Family Farming in Devon

Geoffrey Cox Excerpts

Tuesday 3rd December 2024 Westminster Hall

[Sir Geoffrey Cox (Torridge and Tavistock) (Con)]

I beg to move,

That this House has considered family farming in Devon.

It is a great pleasure to have been able to secure a debate under your presidency, Sir Mark. I am extremely grateful to the Minister for attending.

With exquisite timing, the Conservative party has managed to list an Opposition day motion in the main Chamber tomorrow on exactly the same subject as this debate. Although I welcome that, I also welcome the opportunity of having the Minister much more up close and personal than is normally possible in the main Chamber for what I hope will be a relatively civilised debate—we do not always manage that in the main Chamber, perhaps, although one would hope we would. We are here to discuss not the general questions affecting the entire country in connection with farming, but questions most specific to Devon, although they share common themes and subjects.

I forget whether I have yet been able to induce the Minister to visit Devon, but we hope that he will do so in the new year because we are likely to have a Dartmoor forum, which he and I have already spoken about, in connection with an important development for the management of Dartmoor—the Fursdon review and its implementation. I will speak of those in due course.

To set the scene, in 2022 the economic output of farming in Devon was valued at £1.369 billion. More than 20,000 people are employed in farming in Devon on more than 1.2 million acres of farmland. By far the largest proportion of those acres are held and worked by modest-sized family farms of between two and 400 acres. No farming families in Devon continue in farming to grow rich; Devon’s farms are principally grazing livestock and dairy farms. They do it because it is a way of life, and because of the pride that they take in producing some of the finest food and produce on the planet.

Those families also do it because many, even most, of them have farmed in that place and within those communities for generations. The names of their forebears, engraved on the tombstones of their churches and chapels, bear witness to the continuity of which they are the stewards and custodians. It is that value, which is precious to the entire rural fabric of Devonshire, that I will speak of most acutely and strongly to the Minister.

There is a preciousness about farms, many of which have herds that may have been looked after and developed over dozens of years, sometimes even a century. There is all that cultivation and nurture and all those traditions that those farming families represent. Often a farm will support not simply one family, but several; I know of many surrounding my home. I refer the House to my entry in the Register of Members’ Financial Interests—although I do not farm, I have farmland in Devon, and, depending on the vagaries of the sustainable farming incentive, I may well be a beneficiary of those schemes in a modest way. I tell that to the House and the Minister in candour before I start substantively.

I am familiar with my neighbours, my friends—those who farm near me, around me and throughout the whole of Torridge and Tavistock, which I have the honour to represent. As I have said, those farms sometimes sustain not just one family but several: there may be two or three brothers, with their families. Children on those farms may be hoping in due course to have the opportunity of farming themselves.

These people do not farm to grow rich; they farm for the reasons that I have given. But they also farm because they love that way of life—they have grown used to it, and know that they are following in the footsteps of their forebears. They farm because they are proud of the produce and the animals that they rear.

That is why there is a special value in farming families and family farms in Devon. True it is that the produce is the most important thing, of which they are most proud, but they also contribute to the fabric. The Minister would love to come to the rural shows—the Clovelly show, the Okehampton show, the Holsworthy show and all the shows that take place throughout the summer months in Devon. They are extraordinary events at which people—not just the farmers, but the ancillary trades that depend on them—get together. In a convivial setting they discuss their industry and trade and create the fabric of rural life, which is so precious.

Farm incomes have been falling. That is not a secret—the Minister will be well aware of the fact. From time to time, fortunately, farmgate prices have remained relatively buoyant, but average farm business income for the year 2023-24, to the end of February 2024, was lower for all farm types except specialist pig farms and specialist poultry farms. Almost all the farms in Devon, bar those relatively rare exceptions, saw falling average business income.

On dairy farms, following the two better years, when farmgate prices were relatively buoyant, average farm business income was 68% lower, with a fall in the farmgate price of milk being the primary driver. On lowland grazing livestock farms—beef, sheep—average farm business income fell by nearly a quarter, to £17,300. For grazing livestock farms in less favoured areas, higher fixed costs were only partially offset by an increase in output of £23,500, which was 12% lower.

From those falling incomes must be deducted the living of those who work the land. Those incomes do not take into account the unpaid labour of those who own or tenant those farms. Families who live on them—sometimes several families—must from that £17,300 or £23,500 take their own living. We can see that most people would not regard the figures we are speaking about, falling as they have been in the last year or more, as easy to live on, particularly for more than one person, for multiple families.

These farming families, of course, have to live with not only the hardness of their way of life but the unpredictability of the weather. They also, sadly, live with a different kind of unpredictability and a different kind of weather: the political weather. I would not be exaggerating if I said that these days those farmers in my constituency, and I suspect it is not much different in the rest of the county, probably regard the political weather as even more random and unpredictable than the actual weather itself.

I mean no party political point, because I accept entirely that the weather under successive Governments has always been relatively unpredictable, but recently the weather has achieved a combination that could be described, without too much poetic hyperbole, as a perfect storm. We have had the Budget’s accelerated cuts to the basic farm payment, the delinked payments. It is true that the progressive reduction to the basic payment was introduced in 2021. It is perfectly true that, across all farm types, the average net payment received in the reference year 2023-24 was approximately £18,300—but that was 21% lower than the year 2022-23. Nevertheless, that average of £18,300 still accounted on average for 40% of farm business income.

In the meantime, the environmental land management scheme, which includes the sustainable farming incentive, is not replacing the income lost to farms. Considerable progress was made this year to improve those schemes under the last Government, but, while across all farm types net income from agri-environment activities increased by an average of 14% to £10,600 on average, which is welcome, that is by no means sufficient to replace the 40% of farm business income that the basic farm payment still comprised in the year 2023-24.

As a result of this Budget, family farms will now experience a further 76% cut this year in the delinked or basic payment, with a cap of £7,200. For many families, that will represent a dramatic and unexpected reduction, for which farm businesses have been able to plan, and which will require readjustment and inevitable retrenchment of investment and employment. The payments will, of course —as they were always intended to—reduce progressively over the next three years, but farmers were entitled to believe that they would be reduced proportionately. Instead, the Chancellor of the Exchequer has reduced them by 76% against the reference year, in a manner wholly unexpected to the industry.

Cumulatively, I will describe the additional problems that that has meant. There has been an inability to plan and an inability to adjust one’s cash flow. Halfway through potential investments on their farm, farmers find that the income they expected to have is not the income they will have. That is unhelpful. At the same time, the countryside stewardship higher tier scheme has been postponed, it is said possibly until mid-2025—I would invite the Minister to give us his view on when that scheme will be available.

The new, expanded sustainable farming incentive for 2024 does not appear to be readily available to all farmers, particularly to upland farmers, who have had so far very little access to that scheme. The countryside stewardship higher tier and the SFI 24, with the activities that are now coming onstream—or that will do, because I understand that some of the endorsed activities are still not ready—offered some prospect of mitigating the dramatic losses that the Budget has imposed, but the postponement has been a serious blow. Farmers are marooned in legacy schemes that are being extended in mirror agreements and cannot conceivably make up or mitigate the loss of direct payments that they are suffering because of the unexpected reductions.

The Ministry has also suddenly halted capital grants. The sudden closure of the capital grant applications has been a huge shock. Farmers are being asked to adopt measures to improve the environment, but have been left without access to the very grant schemes that would enable them to do so and help with their cash flow and their productivity. With applications timed specifically to fit in with the farming year and their enterprise activities, and no confirmation that all applications already in the system will progress, further uncertainty is caused to these businesses. Will the Minister comment on that?

[The Minister for Food Security and Rural Affairs (Daniel Zeichner)]

indicated dissent.

[Sir Geoffrey Cox]

I saw him, in his characteristically civil and polite way, gently shake his head. Nothing would more alight the hopes of those I represent than if that gentle shake of the head meant something—meant that we were wrong to say that the capital grants had been ceased and meant that all those writing to me and colleagues, asking what to do now, have been living in an unnecessary nightmare.

I implore the Minister, if that gentle shake of the head meant anything, to let us hear it now. Let us hear him boldly strike out and say, “The capital grants will be resumed. They will not be postponed or delayed to 2025. Some relief is available to those who desperately need it.” Because they—the farming families of whom I speak—will also be affected by the increases in employer national insurance contributions and the minimum wage, and by the various measures, some quite small, that the Budget took in connection with those who pursue family farming.

In the meantime, like a slow and steady drumbeat gathering force, behind the ever more implausible rhetoric of support, they see and hear the concrete commitments of this Government. They witness the Government in action, not in words. They see how the Prime Minister at COP29 committed himself to a climate change target—a perfectly reasonable thing, some may argue, but the Climate Change Committee has told him that in committing to that target he will need to reduce the consumption of meat and dairy products by 20% over the coming five years.

These are the signs of the political weather, and so are the small measures—the small signs that, beyond the talk, indicate the revealed preferences and priorities of a Government. It is not about what the Prime Minister says when he stands at the podium and speaks to the National Farmers Union; we have already learned that we cannot trust that. What we realise, and what those listening today have begun to realise, is that it is in the small as well as the large measures that the Government are revealing their visceral and real preferences and priorities.

The small things include the reclassification of double-cab pick-up trucks. That might even have been missed in the Budget. Squirrelled away in the small print was a lancet aimed straight at hundreds of farming families in Devon, many of whom have a double-cab pick-up truck. Now, that is no longer deductible: it is not to be treated as a business expense simply because it has a back seat, when for years it has been so treated by the Revenue. The small measures reveal the real preferences and priorities of a Government. It is not the words, the rhetoric or the talk; it is what they do by which they are judged.

Of course, all those measures are outweighed by far by the subject that tomorrow’s debate will no doubt cover: agricultural and business property relief. The Government’s figures on the policy have now been widely discredited. The £1 million cap is not only on agricultural property relief but on business property relief. Both reliefs are used when a farm is passed to the next generation. As agricultural land prices have increased, a 200-acre farm, let alone a 400-acre farm, will almost certainly have a capital value, on the land alone, of more than £2 million. That same land often sustains multiple families—the brothers, the sisters and the cousins, all of whom farm that land—and from that exiguous amount of £17,300, or £23,500 in an upland area, they all have to take their living, provide for their children, pay for their energy and so on.

These farms are not wealthy; they are, as is so often said, asset-rich but income-poor. The Government say that the relief is doubled for a couple. However, bear in mind that a farm will have not just the land but other business assets, equipment and livestock, all of which require the business property relief to be deployed. And the business property relief, combined with the agricultural property relief, is now capped at £1 million.

As I said, the Government say the relief is doubled for a couple. But what about the 46% of farms that are owned by a single owner? If, for example, someone’s spouse has already died, they cannot inherit the allowance from their deceased husband or wife. The 46% of single owners of farms will receive no double relief—only the £1 million.

I say to the Minister that what is particularly wrong about this situation is—

[Sir Mark Hendrick (in the Chair)]

Order. I understand that there is a Division in the House, so the sitting is suspended for 15 minutes. We will add that time on at the end—do not worry.

--- Later in debate ---

[Sir Mark Hendrick (in the Chair)]

Order. As everybody has returned, we can restart a little bit earlier than we had planned. I call Sir Geoffrey Cox.

[Sir Geoffrey Cox]

I was dealing with the impact the changes agricultural property and business property relief will have on farming families, although that will be debated in greater and finer detail tomorrow.

Just this morning I was written to by a farmer in my constituency. She lives in Sheepwash in Torridge in Devon. I hope she will forgive me for mentioning her age, because she is 86. She has a dairy farm, milking 250 cows. As she says herself, the cows may well be worth £400,000, the young stock another £250,000, machinery perhaps £250,000 and the farm buildings—into which investment, toil and effort have been poured by those who have worked that farm for generations—worth perhaps £1 million in themselves.

The farm may have a dairy parlour. It may be automated. It may well be able to milk 250 cows, or these days even more. One can see the cows going round on the carousel—I am sure the Minister has seen them, but I can show him these carousels in my constituency. The cows come in, they get on to the carousel, they go round, they come off the other side and they are milked. Those automated parlours are worth hundreds of thousands of pounds. All that would need to be offset against business property relief, which has now been capped not only for the value of those buildings and those business assets, but for the land, which is 400 acres.

To sell 20% of the herd to pay inheritance tax will, as my constituent suggests, not only severely deplete the profitability of a business that already operates on the wafer-thin margins of which we have spoken today, but cripple herds that have sometimes had lavished upon them 100 years of husbandry. They are closed herds, some of them; animals prized for their pedigrees and their quality, and prize-winning at the local shows of which I have already spoken and to which I have drawn the Minister’s attention.

But what she says next is the most compelling: she says, “At my age, I have very little time to plan. Even if I could give the farm away and survive the seven years that were necessary, I can’t, because I still need to retain a modest income from the business because my pension provision itself is modest. Taking out life insurance at the age of 86? Well, that is a non-starter. These changes and the implications for my family greatly worry me.” That is an understatement. Older farmers’ health and wellbeing are seriously at risk as we come to see ourselves as an impediment to successfully passing on the farm to the future generation, preserved for their generation to cultivate, to nurture, and to develop.

It is not so much the cap—although the cap is bad enough—as the complete failure of the Government to assess the impact on the basis of accurate figures. The Treasury figures are now widely discredited and different, as we know, from the Minister’s own Department for Environment, Food and Rural Affairs. It is a complete failure to work out the impact it will have not only on businesses, but on people; a failure to consult them and to understand how these measures will impact the rural communities I have the precious honour of representing and speaking for this afternoon.

There is no time for those people to plan, and that makes them feel—up and down the length of this country and throughout the towns and villages of Devon—that they may be the impediment to the next generation. The same holds for the dramatic and unexpected cuts in the delinked payments: there was no income assessment, no consultation—it was all sudden. It is those small details, as is so often the case, that reveal the real preferences and priorities of the Government.

I want to talk about bovine tuberculosis. When I was first elected, that disease ran riot throughout the countryside of Devon. West Devon, Torridge, and parts of north Devon were some of the most densely infected areas in the country. For years, we banged our head on the brick wall of policy made by a previous Labour Government to get people to understand that the wildlife reservoir must be controlled. It was one instrument among the many that were unquestionably needed, including biosecurity, the development of vaccination and all those instruments, but we could not arbitrarily exclude the instrument of controlling the wildlife.

In the hills and fields of Devonshire I have watched badgers run between the legs of the cattle. One tiny, infinitesimal measurement of badger urine can create the bovine TB disease in cattle. It is impossible to prevent the infected wildlife reservoir in badgers, and for that matter in deer, from infecting the cattle, and it is widely understood by the veterinary community in Devonshire that wildlife is a vector in the disease. I pay tribute to my Liberal Democrat colleagues in the coalition Government, because it took moral and political courage finally in 2010 to agree, alongside the Conservatives, to introduce that single instrument that the Labour Government had declined to introduce for all those years.

I remember bringing the right hon. Member for Leeds South (Hilary Benn) down to the village of Clawton on the borders of Cornwall and sitting him alongside 15 or 20 farmers to hear their experiences. Although he was, like this Minister, civil, urbane, courteous, mild, kind and polite as ever, he was implacable in his refusal to adopt the rational proposal being made to him by those farmers that targeted control of wildlife was necessary, and that in the end all wildlife must be controlled.

In Torridge and Tavistock that control has led to a 55% reduction in herd breakdowns. The chief vet says that it has been a causative factor in the downward trajectory of the disease. I applaud the Minister for announcing the refreshment of the bovine eradication strategy, and for announcing that there will be no immediate cessation of that important instrument. It is an instrument that must be used judiciously, and only as part of a wider group of instruments designed to bear down on the disease, but it cannot be excluded.

In the first five years of my election to this place I sat on the Environment, Food and Rural Affairs Committee that wrote the report that set the scene for the policy that the coalition Government introduced. My worry is that the refresh will prejudge the outcome. It has been already announced that the instrument will cease to be used at the end of this Parliament. That sounds like prejudging; it does not sound like evidence-led political decision making. It sounds like an ideological decision, not an evidenced one, when even the chief vet accepts that the instrument has been a contributory factor in the downward trajectory of the disease.

In my constituency, and I suspect in those of others in the Chamber, the instrument has unquestionably led to a dramatic fall in the incidence of the disease—a 55% reduction. I recall vividly that I could walk from one end of my constituency to the other on infected farms under restrictions. It is now quite impossible to do that, which is significant progress. There is a human impact of bovine TB. We do not need pyres 200 feet tall—as there were in Devon with foot and mouth disease—

[Sir Mark Hendrick (in the Chair)]

Order. I remind the right hon. and learned Member that there are others who may wish to speak and, unless he winds up his remarks fairly soon, they are not going to have much time.

[Sir Geoffrey Cox]

I will indeed, Sir Mark. We do not need pyres 200 feet tall to see the invisible toll of carnage that cattle slaughter after bovine TB entails. I urge the Minister to remain open minded.

Finally, I come to the Fursdon review. I know the Minister understands that none of my remarks are intended to be personal—on the contrary; he is a reasonable interlocutor with whom it is always a pleasure to deal, and who has always consulted on matters of constituency and other regional importance. The Fursdon review is one such matter. I urge him to implement its recommendations in full. The review was superbly conducted and has been an extraordinarily valuable exercise in how light can be brought to difficult situations.

I applaud the appointment of the chairman of the Dartmoor Land Use Management Group and thank the Minister for that—that is good. I invite him to come to Tavistock for the next Dartmoor forum, where we have several hundred attending: the NFU, Devon Wildlife Trust and all the environmental groups will come. It is an important moment when the actors, the players and those involved on Dartmoor can see how this Government are as engaged as the last Government were in finding solutions to the uplands problem on the moor.

I conclude with this plea: if it was not an intentional weather creation, leading farmers up and down the country and throughout Devon to believe that this Government have no interest, no regard and no care and are in fact callous and indifferent to their welfare and fate, it is up to the Minister today and henceforth to change that weather by sending the correct signals. I have to say he will have a hard job and an uphill battle to persuade them after the inheritance tax relief and the other measures of which I have spoken, but if anybody in this Government can do it, it is the Minister. I hope he will, and I wish him success in doing so.

[Sir Mark Hendrick (in the Chair)]

I indicate that, because of the limitations of this debate, each Back Bencher should aim to speak for around five minutes, if possible.

--- Later in debate ---

[Daniel Zeichner]

We can, because we simply look at the number of claims that have been made in the last few years. That is how we arrive at that conclusion.

[Sir Geoffrey Cox]

The figures that the Treasury published simply deal with the use of agricultural property relief. What they do not show is how many farms had already used their business property relief before needing to rely on agricultural property relief. They do not take into account the fact that it is not just APR, but BPR, being capped.

[Daniel Zeichner]

I refer the right hon. and learned Gentleman to the letter that the Chancellor sent to the Chair of the Treasury Committee, which goes into the issue in some detail. It says:

“Currently, of the population of affected estates that claim both APR and BPR, almost a quarter of claims include a claim for”

shares on the alternative investment market. That begins to show the complexity and that the situation is not always as it seems.

I will move on to the double-cab pick-up tax. As I suspect the right hon. and learned Gentleman knows, that was based on a legal judgment by the courts. We respect that judgment, as I am sure he would wish us to. We are also saying, generously, that it will not affect the capital allowances treatment of anyone who already owns a double-cab pick-up. Anyone already leasing a double-cab pick-up from their employer as a benefit in kind will have until April 2029, or their lease expires, before these changes affect them.

I am conscious of the time, so I will just touch on bovine tuberculosis—a hugely important issue that of course has caused huge cost and huge suffering for many farmers. As the right hon. and learned Gentleman acknowledged, the Government have started work on a new bovine TB eradication strategy. The key part of that is pushing much more swiftly on developing a cattle vaccine, which I genuinely think will be the ultimate answer to this very difficult problem, and it very much builds on the evidence and conclusions of Sir Charles Godfray’s 2018 independent review. Alongside that, we will do the first badger population survey in more than a decade, develop a new national wildlife surveillance programme and establish a new badger vaccinator field force. I genuinely think that we can work together on eliminating the scourge of bovine TB.

I conclude by thanking all hon. Members for what has been an informative debate. It is always good to talk about what is happening in Devon. Let me reassure the House that I am absolutely committed, as are the Government, to a strong future for family farms and food producers across the country. I am sure we will be continuing the debate.

--- Later in debate ---

[Sir Geoffrey Cox]

Thank you, Sir Mark; I can be quite concise. May I, through you, thank the Minister for, as ever, the polite, civil and gentle way in which he treats the inevitable criticism coming from the Opposition side of the Chamber? Some of it is justified, and no doubt some, he thinks, is unjustified. I have to say I found his responses on the inheritance tax changes pretty thin, but no doubt we will hear tomorrow from the Treasury Ministers as they stand up for themselves on a decision on which, from his silence, we can make a deduction.

The hon. Member for South Devon (Caroline Voaden) asked the very pertinent question whether DEFRA was consulted, and the answer that came back was not yes; it was, “We are one Government.” If I have ever heard a piece of prevarication elegantly executed in this Chamber, that was it. That is the problem: we all sense that this was driven by the Treasury, tin-eared—completely deaf to the real needs of the farming world and community. I suspect that even after the relatively short time the Minister has been in office—he did serve in opposition, and I know he was an attentive, listening figure in that time—even he must understand that this has caused a restiveness throughout the community, and not just a restiveness, but a despair. The 86-year-old lady, living in Sheepwash, who now sees herself as an impediment to the passage of her ancient farm to her own children and grandchildren is a human example of the impact, and she is not going to be comforted by the answer, “Well, only 27% of farms will be affected.” She says, “What about me?”

Can we afford to lose, even on the Treasury figures, 2,500 farms over this Parliament? Even on the minuscule figure that the Treasury takes into account, it is still 2,500 farms the length and breadth of England that will be lost—500 a year. I say we cannot afford it. We will debate this tomorrow. I know that my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) will debate it forcefully, and the Minister will no doubt be relieved to be sitting by the side of Treasury Ministers, who are going to have to take the rap for the mess that they have made.

I would like to work with the Minister on bovine TB. The disease affects my constituency, and the constituencies of all of us in Devonshire, profoundly. We do not want to go back in history. I recall that history too well. I recall the foot and mouth pyres, but also, as I have said, the silent and invisible carnage with the slaughter of cattle as a result of bovine TB, and the restrictions on dairy farms, on livestock grazing farms. Those are cruel—cruel not only to the animals but to the people. We need together to find a solution. I have been told that vaccination is just a few years away every time I have had a debate of this type. It would be interesting to know how far away the Minister thinks the vaccination is, and has he solved the problems of exporting the milk and the produce, once it has been vaccinated, to our markets abroad? I ask because of course it is difficult to determine whether something detected is the vaccine or the disease, and it is not clear that our markets would be available. Those problems have to be resolved by him, and I am very happy to work with him to do that.

Finally, on the question of the landscape management unit in the Fursdon review, may I urge the Minister to recall that what is critical—

[Sir Mark Hendrick (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).