Flour Milling Sector

Earl of Effingham Excerpts

Thursday 12th February 2026 Grand Committee

[The Earl of Effingham (Con)]

My Lords, I thank the noble Lord, Lord Rooker, for tabling this Question for Short Debate. It is of particular interest to me as one of my acquaintances in Oxfordshire mills heritage and ancient grains, and I understand the huge benefits of a strong and stable UK flour milling sector. As my noble friend Lord Vaizey rightly flagged, almost one-third of the food products on our supermarket shelves contain flour as a primary or secondary ingredient. To help put that into perspective, more families eat flour-based products than have access to the internet. I must thank the noble Lord, Lord Rooker, for flagging toothpaste as well, which I did not realise. Flour’s ability to go everywhere is truly amazing.

It is clear that the 51 flour mills across the country contribute strongly towards our food security in an increasingly unstable geopolitical environment that contributes to fragile global supply chains. The noble Lord, Lord Rooker, and my noble friend Lord Vaizey flagged that with more than £2 billion in annual turnover, flour mills generate £770 million in value added to the economy and are one of the UK’s most productive sectors. We also touched on the fact that flour milling is a near zero-waste process, since the by-product can be used by the animal feed industry. Millers rely heavily on UK farmers of wheat, who keep traceability records and are independently audited. It is clear that the industry is well integrated with our agricultural sectors and critical to our food security.

I hope that the noble Lord, Lord Leong, with his extensive business experience, will agree that we owe it to the 9,000 employees that the sector employs, directly and indirectly, to back them with a supportive policy environment. The industry faces challenges and it is the responsibility of His Majesty’s loyal Opposition and other noble Lords to highlight the obstacles to growth that the Government have inflicted, unintentionally, on farmers and the flour milling sector. The noble Lord, Lord Vaizey, correctly highlighted that many flour milling businesses are family owned and are therefore especially vulnerable to reductions in business property relief for inheritance tax.

Furthermore, the Government’s trade deal with the US caused significant harm to our bioethanol industry. This, in turn, removed a crucial market for British wheat farmers. Flour millers and farmers have to compete with international producers, suppliers and importers. Of course, we encourage competition, but we must not continually disadvantage British producers by imposing ever more regulation while importing products from abroad that might be produced to lower food safety and quality standards.

During Oral Questions today, the noble Lord, Lord Blencathra, rightly highlighted that pigs and chickens abroad must experience the same standards as our pigs and chickens in the UK. We must have a fair and level playing field, so will the Minister please clarify whether any further regulatory changes to food standards are planned? We should be proud that in Britain we hold ourselves to such high account, but it is clearly not reasonable or fair on our own UK businesses for the Government to allow double standards to be implemented. Therefore, although many of the Government’s strategies and environmental targets are no doubt well intentioned, new challenges are arising which mean that the Government must prioritise increasing our own domestic production capacity.

I turn to the consequences of the ongoing energy transition. I must be clear that we on these Benches do not wish to carpet the countryside with large-scale solar farms, nor do we want to sacrifice high-quality agricultural land for the benefit of a flawed net-zero policy. However, in some cases, solar energy generation is now seen as more profitable for landowners than wheat production. The noble Lord, Lord Vaizey, highlighted that challenges for wheat producers then become challenges for flour millers, forcing them to rely on imports and putting further pressure on supply chains. We urge the Government to undertake a risk assessment of this impact. If more people eat flour-based products than have the internet, the Government should surely desire to protect this industry and not harm it.

The noble Lord, Lord Vaizey, mentioned energy costs. As we know, flour milling is energy intensive and businesses are especially sensitive to higher energy costs. We have been clear on this issue: we need to bring energy costs down and we must therefore ensure that the Government’s pursuit of an energy transition does not price out flour millers or displace domestic wheat production. In fact, a more supportive policy environment would encourage lowering the industry’s carbon intensity. As the noble Lord, Lord Vaizey, highlighted, the flour milling industry has a long history of research and development investment. In the past decade, over £250 million has been invested by millers. Further enabling research and development will help businesses to innovate and modernise their practices, while at the same time lowering their carbon intensity.

It would be economically disastrous and environmentally irresponsible for the Government to simply outsource this industry to other countries. At a time when young people are struggling to find jobs, the Government could make more of this economic asset by, for example, allowing apprenticeship levy contributions to fund training and develop opportunities in the milling industry. Will the Government consider that as an option, as was so eloquently asked by my noble friend Lord Vaizey? We really must try to do everything in our power to protect this sector, for a multitude of different reasons, and rural communities are looking to the Government to act at pace with a clear vision for the future.