Rural Economy

Earl of Devon Excerpts

Thursday 19th December 2024 Lords Chamber

[The Earl of Devon (CB)]

My Lords, it is a privilege to follow the noble Baroness, Lady Shephard of Northwold. I thank the right reverend Prelate the Bishop of St Albans, not only for calling this debate but for his tireless work on behalf of rural communities. At a time when the Bishops’ Benches are somewhat under assault, it is notable how much work he does. The recently retired Bishop of Exeter similarly did an awful lot of work for rural communities, and the Bishops’ voices are incredibly powerful.

I note my interests as a rural business owner in Devon and champion in this House of a very rural county which suffers from all the problems that have been identified. It suffers from being very beautiful and therefore a place that people imagine is very well-to-do; indeed, many well-to-do people own second homes there—this is Devon. It also has the largest road network in the country, and an ageing population, with all the implications of that. Due to its beauty, it has many crumbling coastal towns built in Victorian and Edwardian times, which cause all sorts of challenges and deprivations.

I also note that I am a supporter of the Great South West, which champions the interests of the rural south-west peninsula. It is focused on three themes: food security, energy security and defence security, which is a good indication of the broad range of services that the rural community provides to us nationally.

In the previous debate, I mentioned that I co-chair the Exeter Partnership. In that capacity, I see myself as a champion and a voice of the rural hinterland of Exeter, within the workings of the city. This brings me to the first point I want to make, which is that this debate and the way in which we look at rural England and the rural economy often seek to draw a line between our rural and our urban communities. I wonder whether that is really that sensible, because what I seek to do within the Exeter Partnership, and what we need to do, is to focus on how wholly dependent upon our rural hinterland is the entirety of our urban population. Perhaps by focusing solely upon rural issues we forget that the urban and the national economy are entirely dependent upon the rural economy for their well-being.

A very wise Minister said recently that

“our biodiversity is in crisis. Without nature we have no economy, no food, no health and no society”.—[Official Report, 11/9/24; col. GC 121.]

The Minister may recognise her words. Our nation is entirely dependent upon the rural economy, so for us to sit here and focus solely upon the rural economy and forget about the rest of our economy is perhaps a false distinction.

I had the privilege recently of meeting Professor Partha Dasgupta, who famously wrote about the economics of biodiversity and reminded us all that there is a vast amount of economic work inherent in the natural capital that resides within our rural communities that we simply do not value and do not identify. Therefore, when we are talking about the contributions of the rural economy to our nation, we need to insist that the Government begin to look much more closely at that natural capital—what is the value of the fresh air and fresh water? Sewage and water companies are being much considered today, with Ofwat’s announcement, but that is all being provided by our rural natural capital—the water that comes into our urban centres and the sewage that departs from them. We really do not think about that nearly enough.

The right reverend Prelate mentioned rural deprivation. On Devon County Council’s behalf, I note that the ending of the rural service delivery grant removes some £10 million from its budget, which is a vast proportion of its budget. Of course, the Government are seeking, perhaps worthily, to redirect those funds to deprived areas but, as has been identified, it is very difficult to identify deprived areas within a potentially wealthy-looking rural county such as Devon. The idea of deprivation requiring a whole area to be deprived is a fallacy; there is deprivation in the most bucolic parts of the country—it is deprivation that is simply not caught or identified by the way that deprivation is currently measured. The county council notes services such as getting children to school, fixing the vast network of roads and simply getting people to doctor’s appointments, et cetera, are incredibly challenging.

I turn to housing and planning in the few minutes that I have left. I take note of the Devon Housing Commission, which reported back in July when we had the change in Government. The provision of affordable housing within our rural areas is in crisis. I know the Government have a plan for 1.5 million new homes, but the challenges of building new homes within variously protected landscapes, the complexity of the planning challenges, the lack of staff within planning departments in rural district councils and particularly the lack of SME builders in rural areas are real limitations, and I hope the Government will look at these.

Budget: Implications for Farming Communities

Earl of Devon Excerpts

Tuesday 5th November 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

As I mentioned in my answer to the first question, most family farms will not be affected. The latest data shows that the top 7% of claims for agricultural property relief accounted for 40%. Regarding food security, we have made the largest ever investment in sustainable food production through the environmental land management schemes and are securing long-term food production through them. As part of the Budget, we announced £60 million for the farming recovery fund to support farmers affected by unprecedented extreme wet weather last winter, which the previous Government had not paid.

[The Earl of Devon (CB)]

My Lords, UK farming suffers a chronic lack of productivity and an ageing cohort of farmers. They have been encouraged to hold on to their farms by virtue of agricultural property relief and the inheritance tax benefit of dying in situ. APR reform may therefore improve matters by encouraging earlier transfer to younger generations. However, it will unduly punish those elderly farmers who have estate-planned with APR in mind. What will the Government do to ensure that those elderly farmers who are terribly stressed by this reform and who will not survive seven years are not unduly punished?

[Baroness Hayman of Ullock (Lab)]

The noble Earl makes an incredibly important point. We are aware that this is an issue. I stress that farmers will be able to access 100% relief for the first £1 million and 50% relief thereafter. That means an effective 20% tax relief rate and that an individual can pass up to £2 million, and a couple up to £3 million between them, to a direct descendant inheritance tax free. It is important that we make that clear. However, I stress again that there is financial advice out there. Many businesses and individuals take tax advice. I encourage all businesses, including farms, to do so.

Independent Water Commission

Earl of Devon Excerpts

Tuesday 29th October 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

The noble Lord makes an extremely good point. Resources and enforcement are a crucial part of ensuring that any legislation is delivered.

[The Earl of Devon (CB)]

My Lords, the Minister has indicated how quickly the Government have sought to address this issue, but they very quickly announced the intention to develop 1.5 million new homes across the country. We are all aware that there are development deserts across the country, particularly catchments affected by the nutrient neutrality rules on phosphates and nitrates. I have also heard that the Environment Agency has declined a number of major developments, including around Oxford and Cambridge, due to lack of available water to supply those new developments, as well as lack of suitable sewerage to remove waste. Will the commission focus, and how quickly will it be able to do so, on the limitations that the poor performance of our water companies is placing on the Government’s ambitious agenda for economic and housing development?

[Baroness Hayman of Ullock (Lab)]

As the noble Earl heard, the commission has a very wide remit. I ask him to feed in anything like this that he feels it should be giving attention to. On housing and nutrient neutrality, we have ambitious housing targets, and Defra and the MHCLG are working together on how we can protect the environment and look at what needs to be done in the area of drainage. On water shortages, one of our manifesto pledges, and something we are very keen to work on, is the introduction of new reservoirs. We have not had new reservoirs for over 40 years in this country, and it is absolutely critical that we move forward on that.

Rural Communities

Earl of Devon Excerpts

Tuesday 15th October 2024 Lords Chamber

[The Earl of Devon (CB)]

My Lords, I am grateful to be permitted one minute in reply. I note my interests in rural Devon. I welcome the noble Lord, Lord Elliott of Ballinamallard, another west county farmer, to our Benches.

The reason I did not put my name down to speak today is that I was at Ditchley Park, in Oxfordshire, taking part in a task force on rural retail. I will use the minute I have to emphasise the importance of community shops in rural areas and the huge stress that they are currently under. The supply of food and basic services into rural communities is really stressed. A number of the big wholesalers are no longer supplying these communities, so people who are unable to get outside the community—they may be challenged by mobility or by the cost of transport to bigger areas—are simply unable to get the basic provisions they need, and the larger supermarkets will not deliver into these rural communities. That is all I want to emphasise in my minute, and I hope the Minister can comment on it.

Flood Prevention: Farmers

Earl of Devon Excerpts

Thursday 10th October 2024 Lords Chamber

[The Earl of Devon (CB)]

My Lords, my thanks go to the right reverend Prelate the Bishop of St Albans for calling this debate—he is an excellent servant of the rural countryside. Inspired by the noble Baroness, Lady Parminter, yesterday, I will seek to extemporise today, so I hope noble Lords will excuse me if I am not as fluid as the title of our debate. I hope not to get lost, however, as I will take noble Lords around my own experience of farming, hopefully to illustrate some of the issues that are raised by this topic.

I live at a place called Powderham. It is a medieval settlement, “the village on the marsh”, and we are therefore very used to issues of flooding. During my tenure, we have dealt with many such issues. We are based on the junction of the River Exe estuary and the River Kenn, and one of the tributaries of the Kenn is called the Slittercombe, which runs through the village of Kenton. This time last year, on a Sunday, we suffered the most dramatic rainfall ever experienced and a flood surge of some four to five feet rushed through the village of Kenton, flooding about 20 houses and the village primary school, which sits in a building that has been there for over 400 years. The primary school will never return to that building. It is currently resident in the Powderham Castle estate office and hopefully will have its own home soon on some playing fields up the hill and away from this danger.

This is a tragedy. The landscape above the village of Kenton holds the Slittercombe. That watershed is only about three miles long. Powderham farms a considerable amount of that watershed and all of the valley bottom is grassed. The steep banks alongside the valley bottom are subject to high-level stewardship and are managed under the EJ5 regime, where you have grass on the steep hills to prevent erosion and flood issues. Despite this, we had this most dramatic incident, and I do not think that anything we could have done on the farmland could have prevented it. It really is a desperate issue for the school.

The upper reaches of that valley, however, are the Haldon forest, which is of course inundated with deer—our nation is inundated with deer. The deer eat all the understory, so there is nothing on the ground in the woodlands and nothing to soak up the water that falls in the woods. In the higher ground on the valley, there is a considerable amount of farming for energy. That is maize growing, which is possibly the worst thing to be doing on a steep hillside. The land that is not growing maize tends to be growing horticultural vegetables—which, again, is a terrible thing to do on a steep hillside. But those farmers are not fortunate, like the Powderham estate, to be able to get a countryside stewardship scheme and are therefore desperate for the profits necessary, so they farm in that way.

Coming down the valley, we get to the River Kenn, which has long been a major tributary into the Exe. It is a managed landscape that has been canalised and managed for watercourses over many centuries. Of course, many of those watercourses are now failing and getting old and flooding is beginning to appear, so the fertile land within the valley is getting more and more boggy. There is an ongoing land management discussion among neighbouring farmers up the Kenn valley, seeking to find how to manage the land in a contiguous sense to better improve the outcomes. Of course, the only thing that the farmers have been able to agree on is carbon markets, because issues such as flood prevention and biodiversity are so complicated. I think that, as farmers begin to seek to work together, we really need to provide them with options that are not just the sale of carbon credits, which is the only marketplace that seems to be functioning at the moment.

As you go further down the valley, you reach the Powderham and Exminster marshes. This is an area of land that anyone who has taken the train down to Cornwall will be familiar with, because it is where the Great Western Railway first hits the water of the River Exe estuary. There is a large embankment that runs up from Powderham church to the Turf locks that is currently almost inundated. Both Network Rail and the Environment Agency are taking desperate measures to try to prevent the entirety of the Exminster marshes flooding. Among the difficulties we are seeing there is that animals—mammals—are undermining the banks and obviously, with climate change and sea level rise, those Powderham banks will not be fit for purpose. The Environment Agency, as we have already heard, does not really have the budget to do the work necessary to restore those banks and it is a terrible challenge.

The other threat that is coming is the beaver. The River Otter is obviously ground zero for the release of beavers, and if you get beavers burrowing into the Powderham banks and blocking all the drainage across the Exminster marshes, I dread to think what will happen to that very productive farmland that is the source of famously early Devon spring lamb and many different heritage productions. How we manage beavers following their release into the wild is an important issue that I hope the Minister will consider.

Then there is the broader Exe estuary. We have a project under way with Natural England, the National Trust, the Environment Agency and others to work out how to manage the whole lower Exe, which is silting up remarkably. The river is becoming almost impassable in some respects. The Exe, as I mentioned yesterday in our debate about water companies, used to be “the river of fish” in Roman times. We no longer see any fish, and that is largely due to run-off. As I say, the river is silting up due to run-off and management of the land. It is also the essential flood defence for Exeter. The city is growing rapidly and the management of the river is essential for the appropriate expansion of that city.

To follow up on a matter that the Minister and I debated yesterday, it is essential that we work out a way for the water companies to work really closely with the farming community to enable our urban centres to expand, survive and have healthy, fresh water. I pray in aid the south-west peatland project I mentioned yesterday and this ability of the water companies, as we review the water industry, to work closely with agriculture.

Water (Special Measures) Bill [HL]

Earl of Devon Excerpts

2nd reading
Wednesday 9th October 2024 Lords Chamber

[The Earl of Devon (CB)]

My Lords, it is a pleasure to follow the noble Baroness. As explained, this is one step in a multistage water industry reform aimed at fixing, once and for all, the parlous state of our rivers and fresh water supply, which is damaging the environment and our well-being, and which acts as a significant drag on our national development ambitions, particularly for housing.

This step is aimed at giving teeth to the regulators to control water company conduct, enforce regulation and punish bad behaviour. It is to be followed by a full review of water industry regulation, which is yet to come, but by which the Minister promises transformative change. Let us hope so. I ask at the outset for the noble Baroness to provide more detail on the timing and the parameters of that full review. As the noble Earl, Lord Russell, noted, it is urgently needed.

I am concerned that the punishment and shackling of water companies inherent in this Bill will not provide the solutions that are required and may only encourage a talent and capital flight from the industry. We would all benefit from a better understanding of the long-term solutions to this decades-old problem. This Bill has an unfortunate hint of short-term tarring and feathering of the water industry management for past sins. Perhaps it is His Majesty’s Government proving that they are not chicken faeces.

I note my interest as a farmer and land manager in rural Devon, with fundus interests in the River Exe estuary, which is blighted by sewage leaks. Areas of the estuary are unsafe for commercial shellfish due to human faecal contamination, and a local swimmer in Exmouth has launched a civil lawsuit against the local water company for her inability to swim off the shore. I am, as we all are, a water company customer. I also work at a law firm that has a number of major water companies as clients, albeit that I do not work for them directly. I therefore see this issue from all sides.

I am minded that water companies have long been wrestling with ageing infrastructure, considerable increases in demand and the need to be competitive in the international marketplace for capital. Moreover, they serve one regulator, Ofwat, which is keen to control consumer prices, and another, the EA, which has suffered a rollercoaster of funding and target changes over the last 20 years. While they have indeed paid excessive bonuses and dividends, it is too simple a narrative to blame corporate greed for the state of our waters.

Given that this Bill is only part of a broader water industry reform, it is obviously not a panacea, and it will not address many of the egregious issues we face. It focuses mostly on the stick, without providing carrots to encourage and support the investment and good behaviour needed. For example, take the provisions regulating executive pay, which we have heard so much about, and sentencing and liability. The pay provisions take power from shareholders and put it in the hands of Ofwat, while the liability and sentencing provisions increase dramatically the jeopardy and peril associated with working for a water company.

To echo the noble Lord, Lord Blencathra, with these provisions in place, how on earth will water companies recruit the expertise needed to implement the fundamental changes that will be required once the full review is complete? Who on earth would want to become a water company director if they will become subject to punitive sanctions and strict limits on performance-related bonuses? Surely, as the noble Lord, Lord Sikka, noted, this will result in considerable increases in basic salaries to attract the necessary talent. This will impact profitability, increase prices paid by customers and limit the funds available to invest in essential infrastructure.

I am grateful for all the briefings we have received, which accept that the industry’s principal challenge is infrastructure investment. Since privatisation in 1989, and doubtless long before that, the water industry has simply not invested at the rate required to keep up with population growth. This Government are determined to put a rocket under housing development, with their promise of 1.5 million new homes, and yet I see no provisions within this Bill to improve long-term infra- structure investment. I understand that the Environment Agency is already rejecting substantial housing developments across the country on the basis that the provision of water and sewerage cannot be guaranteed. We are all aware of the impact of the nutrient neutrality rules blocking development in sensitive catchments. Could the Minister expand upon the Government’s plans to enable the much-needed increase in capital spending to free these constraints?

As for the provisions on special administration regimes, they are clearly designed with the perilous state of Thames Water in mind. I note that no impact assessment has been published. Is there any risk that the introduction of these provisions may encourage water companies to seek the solace of insolvency sooner than they might otherwise do and thus hasten their collapse?

With respect to environmental matters, I am grateful for the briefing on water industry impacts on national parks, including in the Lake District and Lake Windermere. These provide a good case study of the water industry’s travails. It is noticeable that some of the issues identified, including the heightened nutrient run-off in the summer months when fresh water is scarce, are the product of the popularity of the lakes for visitors and not necessarily due to inadequate provision of services to the resident population. Is this, therefore, not necessarily a problem of the water company’s making but rather due to the popularity and success of the national parks in encouraging the huge influx of visitors into these very sensitive ecosystems? Noble Lords who followed our debates on agriculture and the environment will know that I am passionate about access to the countryside. But that needs to be access that is funded and supported by investment in infrastructure, so as not to damage the vulnerable ecosystems that we so cherish.

I have heard similar issues raised in discussions regarding the River Exe, in which concerned communities bemoan the terrible state of the once abundant river, named “Isca” by the Romans due to its surfeit of fish, which is no longer. These communities blame the farmers for their run-off and the water companies for their sewage leaks, without ever truly reflecting upon the mass of population who consume the food that the farmers produce and then produce the waste that the water companies remove—while insisting on ever-lower prices for both services. Ultimately, it is we who are the polluters. We need to invest properly in both our agriculture and in our water companies if we are to care for ourselves, our land and rivers.

Finally, I note the considerable environmental investments that have been undertaken by various water companies over the years, such as the south-west peatlands project, which has re-established over 1,000 hectares of peat on Dartmoor since 2020. Could the Minister explain how the Government intend to build such upon excellent pilot projects to seek nature-based solutions to the infrastructure challenges that the water industry faces?

Environment and Climate Change Committee Report: An Extraordinary Challenge: Restoring 30 per cent of our Land and Sea by 2030

Earl of Devon Excerpts

Wednesday 11th September 2024 Grand Committee

[The Earl of Devon (CB)]

My Lords, it is an honour to bat clean-up in such an esteemed debate as this. It is difficult to say something new, but I have a different angle to offer—perhaps that of a critical friend.

What an extraordinary challenge it is to restore 30% of our land and sea by 2030. Some might suggest other adjectives for it: a grandiose challenge, possibly a hubristic challenge, a distracting challenge, maybe an unnecessary challenge, and quite possibly an insurmountable challenge. I thank the noble Baroness, Lady Parminter, and the Environment and Climate Change Committee for throwing such a forensic and unforgiving light upon it. I hope the Government reflect upon this excellent report and the important contributions to this debate, and ask themselves why exactly we are doing this, can we do this and do we necessarily even want to do this.

Environmental protection and the restoration of our nature-depleted nation is vitally important, but signing up to arbitrary targets that are unsuited to the character of our densely populated island, and which our fragile rural economy simply cannot deliver, will distract from the more important tasks of sustainably feeding the nation while protecting our wider landscape from the degradations of climate change and an expanding population, and the pressures of the Government’s ambitious economic agenda.

We are nearly half way through the 10-year 30 by 30 programme and yet we cannot even agree what we are seeking to achieve and what success looks like. The committee says that we have achieved 6.5% protection as of July 2023, “at a maximum”. Defra countered in December that 8.5% counted towards 30 by 30, and it produced a map identifying an additional 26.8% as potential 30 by 30. Meanwhile, Wildlife and Countryside Link suggests we had merely 3.11% coverage in October 2023, but that number, according to a recent briefing, has since fallen to just 2.93%.

The disparity in numbers proves only one thing: we have no idea what we are doing. We have an alphabet soup of landscape “protections”—SSSIs, SACs, LNRSs, Ramsars, OECMs, HLS, CS, SFIs, NRPs—overseen by a squadron of statutory bodies, each with different targets and ambitions, but no one can agree what qualifies even as “protected” status, let alone the “restored” status required for 30 by 30. SSSIs are considered the baseline, which cover 8% of our landscape, but so few SSSIs are in favourable condition, and the monitoring is so sparse and intermittent that we cannot evaluate progress. Either we agree to a readily identifiable and measurable metric and stick to it, or we should abandon 30 by 30 altogether.

Today is Back British Farming Day—I note my interests as a Devon farmer and land manager. The next five years will be a crucial for our farming industry as we bed in the Government’s two key farming objectives: food security—which we all know is national security—and environmental land management, the transition to which should be completed by 2027 or 2028. Given that land enrolled in agri-environment schemes does not count towards 30 by 30, we simply cannot achieve these two key objectives while also “protecting” an additional 25% of our land. The maths simply do not work. We cannot create more land, and yet the Government also want to build 1.5 million homes, improve infrastructure, increase access to nature and expand onshore renewables. We cannot do it all.

Of course, had we a developed and functioning land use framework, we might have the ability to assess this and to weigh the competing demands upon our limited and vulnerable land supply—but we do not, and without it such grandiose and complex ambitions as 30 by 30 are not achievable. They should be shelved. We cannot run before we can walk, and currently we can barely crawl. Could the Minister please confirm when the Government plan to launch their land use strategy, and honour the tireless work of the noble Baroness, Lady Young of Old Scone?

Who or what is going to pay for this challenge, other than the farmers deprived of their economic opportunity? The Government are yet to confirm even the agri-environment budget for this Parliament, and, given the fiscal black hole and the strains on the public purse, I cannot see any more money becoming available. Private finance is much heralded but it is struggling to work out the relatively simple carbon and nutrient neutrality markets, let alone the complexities of biodiversity and nature restoration. Farmers’ incomes are decreasing and, to recall a hackneyed truth, they cannot go green while in the red. Can the Minister please clarify whether the Government have conducted any assessment of the cost of 30 by 30?

The most compelling evidence of the state of our protected landscapes is the Independent Review of Protected Site Management on Dartmoor, commissioned by Defra and chaired by the truly extraordinary David Fursdon, which reported in December 2023. It is current and is based on detailed evidence gathered from a broad array of stakeholders. It is well researched and clearly articulates a complex and very sorry account of the state of one of our country’s most iconic protected landscapes. I highly recommend it to all noble Lords and specifically request that the Minister read it in detail.

Much of Dartmoor has been protected via SSSI and other designations for nearly 50 years—as long as the Green Party has been in place—yet the review concludes that Dartmoor is

“not in a good state”

and that its protection needs

“to change radically and urgently”.

There is no record of the condition of the land when it was designated, so there are no means to determine whether it is now better or worse. Worse still, there are no staff available to monitor and manage the protected land today. Dartmoor was once served by 12 Natural England staff but now has only one and a half. Relations between farmers, commoners and Natural England are poor, communications are fraught and trust has all but disappeared. No one can even agree what land management prescriptions are required to restore this vital and yet fragile landscape; stocking densities are allegedly too high and yet also far too low.

The solution is long-term data collection, sensitive and skilful management and the building of genuine partnerships and trust, underpinned by committed funding over multiple years. This is not something that can be fixed by 2030 with grandstanding, ill-informed designations backed up by inadequate financial and regulatory support.

In the interests of time, I have largely confined my comments to the terrestrial elements of 30 by 30 and have not ventured out to sea. That is not because I see the marine environment as any less important; it is not. Given the ambitious programme of offshore wind revealed in our recent debate on the Crown Estate Bill, the marine environment is in as much need of protection as the land, if not more. To that end, can the Minister please confirm where Defra has got to on marine net gain? I know that a consultation concluded last year but I have heard nothing further. Just as BNG has been rolled out for all land-based development, MNG is essential as we seek to harness the renewable power of our seas and oceans.

In conclusion, this Government have quite rightly made some bold decisions on a number of fronts in their first few months in office, jettisoning policies at an impressive rate, driven by budgetary constraints and an eye to the practical and the possible. Can we hope that they might make a sensible and brave decision and shelve this undoubtedly worthy but impractical and unobtainable goal of 30 by 30?