Rural Economy

Baroness Grender Excerpts

Thursday 11th June 2026 Lords Chamber

[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.