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?

Land Use Framework

Lord Carrington Excerpts

Tuesday 12th March 2024 Lords Chamber

[Lord Douglas-Miller (Con)]

I thank the noble Baroness for her question. I caught most of it, but perhaps I might write to her in due course with the answer once I have caught the whole thing.

[Lord Carrington (CB)]

My Lords, I declare my interests as set out in the register. The primary concern in any such framework needs to be its flexibility to react to circumstances. This means that, at best, it can only be guidance, as the Minister has affirmed. More specifically, can he confirm that valuation issues will be carefully studied, as confiscation of value due to arbitrary designation will be a major concern for those who work the land?

[Lord Douglas-Miller (Con)]

The noble Lord is absolutely correct that this framework is not designed to be prescriptive in any way. It will take into consideration all aspects of land ownership, land management and land use. I can assure him that making sure that there is no value destruction for those at the recipient end will be at the top of my radar.

Animal Welfare (Livestock Exports) Bill

Lord Carrington Excerpts

2nd reading
Wednesday 21st February 2024 Lords Chamber

[Lord Carrington (CB)]

My Lords, I too welcome this Bill and its Second Reading. It has many admirable aims, which I fully support. I declare my interest as a farmer, including sheep farming, as set out in the register. I am also a member of the NFU, which has circulated a focused briefing on the issues, with which I largely concur. Like others, I am also delighted that this is the first Bill to be led by the Minister.

I fully support the overall objective of the Bill, and of other welfare legislation granted Royal Assent in recent years. This makes our country a world leader in the treatment of animals and is something to be rightly proud of. While the overall purpose of the Bill is very good, I have concerns about its unintended side-effects, which will directly hit farmers. They are already facing the perfect storm of reduced farm payments, inflation affecting inputs, and adapting to the most monumental changes brought about by farming policy since the Agriculture Act 1947. Their export markets and the flexibility of their businesses going forward will also be adversely affected. That needs to be noted.

The trade of exporting store sheep to the continent for fattening and slaughter, while never making up the majority of UK sheep exports, was still a valuable avenue for a number of farmers, particularly in the south-east of the country, accounting at its peak for around 10% of sheep exports.

One of the main points given in support of the Bill is that since December 2020 there have been no live exports from the UK. However, this is not because farmers have simply stopped doing it, but because of the lack of proper border control posts, as mentioned by the noble Baroness, Lady Young, to administer all the post-Brexit checks. Reopening the store market for live export is not welcomed by the Government—nor by me—but export for breeding is encouraged. Therefore, will the Minister say what additional investment the Government are putting in to make certain that the shortage of border control posts with live animal facilities is addressed?

Surely having sufficient border control points in place and encouraging the export of animals bred and transported to a high welfare level will address the likely pernicious side-effect of this legislation if the border control posts are not in place. If they are not, there will be an increase in animals being exported to our erstwhile markets of France, Belgium and the Netherlands from east European and Australasian countries, which have a much weaker animal welfare protection system in place. Our priority should be overall animal welfare, which can be achieved by better investment in border control facilities, transport infrastructure and the exploration of welfare assurance schemes, as recommended by the NFU.

My final point is that a key reason why some farmers have in the past sent non-breeding exports across the channel is that those 31 miles are closer than the nearest abattoir in the UK, due to the number of abattoir closures, which has already been highlighted by the noble Baronesses, Lady Fookes and Lady Hodgson, and my noble friend Lord Trees. It is estimated that number has reduced by one-third since 2014, including McIntyre Meats last week in the Prime Minister’s constituency. The unfortunate consequence is that some farmers undertake 200-mile journeys to abattoirs in the UK. While the Government’s smaller abattoir fund with £4 million available is a step in the right direction, it is unfortunately not enough, as was eloquently put by the honourable Member for Westmorland and Lonsdale when he said that it would

“not even touch the sides”—[Official Report, Commons, 18/12/23; col. 1187.]

of his constituency, let alone the country as a whole.

With each closure of an abattoir, farmers must travel further afield, adding to journey times, stress and the cost of production, which is making some livestock businesses unviable. Also, most importantly, it has a negative impact on animal welfare, as the affected animals have to undergo these long journeys. That completely negates what the Government are trying to achieve, particularly, as mentioned in the Government’s manifesto commitment, to end excessively long journeys for fattening and slaughter by enabling shorter and less stressful journeys. I will be interested to hear from the Minister what additional support the Government propose to prevent the closure of abattoirs and to keep the sector viable. In particular, are the Government considering creating a working group to look at the 5% rule which governs the number of animals slaughtered without a vet being present, as recommended by the Environment, Food and Rural Affairs Committee in 2021? Are the Government continuing support for the mobile abattoir pilot?

Biosecurity and Infectious Diseases

Lord Carrington Excerpts

Thursday 18th January 2024 Lords Chamber

[Lord Carrington (CB)]

My Lords, I welcome this important and topical debate, and I thank the noble Lord, Lord Trees, for initiating it. I also believe he may have had something to do with the headline in today’s Financial Times, “Dover Port warns of food safety risk”. The article says that health inspectors at Dover have warned that a proposed 70 per cent cut in government funding poses a risk to food safety and animal health. This should be a matter of great concern to the noble Lords, Lord Krebs and Lord Browne.

I declare my own interests, as set out in the register, in farming and woodland. The debate covers a wide variety of issues, but I would like to confine my remarks to the central importance of healthy trees and woodland when we address biosecurity and climate change.

In 2020-21, around 13,500 hectares of new tree planting was undertaken in Great Britain, of which England and Wales accounted for only 2,500 hectares. Driven by achieving net-zero carbon by 2050 in the 2019 climate change legislation, the English tree strategy of 2021 identified, as we have heard, a target of 30,000 hectares of new planting a year by 2025—next year. We therefore have a huge mountain to climb in terms of planting trees, made even more complicated by diseases such as ash dieback and, of course, climate change. That leaves aside the fact that appropriately fertile land, and alternative uses of that land driven by profitability calculations, taxation considerations and much else, can be a major disincentive. We still await the Government’s promised land use framework, which will attempt to reconcile the competing demands of food production, biodiversity, carbon sequestration, forestry, flood management and much more. Perhaps the Minister could use his influence to accelerate the promised framework, in which climate change factors are major ones.

Today we are focusing on biosecurity, diseases and climate change, which, together with increased tree-planting targets to assist our carbon strategy, mean that every effort must be made to improve and increase our source of trees through careful selection, based on genetic diversification, in order to breed more resistance to diseases and better-quality hardwood. This can be achieved by genotyping basic materials to ensure high and representative genetic diversity.

Simultaneously, we need to increase the availability of the improved planting material of native and non-native species. We need to look at importing, both to increase conventional seed supply and to identify planting stock from warmer climates. This needs to be carefully controlled; we are lucky in this country to have scientific research organisations such as the Future Trees Trust doing precisely this. With improved planting stock, there are other major advantages such as faster establishment, reduced mortality and a reduced need for herbicides, resulting in improved timber quality and, of course, earlier carbon capture. Much of this improvement in planting stock mirrors what has been done in the farming industry in identifying new seed varieties to increase yields and provide greater resistance to pests and diseases. The passing of the Genetic Technology (Precision Breeding) Act last year has given this research a major boost.

A highly important aspect of the likely requirement to import seed and plants from overseas is to enhance and promote the plant certification scheme in nurseries to ensure traceability and engender confidence in our imports. This was a major issue raised by the House of Lords Horticultural Committee in its recent report. I would be interested to hear from the Minister, if he has time, of any further government plan to support, widen and strengthen that scheme, including making it compulsory.

Farming: Net Zero

Lord Carrington Excerpts

Wednesday 20th September 2023 Lords Chamber

Asked by

[Lord Carrington]

To ask His Majesty’s Government what progress they have made in assisting British farmers to meet net zero challenges.

[Lord Carrington (CB)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my farming interests as set out in the register.

[The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)]

My Lords, I declare my farming interests as set out in the register. Farmers are central to delivering the Government’s environmental and climate targets, alongside their core role as food producers. The net-zero growth plan, government food strategy and environmental improvement plan set out a range of specific improvements to support farmers on their journey to net zero. Environmental land management is the foundation of our new approach. Our schemes will pay for sustainable farming practices, which are an important step towards achieving our net-zero goals.

[Lord Carrington (CB)]

My Lords, I thank the Minister for his response and I appreciate the progress being made, but years on from the passing of the Agriculture Act and the Environment Act, farm owners and landowners are constrained by the absence of many of the basic details on the new schemes. Despite many questions and consultations, we still have no decisions on the tax implications for income tax, VAT and inheritance tax. Current uncertainty over the taxation impacts of ELMS, biodiversity net gain and carbon farming in general is a major obstacle for farmers to take up these schemes. This is exacerbated by the need to commit to 30 years or more for BNG. In successful farming, timeliness is godliness. Will the Minister introduce this mantra to Defra and its dealings with the Treasury, and announce the policy?

[Lord Benyon (Con)]

I thank the noble Lord. We are doing a lot with farmers to encourage them to farm sustainably, in a way that locks up carbon and rewards them for doing so. I refer him to Nature Markets: A Framework for Scaling Up Private Investment in Nature Recovery and Sustainable Farming, which shows land managers precisely how they can access high-integrity carbon and biodiversity credits markets, which will provide income for them and do what we want; and to our environmental land management schemes, which will lock up carbon. The noble Lord asked a specific question on tax. We have resolved some of the issues and have ongoing discussions with the Treasury. It is vital that we incentivise farmers in every way to help them hit net zero and help us as a society.

Woodland Cover Protection and Grey Squirrel Control

Lord Carrington Excerpts

Thursday 25th May 2023 Grand Committee

[Lord Carrington (CB)]

My Lords, I declare my farming interests as set out in the register. I am extremely grateful to the noble Lord, Lord Redesdale, for initiating this timely debate.

First, I thank the Government for introducing and improving a variety of grant schemes, including funding important maintenance for new woodland over 10 years. However, this funding is constrained by the lack of adequate resources for the processing and approval of planting applications, which delays the rollout ofusb woodland creation. There has been an unfortunate side effect on tree nurseries explicitly encouraged by further government support following the Government’s response to the EFRA 2022 report on tree planting. Nurseries have been restricted in the sale of their products by the slow pace of government approvals of new woodland creation. I am most interested to hear the Minister’s response to the question of the availability of manpower resources in his ministry to process these applications.

My second major concern is the effect of the sale of carbon credits on the type of new woodland planted and its location. In East Anglia, considerable prime farmland has been bought up or rented at substantial premiums by investors outside the agriculture and forestry industries for the sole purpose of enjoying carbon credits. The favoured tree is the fast-growing paulownia, or foxglove tree, normally grown in our gardens for either its flower or huge leaves. There is no traditional commercial market for this wood in the UK and it is unsuitable for biomass. Paulownia scarcely meets the recommendation of the Woodland Trust to plant native trees and shrubs. It also fails to accord with the Government’s environmental improvement plan and efforts to reverse the decline of species and wildlife habitats. From the point of view of the Government and the Forestry Commission meeting targets on woodland expansion, this is an easy win, but in establishing appropriate woodland species on suitable land, it is a disaster. Could the Minister explain why this has been allowed to happen, and what can be done to stop the abuse of a sensible long-term government policy to increase woodland using appropriate species on appropriate land?

Thirdly, I come to the establishment of new woodland and the control of vermin. Others have dealt with the squirrel problem and, to a certain extent, measures to control deer, but in my own woodland I am finding it increasingly difficult to find people to shoot the deer due to the dangers posed by increasing public access. If an incoming Government introduced a right to roam, vermin control would be even more difficult, leaving aside the adverse effects of such a freedom on other wildlife that we wish to encourage.

For the prevention of deer damage, I also ask the Minister to review the encouragement of using expensive tree guards on ex-farmland—they blow over, take for ever to biodegrade and look like cemeteries—rather than using fencing, which can be less expensive, more effective and easier to manage.

Agricultural Transition Plan

Lord Carrington Excerpts

Wednesday 1st February 2023 Lords Chamber

[Lord Carrington (CB)]

My Lords—

[Baroness Bloomfield of Hinton Waldrist (Con)]

We have plenty of time. I think it is the turn of the Cross- Benchers, and then Labour.

[Lord Carrington (CB)]

My Lords, I declare my interests as a farmer, as set out in the register. I also express my thanks to the Minister and his department for the progress on and development of ELMS so far. I emphasise “so far” because there are still some areas of concern, and my two principal ones are as follows.

First, the implementation of biodiversity net gain becomes a legal requirement at the end of this year. We need to know how land set aside for BNG relates in terms of payment to land incorporated in ELMS, as this could be a major income opportunity for farmers. Secondly, there is a need for immediate clarity from Defra and the Treasury on income and capital tax treatment and reliefs, as well as the possibility of VAT on BNG and other aspects of ELMS, including woodland. I would be greatly relieved if the Minister could respond on these two points.

[Lord Benyon (Con)]

The noble Lord is right that the biodiversity net gain target becomes effective from November this year. We are working hard with other departments to ensure that that rollout is happening. I know that contracts and covenants are already being worked up by famers and their advisers. We see this as an income source from which they can benefit, and we want to ensure that it happens. This absolutely dovetails with what they are doing with environmental land management schemes. In addition to the noble Lord’s point, next month we are due to publish our green finance strategy, which will try to create the right degree of regulation in a market which some people refer to as “the wild west”, because you see all sorts of players offering farmers and land managers enormous sums of money, some of which is greenwash. We want to focus that, so we are working effectively to get ESG money and other funds invested in our natural environment through farmers and land managers in a meaningful way. As the noble Lord said, there are also tax concerns. We are in discussions with the Treasury on that, and we will ensure that we keep your Lordships abreast of those developments.

National Parks

Lord Carrington Excerpts

Wednesday 18th January 2023 Lords Chamber

[Lord Benyon (Con)]

I cannot give the noble Baroness an accurate assessment of what impact tree disease has had, or indeed Storm Arwen in Northumberland, which saw probably millions of trees blown down. Undoubtedly, that has an effect on wildlife, but wildlife can benefit from different ages of woodland being in a landscape. I hope the replanting schemes that are happening, whether because of disease such as ash die- back or events such as Storm Arwen, will see those areas planted as quickly as possible. It is not the national park doing that; it is the landowners and land managers within those areas, and Forestry England will be assisting them and giving grants for that to happen.

[Lord Carrington (CB)]

The Landscapes Review recommended that there should be an upgrade in the current duty to foster economic and social growth in national parks and AONBs. Please can the Minister confirm that the farming and other economic activities going on in those areas are not limited to tourism or sporting and other activities?

[Lord Benyon (Con)]

The noble Lord is absolutely right that it should not be restricted to what one might term the visitor economy. It is about keeping people living in these landscapes. It is about ensuring that they have the opportunities to conduct businesses of all kinds and that there are skills and opportunities for young people. When we talk about levelling up, I always feel that we should also talk about levelling out, into some of the more remote places, to make sure that the opportunities for families, young people and entrepreneurs exist in those landscapes as well.

Sustainable Farming Incentive Grants

Lord Carrington Excerpts

Monday 5th December 2022 Lords Chamber

[Lord Benyon (Con)]

It is absolutely vital that we have a strong tenanted farm sector in this country. It gives a plurality of land occupancy that encourages new entrants—that is, people who cannot inherit or buy land but can access farming. We have benefited from a really interesting report from my noble friend Lady Rock, which we are currently reviewing and which has more than 80 recommendations. We will respond in due course. Under the SFI, more tenant farmers can access this scheme than has been the case under previous schemes; this includes farmers with tenancies on a rolling, year-by-year basis. We have worked closely with the Tenant Farmers Association; we want to make sure that it can see a future in British farming in England.

[Lord Carrington (CB)]

My Lords, I declare my farming interests as set out in the register. It is actually quite easy to apply for the SFI but, of course, the devil is in the detail. A major contributor to the lack of take-up so far is the vast amount of record keeping and record taking that has to take place. The farmer needs to assess the soil of every single field at different levels, do a worm count, take photographs and so on. According to Agrii, the farm consultants, a consultant can analyse six fields a day. Most farms in this country have up to 100 fields that need to be analysed. That is one problem.

The second problem is that samples need to be taken every five years; this includes organic tests in laboratories, which are expensive and require the use of helium. Helium is in extremely short supply. Can the Minister say what he is doing about this?

[Lord Benyon (Con)]

First, what we are trying to do is bad news for land agents, because we have created a system that is simple; it takes somewhere between 20 and 40 minutes to enter the schemes currently in the process. We are turning those around within two weeks, in some cases, and within two months at most. I give credit to what the RPA has done in trying to get this right.

The noble Lord is absolutely right that there are conditions. This is public money. However, every farmer I know is doing soil tests and working with agronomists. The idea is that the cross-compliance and rules that govern this system should be straightforward and should not be a huge amount more work than farmers would be doing anyway—and in return, they will get public money.