s commitment to spend £2.4 billion on farming in this fiscal year will remain intact and that those funds will be spent only on ELMS and residual BPS and will not be diverted to non-farming uses?
SFIs were supposed to promote sustainable farming, not just to act as a blanket payment. Applications have been capped at just one per farm with fewer sustainable farming actions to choose from and a maximum payment of £100,000 regardless of the farm size. Not only does this remove support for farmers but it lessens the incentives to farm sustainably. Before the end of the previous Session, the Government again dramatically accelerated the reduction of delinked payments. Following the two recent aggressive reductions, farmers’ ability to plan their businesses financially was undermined. As my noble friend Lord Fuller mentioned earlier, the removal of the rural services delivery grant reduced support for the less fortunate in the rural community. In answer to the noble Baroness, Lady Royall, it was her Government that removed them, not ours.
On top of these specific actions, the rural economy shared in the pain caused to business and employment more widely through the increase in employer national insurance contributions and minimum wages and the Employment Rights Act. Rural affairs were completely absent from the King’s Speech. This is deeply disappointing. Grain prices are very low relative to costs, particularly fertiliser, and offer no profit opportunity to farmers. Margins available on new SFIs are compressed, and timber prices are on their knees as housing construction slows, despite this Government’s commitments. Farming and the wider rural economy are in a very dark place, and our food security is diminishing, but it is clear that the Government are not yet finished. More harm may yet be done to our rural economy. Alignment with the EU risks sacrificing hard-won successes and important, ongoing progress. The UK is leading the way in developing a cattle vaccine for bovine TB. Can the Minister guarantee that aligning with the EU animal health framework and veterinary medicines regulations will not slow or hinder that development or the deployment of a future vaccine? In addition, will the UK Government commit to securing a carve-out for gene editing and precision breeding and to preventing any labelling requirements discriminating against its produce?
The new sanitary and phytosanitary agreement does nothing to compensate for the Government’s decision to grant the EU 12 years of continued access to UK fishing waters. That is a lost revenue opportunity for our fishermen to the order of £1 billion per annum. What safeguards are in place for our fishing industry to ensure that it is not threatened further by closer alignment? The Government rejected the EFRA Committee’s recommendation to negotiate a transition period as part of the EU-UK SPS agreement for affected businesses. However, many growers and farmers will be making production decisions now for food sold beyond mid-2027, when this agreement is expected to come into force. What steps are the Government taking at least to ensure a smooth transition for businesses and that those businesses are actively engaged to inform the Government’s approach?
Looking ahead, the Government have pledged to ban trail hunting, despite it being a harmless rural activity that supports jobs and brings rural communities together. Hunting with dogs has been illegal in this country since the Hunting Act came into force in 2005. Why do this Government think it is now worth wasting parliamentary and police time to ban trail hunting? Surely our police have higher priorities, such as tackling waste crime, and the crimes that really do affect rural communities, rather than turning a harmless activity into a criminal act.
The farming and rural community is at a point where it does not believe that the Government cares for it or governs for it. This is a terrible place in which to be. We are seeing this in other policy areas, too, as other noble Lords have mentioned. In energy policy, solar farms are stealing prime agricultural land, rather than making the most of oil and gas in the North Sea to lower energy costs. Last year, the CPRE found that two-thirds of mega solar farms are built on productive farmland. This is at a time when our food security is increasingly at risk. It is beyond urgent that new drilling programmes are licensed and that Jackdaw and Rosebank go ahead in the UK North Sea. The only hope of lowering our fertiliser costs is to produce domestically, and that requires much cheaper gas to be competitive. In mentioning this, I draw the attention of the House to my register of interests as an investor in EnQuest, Valarais and Noble Corporation.
The Government must think clearly in their approach to the rural economy and focus on delivering new income streams to bolster agricultural revenues, which, as we have heard, are not currently sufficient to ensure farming continuity. Defra operates over 700 different services, 300 websites and 100 IT platforms, and uses 600 paper forms. If the Government really want to help farmers farm sustainably and landowners to deliver nature restoration projects, why not implement a single digital platform to improve ease of access?
Not only has harm been done; there have also been missed opportunities. The Environment Agency and Natural England need to get out of the way of the rural economy and the wider economy and enable more private investment to fund nature restoration, water management and other ecosystem services.
The creation of ELMS by our Government was intended to act as a segue into the private sector funding these services. ELMS offered to transmute public goods into private goods that bring tangible benefits to local businesses, infrastructure owners and communities. There is considerable evidence that this is starting to work, with projects such as Evenlode Landscape Recovery making significant progress.
The upcoming water reform Bill must enable water companies to use nature-based solutions, not just to rely on concrete and steel constructions. There is considerable enthusiasm in the sector for doing just this. However, Ofwat and the Environment Agency continue to show distrust of nature-based solutions, despite compelling evidence of reductions in peak flood events, better water retention to mitigate droughts and improved water quality, as well as benefits for carbon sequestration and nature recovery.
We enter this Government’s second Session with a distrusting and abused rural economy. The solutions require two changes in the Government’s mindset. The first is to appreciate that the rural economy is a critical part of our national economy and has to be treated with respect, as highlighted by my noble friend Lord Goschen. I ask the Minister: how many of his Defra colleagues have visited the agricultural shows this season? I do not expect him to answer today, but perhaps in writing.
Secondly, there is the realisation that Governments do not create national wealth or growth—in fact, the opposite. Big government trying to fix all problems undermines individual self-reliance and businesses’ ability to react positively to market forces, ultimately leading to the place we are in now. The Government have raised taxes, increased regulations and increased government debt, causing the economy to stagnate and denying opportunity to younger generations.
I look forward to hearing from the Minister. I am conscious that I have asked quite a few questions, and I am very happy if he needs to reply in writing. I thank all noble Lords who have offered their insights in this much needed debate.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I am grateful to the noble Lord, Lord Fuller, for bringing this debate and to all noble Lords who have contributed to it. I certainly want to add to the chorus of cheers for the noble Lord, Lord Roborough, who is back in his place—asking way too many questions for me to answer. On that note, I will attempt to do as good a job as I can in the time I have, but I will also reflect on Hansard and write to any and all noble Lords if I have not managed to address their points.
It is clear from today’s debate that there is a depth of experience and expertise across all parts of the House on our rural life and the rural economy. It is also clear that the strength of feeling expressed today reflects the importance of the rural economy. It is not—and this Government have never considered or would consider it—a niche concern but a vital part of our national picture and prosperity.
In thanking him for bringing the debate, I gently point out to the noble Lord, Lord Fuller, that I prefer to foster the spirit of co-operation and national endeavour that I hear from the noble Lord, Lord Taylor of Holbeach. Language such as political malevolence, class war and spiteful apartheid masks the efforts and challenges that we all face in promoting and supporting the rural economy in all its breadth and depth. This really should not be a partisan issue in the way that some have sought to describe it.
Labour cares deeply about the countryside and those living and working in it, and we want to promote it. In passing, I point out that the Countryside Alliance, no less, has worked out that 190 Labour MPs represent seats that are at least in part rural. So the countryside is not “the other” for the Labour Party and the Labour Government: it is part of who we are.
We recognise the central role that rural economies play in driving growth, supporting jobs and sustaining communities across the country. Since taking office, we have taken concrete steps to strengthen rural economies and back rural communities through sustained investment, targeted support and a renewed focus on ensuring that rural needs are properly reflected across government policy.
As many speakers in the debate noted, the rural economy contributes £259 billion annually in England alone and supports hundreds of thousands of small and medium-sized businesses. These businesses are not peripheral; they are fundamental to our national growth mission. As many noble Lords—particularly the noble Lord, Lord Cameron of Dillington—have pointed out, the sectors that the rural economy encompasses are diverse and broad. Of course, agriculture is important, but it is by no means the only facet of the rural economy. That is why the Prime Minister’s SME plan represents such a significant step forward. It is designed to support over half a million rural businesses, giving them better access to finance, stronger skills and simpler support to help them grow and thrive.
At the same time, we are cutting red tape, tackling late payments and modernising regulation so that rural entrepreneurs can focus on building successful businesses. To those who say that there is nothing in the King’s Speech for rural businesses, I point to the Bill to tackle late payments, the Bill on regulation, and the Bill on the UK-EU reset—which we have already discussed, and which I will come on to in a little bit. All those will, in some part, have a clear impact on the rural economy and rural businesses. Crucially, we are also cutting business rates for the high street, supporting more than 750,000 retail, hospitality and leisure businesses, including the rural pubs and shops at the heart of our communities.
We have already heard how village halls are at the heart of rural life, and I thank my noble friend Lady Pitkeathley for raising the issue so eloquently. If I am ever in her patch and need a breakfast, I will know where to go. I say to her that, in 2026-27, Defra has given a £1.7 million grant to Action with Communities in Rural England—ACRE—which is England’s largest rural grouping of community support charities. One of the priorities for this grant is for ACRE to support village halls and community buildings, which, as my noble friend pointed out, are very much the lifeblood—the warp and weft—of many parts of the countryside. It is important that communities up and down the country can work with ACRE to use this funding.
I add that ACRE manages, on behalf of Defra, the rural community buildings loan fund, which helps community buildings fill temporary gaps in funding, either for specific projects or for urgent work connected with a building. It is a vital resource, and I am very pleased that the Government are making that investment. I hope it demonstrates our continuing support for village halls, of which my noble friend Lady Pitkeathley is such a champion.
A number of noble Lords—particularly the noble Baroness, Lady Coffey—recognised the importance of training and skills in rural areas, and that their shortage remains a persistent challenge. Through Skills England and local partners, we are aligning training with local needs so that businesses can access the workforce to grow. The Post-16 Education and Skills White Paper sets out a more joined-up system, with clearer pathways for young people into work and flexible lifelong learning, so that rural businesses can access the workforce they need to grow and improve productivity.
We are also delivering the youth guarantee, which aims to give young people extra support to access high-quality learning and earning opportunities. We have committed to £90 million of investment in youth guarantee trailblazers in England to test innovative ways to bring together local leadership to tackle youth unemployment. For instance, in rural areas of north-east Somerset, where, as we have heard, people can face transport barriers, the West of England Combined Authority’s youth guarantee trailblazer is facilitating transport solutions, including e-bike loans.
My noble friend Lady Royall raised the Generation Green 2 scheme. That £4.45 million project, which ended last March, enabled more than 26,000 disadvantaged children and young people to experience the benefits of spending time in the great outdoors. I am pleased to tell my noble friend that the Government support the adventures away from home fund—a £4.7 million initiative, delivered in collaboration with UK Youth, to provide free outdoor learning experiences for disadvantaged young people. As my noble friend said—I think this is a belief that all noble Lords share—it is important to give young people from urban areas the chance to find out about, and grow to love, the countryside, and to consider a career and a life in a rural area.
My noble friend Lady Royall also asked about the seasonal worker scheme. In February 2025, the Government announced an extension to the seasonal worker visa route for five more years, giving farms a pipeline of workers and certainty to grow their businesses. Annual quota reviews will ensure that we strike the right balance, supporting farms while gradually transitioning away from reliance on seasonal migrant labour.
We are further supporting rural economies through our commitment to housebuilding, with £39 billion of investment to deliver the homes that this country needs, ensuring that rural areas have access to affordable housing that supports local people, businesses and growth.
Transport and connectivity were certainly recurring themes throughout this afternoon’s debate—and rightly so, because they are key enablers of rural growth. The noble Lord, Lord Cameron of Dillington, talked about the Wheels to Work scheme, and I am glad that the noble Baroness, Lady Coffey, was able to point out that it is still very much in existence in at least parts of the country.
The Bus Services Act 2025 is an important step in addressing the practical challenges faced by rural residents in accessing work, education and essential services. It places powers in the hands of local leaders, protects socially necessary routes, and is backed by over £3 billion of investment. Crucially, funding now reflects rurality for the first time, recognising the realities of delivering bus services in less densely populated areas. It is also worth pointing out the existence of the Rural Transport Accelerator fund, which has awarded £1.2 million to projects to better connect rural communities.
The noble Viscount, Lord Goschen, was absolutely right to say that for many rural residents the car is not a luxury but an essential part of rural life. He was right to point out the importance of proper highway maintenance, and the bugbear of many people across the country, in both rural and urban areas, which is potholes. That is why I am pleased to be able to tell him that the DfT is committing £7.3 billion of capital funding for local highway maintenance for 2026-30, which allows local authorities to shift from a reactive, pothole-filling strategy to more proactive road maintenance, which I hope will go some way to address the concerns that he raised.
Connectivity is not just a physical thing; it is also a digital thing, which is equally essential to rural economies. Through Project Gigabit, over 1.3 million premises, predominantly rural, have already benefited. This is not just about infrastructure; it is about opportunity, enabling people to work remotely, access services and grow their businesses, and indeed have the diverse economy that many noble Lords raised, not least the noble Lord, Lord Cameron of Dillington, who described the rural economy in his part of the world.
Energy infrastructure is also critical to growth, as talked about by the noble Baroness, Lady Grender. The Government’s approach is clear: we must deliver clean power, but we must do so responsibly. We have announced bill discounts for communities living nearest to new electricity transmission infrastructure. On top of this, we are exploring options to ensure that communities directly benefit from the low carbon infrastructure they host.
On the critiques of land use from the noble Lord, Lord Fuller, the total area used by solar farms is very small. The most ambitious scenarios see up to 0.6% of total agricultural land expected to be occupied. It really is a chimera that somehow solar farms are squeezing out good land, to any great extent at least—it is not more than 1% of decent land that could be used for agriculture.
The noble Lord, Lord Howard of Rising, talked particularly about fly-tipping and waste crime. Of course, fly-tipping is a serious crime which blights local communities, both urban and particularly rural. Dealing with it imposes significant costs on both taxpayers and businesses. We have published a new waste crime action plan, which is the toughest ever crackdown on illegal waste, targeting the problem at its root. We will tighten regulation to close loopholes that criminals exploit, enabling tougher enforcement to disrupt and punish them. We have committed to forcing fly-tippers to clean up the mess that they have created, and Defra officials will soon consult on giving local councils powers to issue fly-tippers with conditional cautions, which could include up to 20 hours of unpaid work and paying back the cost of clean-up for waste dumped on public land.
I know the noble Lord felt that the Crime and Policing Act did not go far enough, but we secured powers in that Act to provide statutory fly-tipping enforcement guidance to support councils in consistently and effectively exercising their existing powers and enabling courts to award three to nine penalty points on driving licences for those found guilty of fly-tipping. We understand that it is a burden on landowners. I remember a number of discussions with the noble Viscount, Lord Goschen. I am pleasantly surprised that he decided not to focus on that in his contribution this afternoon, but I know he is committed to the issue and I hope he will agree that we certainly made movement during the passage of that Bill in the last Session to demonstrate our determination to help rural communities tackle the problem.
It would be remiss to close the debate without paying tribute to the vital work undertaken by this country’s farmers. Farmers are critical not just to food production, as we heard from so many contributions this afternoon, but to environmental stewardship and rural livelihoods. They are very much the lifeblood of our rural communities. We recognise the pressures they face, from tight margins to volatility in markets. We heard from a number of noble Lords about fertiliser costs, including the noble Lords, Lord Howard of Rising, Lord Douglas-Miller and Lord Roborough. It is clear that conflict in the Middle East has increased the cost of fertilisers. We are working in Defra to closely monitor the situation and the Treasury is seeking views on whether the suspension of tariffs on certain fertilisers could help farmers cope with the increase. We are, I should add, investing £120 million in grants and environmental land management schemes to support English farmers to adopt practices that are less reliant on artificial fertilisers. We recognise the pressures that farming businesses face and are clear that, while some of the causes of the problems are beyond our control due to international factors, we are working with the industry to address them as best we can.
The Government are taking action through an £11.8 billion investment in nature-friendly farming, including a £200 million investment in the farming innovation programme, and by bringing together industry leadership via the Farming and Food Partnership Board to remove barriers to farm profitability and unlock investment. On that note, I very much want to take the opportunity to thank the noble Baroness, Lady Batters, for her thorough and insightful farming profitability review, which sets out a clear assessment of the challenges facing the sector and the opportunities ahead. We are now carefully considering her 57 recommendations with the sector and will publish the Government’s response to her review alongside the farming road map. I can tell noble Lords that that will be this summer. I hope that goes some way to answering the questions posed by my noble friend Lady Royall and others about the timing.
I am glad that the noble Viscount, Lord Goschen, recognises that 25 years for the road map is ambitious. We need to be ambitious in scale across all areas of growth in our economy, not least for the rural economy and for farmers. When it comes to the farming profitability review of the noble Baroness, Lady Batters, we have already taken on board her concerns around targeting the sustainable farming incentive support towards active farmers, rather than landowners or developers. Under the previous SFI scheme, one-quarter of funding went to just 4% of farms. We have redesigned it to be simpler and fairer, helping more farms grow, boost productivity and protect the natural environment they depend on.
As the noble Baroness, Lady Grender, and other noble Lords noted, we announced today a budget of £240 million for the new SFI agreements, with the first round of applications opening on 30 June for two groups: small farms and farms without an existing environmental land management revenue agreement. A second application window will open in September 2026, which will give all farmers and land managers the opportunity to apply. Some £50 million is available for new Countryside Stewardship higher-tier agreements this year, supporting targeted environmental improvements where they will have the greatest impact. Together, these schemes will help boost food production, strengthen farm resilience, support nature recovery and underpin the UK’s long-term food security.
A number of noble Lords, including the noble Lords, Lord Taylor of Holbeach and Lord Douglas-Miller, raised IHT and APR. As a consequence of the Government’s announcement in December 2025, around 85% of estates claiming agricultural property relief in 2026-27, including those that also claim for business property relief, are forecast to pay no more inheritance tax on their estates. The changes that we made to the policy in December were welcomed by the NFU. I agree with the NFU and others that the balance is now broadly right. For noble Lords who are critical of the scheme, I repeat the words of my right honourable friend the Secretary of State for Defra, Emma Reynolds:
“It’s only right that larger estates contribute more”.
I hate to disappoint the noble Lord, Lord Roborough, particularly on his first outing back on the Front Bench, but he will not be surprised that I will not comment further on any potential or theoretical future direction of that policy.
We spoke about the SPS scheme. We are negotiating a new SPS agreement with the EU to make agri-food trade with our biggest market cheaper and easier. This will cut costs for British retailers and producers, especially farmers. Obviously, I cannot comment on details as the negotiations are ongoing, so I cannot respond to the questions of the noble Lord, Lord Roborough. However, I point out to him that we have published a new strategy on bovine TB, developed in partnership with the industry. We are running a call for evidence to understand what businesses need from guidance on SPS, so that we can take full advantage of it from day one.
A consistent theme throughout the debate has been the need for the Government to understand and respond to the distinct characteristics of rural life. I cannot answer the noble Lord, Lord Roborough, on how many county shows my colleagues in Defra have been to or might be going to, but I undertake to write to him. I say to the noble Lord, Lord Douglas-Miller, that my noble friend Lady Hayman of Ullock has long experience of farming, so she at least can answer his question. This is precisely why we established a Defra-led rural taskforce that brings together partners from across Whitehall and beyond to strengthen our understanding of how best to support rural life, tackle rural disadvantage and unlock the full potential of the rural economy. I am pleased to say that the report based on the findings of this taskforce will be published shortly.
Time is against me. I know that we touched on trail-hunting, and I saw many noble Lords at the drop-in sessions that my noble friend Lady Hayman held on this. We have a manifesto commitment to ban trail-hunting, but we recognise the importance of rural pursuits to the rural economy and community life. That is why this consultation is important. We want to make sure that we have a clear understanding of all the material factors that are relevant in the development of our proposals for the ban on trail-hunting. My noble friend Lady Royall asked about hares. We have committed in the animal welfare strategy to considering how to bring forward a close season for hares, but we are still working on that and so I cannot share any more detail.
We want a rural economy that is dynamic and growing, communities that are connected and resilient, and people who are able to live, work and prosper wherever they choose. We recognise that there is more to do. Rural challenges, from transport to skills, require sustained focus and long-term solutions, but the direction is clear and I assure your Lordships’ House that the commitment is firm. I hope that, in closing, I have demonstrated the strength of the Government’s record to date and our ambition for the future. I am sure that there are points and questions that I have not covered, so I will reflect on Hansard.
Lord Fuller (Con)
My Lords, it has been an interesting debate and I am grateful to all noble Lords who have contributed. It was a good job that the speaking allocation was increased by 25%, because so many noble Lords had so much to say. It was a pleasure to see my noble friend Lord Roborough back in his seat—back in harness, so to speak—and fighting the good fight.
The Government have painted themselves into a corner on the countryside, but I congratulate the noble Baroness, Lady Royall, on her spirited defence. However, she invites me to make a further declaration of interest, because I am a long-standing, and lately long-suffering, shareholder of Adnams, the brewery at Southwold. Its beers are as good as ever, even though its shares are not quite as plump.
There were so many contributions in the debate, including seasonal agricultural workers, education and rural crime, raised by my noble friend Lord Howard of Rising. We had the tension between alignment and mutual recognition, which is something we will return to in future weeks, with tourism and hospitality. The greatest pleasure I took from the debate was that the noble Baroness, Lady Pitkeathley, raised flooding before my noble friend Lady McIntosh, and then the greatest surprise was that the noble Baroness, Lady McIntosh, did not mention it although it is a hobby horse of hers. We covered housing and transport, from potholes to mopeds.
I was very taken by the comments from my noble friend Lady Coffey, who echoed a previous Secretary of State for Agriculture—it was probably MAFF at that time of day—when she made the important contribution that people in the countryside are not rich. There is poverty, but because it is diffuse it cannot obviously be seen. However, that does not hide the fact that there is poverty none the less. It is harder to see but more difficult to deal with, and I do not think that has always been grasped by urban politicians who can see it right before their eyes.
We have seen the interplay between business, councils, investment and the APR point. Let us not relitigate that, save to say that it particularly benights agricultural businesses because it includes the value of machinery, livestock and cultivations that are a work in progress, in a way that does not otherwise happen.
To summarise, I think we have shown today that the countryside has an empathy, and a love of landscape. There is the commitment to service that the noble Baroness, Lady Pitkeathley, raised, and the importance of hard work. The people in the countryside do not want to be classed as second-class citizens because they love our green and pleasant land. I beg to move.