Queen’s Speech

Lord Carrington Excerpts

Wednesday 11th May 2022 Lords Chamber

[Lord Carrington (CB)]

My Lords, this has been a most wide-ranging and interesting debate, and it is a great pleasure to follow so many knowledgeable people, including the right reverend Prelate the Bishop of Guildford. I declare my interests as a farmer and landowner as set out in the register. I too welcome the intention to bring forward legislation to assist in the levelling-up agenda, which was clearly signalled in the February White Paper. However, as we heard from the right reverend Prelate the Bishop of St Albans, there was precious little in the paper on the challenges and opportunities faced by rural areas; it had a distinctly urban focus.

I am proud to have been a member of the APPG on Rural Business and the Rural Powerhouse, which, as mentioned by its co-chair, the noble Lord, Lord Cameron of Dillington, released a report in April entitled Levelling up the Rural Economy: An Inquiry into Rural Productivity. I shall briefly concentrate on just a few of the issues raised, and look forward to a response from the Minister on how the Government see those challenges and their likely solution.

First, there are the perceived drawbacks of a planning system that is under-resourced and fails to consider the need for economic growth in rural areas. In particular, there is the need to recognise the importance of affordable housing in smaller local communities, rather than concentrating on larger developments. Employment and housing are essential for a thriving local community, or the young, who cannot afford expensive and often unsuitable existing housing, will move away and local businesses will suffer. The National Planning Policy Framework excludes small housing developments in the countryside, affordable or not, and sites of redundant farm buildings do not meet the definition of brownfield sites, which means that farmers and other rural businesses are unnecessarily constrained in their attempts to diversify into other activities. This is extraordinary when, following the steady reduction of the basic payment to farmers and the introduction of ELM schemes, which are not designed to compensate for the lost basic payment, the farmer is being encouraged to diversify. Depending on his diversification, how can he achieve that if he cannot convert his farm buildings if suitable? This indicates the need to redefine permitted development rights. To increase the efficiency of the planning process, the APPG report calls for a training budget specifically for planning officers on rural issues, with additional officers.

Secondly, there is the need to amend and clarify the taxation of appropriate rural businesses, as mentioned by the noble Lord, Lord Cameron of Dillington, to reflect the changing economic environment following the introduction of ELMS and the consequent increase in diversification away from farming. There is a strong argument to recognise a specific rural business unit as one unit for taxation purposes. Currently, these businesses must separate their activities into different silos, although they may be commonly owned, managed and often use the same assets as each other. With a rural business unit, activities such as farming, a riding school, a farm shop and cottage letting could report as one entity. Associated with this is the need to clarify the applicability of conditional exemptions, such as agricultural property relief and business property relief. This could be used to ensure that landowners are actively encouraged to build affordable housing and housing for social rent in those villages. Similarly, to incentivise activities that mitigate climate change, such as solar schemes, environmental schemes and carbon sequestration, the applicability of those reliefs needs clarification.

Thirdly, there is the requirement on the private rented sector that by 2025 all properties have an energy performance certificate of band C or higher. The Government appear to have a one-size-fits-all solution to changing the way we heat our homes. We are currently trying to replace gas and oil-fired boilers. However, the preferred and uniquely subsidised solution is to replace these with heat pumps. In much of the countryside, which is not on the gas grid and where houses may be of older and traditional construction without cavity walls, or may be listed, the heat pump solution can often be much more expensive than looking at other technologies, such as hydrogen or renewable liquefied gas. This means that many rural properties will be unable to reach bands B and C.

Incidentally, the measurement of these bands is open to dispute, as the carbon stored in older buildings is not considered, nor the carbon generated by the construction of new buildings. Government funding should be allocated to technologies other than heat pumps, and there should be clear recognition that other solutions and exemptions will be required.

Finally, I highlight the possibility of the abolition of Section 21, which raises many genuine concerns that will be debated. Among them is the threat to prevent landlords evicting a tenant at the end of the tenancy period to which the renter has voluntarily agreed when signing the lease. Why would a landlord offer a fixed-term, short lease if the term was effectively in perpetuity? Assuming the landlord has no other use for the property and the tenant has been paying his rent, there is little likelihood that the tenancy would not be renewed, but there are many justifiable circumstances in which the landlord may require that property for another occupant, let alone for himself or if he wishes to sell the property—for instance, where the property needs to be occupied by an essential worker in the business or activity to which that property may be connected. An obvious example of this in the rural sector would be on a livestock farm, where proximity to the job is essential, but it could also apply to nurses, teachers and the police. Limited affordable housing stock in rural areas makes alternative accommodation difficult for some occupations. By all means, let us create longer minimum-term tenancies, but flexibility remains important, or the private rented sector will decline.

There are many other issues relating to levelling up in areas that have already been covered by other noble Lords. However, the overwhelming conclusion that one comes to from reading this report is that some form of cross-government co-ordination, as referred to by the noble Lord, Lord Cameron of Dillington, is essential so that all these opportunities and issues are properly addressed.