Farming and Rural Communities

Lord Carrington Excerpts

Thursday 3rd April 2025 Lords Chamber

[Lord Carrington (CB)]

My Lords, I declare my active farming interests in Buckinghamshire and Lincolnshire. I thank the noble Lord, Lord Roborough, for bringing this debate, and all noble Lords who have contributed so far on the wide number of topics that it involves. I think we can all agree there is vast uncertainty in farming and rural policy due to government action on taxes, SFI and, most importantly, the empty public purse. This is compounded by the forthcoming land use framework, the national food strategy, the 25-year farming road map, the Planning and Infrastructure Bill, the Renters’ Rights Bill and much more.

Despite the uncertainty, farm businesses need to move on, although planning in relation to environmental measures and the horticultural sector must wait until further government announcements on the SFI later this year, as well as any replacement for the fruit and vegetable aid scheme. Productive, profitable farming needs to look at an industry without subsidies but with a level playing field when it comes to trade policy and import of agricultural products using methods and chemicals denied to our own farmers. However, the result of decreasing government support will have substantial fallout in the rural community, which the Government will need to address.

Unsubsidised farming competing internationally will not be able to afford voluntary environmental good work unless it benefits their farming system. Continuing support for the environment and biodiversity will be required, albeit in a more targeted manner. Parallel to this, it is great to see that, in the other place, Alistair Carmichael has introduced the food supply chain fairness Bill, which hopefully will increase margins for our farmers against major retailers.

As far as this debate is concerned, I wish to highlight the importance of growth and productivity in farming to the rural economy and particularly how to facilitate much-needed investment in agricultural science, innovation and technology. The APPG on Science and Technology in Agriculture, of which I am a member, has focused on the need to attract investment to support farm innovation, as the UK is a recognised powerhouse in terms of plant science and agri-research. The big challenge is to convert all these wonderful ideas into accessible, profitable commercial farming, and, for this, investment needs to be attracted from both the public and private sectors. So far, we have not been successful in launching public/private partnerships involving government, industry, science and investors. To bridge the gap between scientific research and commercialisation of these ideas, we need to study how other countries, such as Canada, Brazil and Australia, have successfully used this model of public/private partnerships to achieve this end.

The Oxford-Cambridge arc growth corridor is a welcome move by the Government to encourage growth based on our enviable scientific research. We need a series of innovation hubs with infrastructure and ecosystems which attract and support high-growth start-ups, investors and corporate partners. This works well in the United States and France. To quote a recent article in the Financial Times:

“Frequent convening of entrepreneurs, accelerators and talent is … vital. So is physical co-location of research, capital and industry”.


Our public finances may be weak, but the returns on investment in areas where we lead the world, such as agricultural-related science, far outweigh the costs.

With government encouragement, innovation hubs and a stable investment climate, we will be able to emulate the United States in targeting a 40% increase in food production by 2050, while reducing farming’s environmental footprint by 50%. With all the self-induced financial upsets, can the Minister tell us how the Government plan to bring stability into the agricultural industry, as this is the basic requirement for investment and growth?

Sustainable Farming Incentive

Lord Carrington Excerpts

Tuesday 18th March 2025 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

I completely understand that the closure so quickly and unexpectedly has caused difficulties and concern—I just want to say that. However, it is important that, looking to the 25-year farming road map that we are developing, part of the reasoning behind that is to try to give that kind of security. It is also important that, when we look at opening the SFI scheme next time, all this is taken into consideration, so that our reforms produce a more stable scheme. He is absolutely right that farmers need certainty and security, because farming is looking at long-term investments and farmers need to be able to know how to make those investments. So I take his point.

[Lord Carrington (CB)]

My Lords, I declare my farming interests are set out in the register and that I am likely to be affected by the withdrawal of SFI 24. I want to just probe a little further on the two questions that were asked by the noble Lord, Lord Cromwell, and the noble Earl, Lord Leicester. The Government claim that the promised six-week warning of closure was not given due to the potential spike in applications causing budget overspend. Surely, Defra has been monitoring this spending versus budget and advising Ministers accordingly. Please can the Minister confirm that she is satisfied with the efficacy of the Defra review process and, if so, why the Government did not take early action to avoid this serial blow to farming and the environment?

[Baroness Hayman of Ullock (Lab)]

My Lords, as I said, I am very aware that the sudden closure, when farmers were expecting more notice, has not been easy and that, for many people who were intending to put in applications, as the noble Lord said about himself, that has caused difficulties. I have friends who are in that boat, so I am very aware that difficulties were caused. I will take the concerns of the House back to the Farming Minister and explain that the unexpected pause and its impacts are felt very strongly by this House. I am happy to commit to do that, because it is important.

Rural Economy

Lord Carrington Excerpts

Thursday 19th December 2024 Lords Chamber

[Lord Carrington (CB)]

My Lords, I too thank the right reverend Prelate—or perhaps, in view of earlier remarks, I should say Primate—for tabling this timely debate. I draw attention to my farming and other rural interests as set out in the register.

As most economists and others would agree, if growth is the Government’s priority then their Budget should incentivise businesses to grow, rather than raise taxes on them. This applies throughout the economy but is particularly relevant in the case of rural business, which is dominated by farming and small family businesses. I note, however, that the Government have moved from the growth that they were targeting in opposition to the less ambitious task of raising living standards in the recently announced six milestones. The rise of over 16% in the national living wage—a 40% rise in just five years—together with the increase in employers’ national insurance to 15% will have a disproportionate impact on horticulture, tourism and the hospitality industry. This is not promoting economic growth and creating favourable conditions for investment.

On top of this, as we have heard, there are the changes to APR and BPR. I will not dwell on this, as it has been the subject of much debate already, but will repeat my remarks from a previous occasion. I pointed out that independently verified figures were required for those likely to be affected, in view of the significant differences in the estimates of the NFU, the CLA, Defra and the Treasury. At that point, a sensible government decision on tax could follow. This is particularly important in the light of the 2019 report by the Office of Tax Simplification, which said:

“It is generally understood that the main policy rationale for BPR and APR is to prevent the sale or break up of businesses or farms to finance Inheritance Tax payments following the death of the owner”.


No doubt the Minister or her Treasury colleagues will tell us what has changed since then.

In this debate, I wish to highlight the effect of these tax changes on growth and productivity in the rural economy and how they undermine much-needed investment and innovation. Family businesses of all types will be quantifying their future tax liabilities and avoiding value-adding investments that would increase their tax burden. Long-term resilience, diversification, competitiveness and environmental care will all be affected. On the farming side, this is compounded by rising input prices, the unexpected cuts in BPR and APR, delays in some farming subsidies and poor profitability. This has resulted in farmers reducing investment and not hiring staff. The Government’s claim that they have committed £5 billion to farming rings particularly hollow when inflation is taken into account and after the inheritance tax hike.

Reduced investment affects productivity through new technology, buildings and IT systems. I am a member of the APPG on Science and Technology in Agriculture, where we have focused on the need to attract investment to support farm-level innovation, as the UK is a recognised powerhouse in plant science and agriscience. Robotic equipment, autonomous machinery and the use of AI to advance crop and livestock breeding, together with vertical farming, will improve productivity, efficiency and the environment.

I note that none of these technological advances is covered by the eight areas of focus—that is, the areas that will generate the most growth—identified in the recent announcement of the Government’s industrial strategy. With the right investment climate, we might even be able to emulate the United States in trying to deliver a 40% increase in food production by 2050 and reducing farming’s environmental footprint by 50%. Can the Minister tell us how the Government’s industrial strategy and new tax regime will support this type of productivity investment?

Although noble Lords have mentioned many other important issues, the tax system is the most important factor in the growth of the rural economy and it is far from being fit for purpose. It inhibits growth, not just in farming but in horticulture, hospitality and tourism—I could go on—as well as in family businesses, from builders to butchers and garden centres to timber merchants. Contrast this with the support being given to so-called creative industries producing films, TV and video games. Tax credits for this industry are calculated to cost the Treasury £2 billion a year, compared to the new cap on BPR and APR which will generate the Treasury some £520 million a year. The Government have chosen fun over food security and family businesses.

Farming Families

Lord Carrington Excerpts

Thursday 21st November 2024 Lords Chamber

[Lord Carrington (CB)]

My Lords, I also thank the noble Baroness, Lady Northover, for bringing this debate forward and for her extremely powerful speech. I declare my interests in farming as set out in the register.

Like others, I attended the farming demonstration in Whitehall on Tuesday, which only confirmed the desperation in the farming and small-business community in relation to the Budget measures affecting them, particularly the changes to APR and BPR. I would like to concentrate on the likely effect of these measures on growth and investment in the industry and, by association, the continuity of family farms.

When a previous Government first introduced these inheritance tax reliefs, it was on the basis that tax charges, when there was a change of ownership of a family business, were viewed as having a

“damaging effect on risk-taking and enterprise within a particularly important sector of the economy”.

This rationale remains, and is why agricultural relief has existed since the late 19th century, when estate duty was introduced. Using IHT reliefs to pass on a family farm is not about avoiding tax; it is about facilitating the long-term stewardship of the land and keeping the family business going.

Unfortunately, at present there is considerable dispute on the number and nature of farming businesses likely to be affected, so I urge the Minister to ensure that the Treasury, Defra, the NFU and the CLA establish an agreed factual base as soon as possible, as well as then having the much-needed meeting between the Chancellor and the NFU.

Remember Mark Twain’s dictum:

“There are three kinds of lies: lies, damned lies, and statistics”.


Perhaps this is case here. Current government figures for APR claims appear to be based on only one year—2020-21—and no BPR figures have been given. Clearly, this is insufficient information. The £1 million combined APR/BPR limit per person will protect only the very smallest of farms. These tend to be smallholdings operated as a sideline for people with other sources of income; they are not the businesses that provide most of the nation’s food.

The payment of the proposed IHT in an industry of low and volatile returns, which is asset rich and cash poor, will result in the sale of land, which will affect the viability of farms and inevitably have huge consequences for further investment in both working capital and fixed capital, which could also increase any future IHT liability. Have the Government assessed in any way the likely impact on growth and productivity in farming as well as the consequential effect on related businesses and communities?