Agriculture (Delinked Payments) (Reductions) (England) Regulations 2025

Lord Grantchester Excerpts

Wednesday 30th April 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, I support the fatal amendment tabled by my noble friend Lady Grender. This fatal amendment rightly calls on this House to decline to approve the Agriculture (Delinked Payments) (Reductions) (England) Regulations, on the grounds that they accelerate the reduction of delinked payments without adequately establishing alternative funding schemes.

I will not repeat the arguments that have been made by my noble friend Lady Grender and others. We are all aware of the proposed dramatic acceleration in the reduction of delinked payments for 2025, and how this has come on top of the completely unexpected and sudden withdrawal of SFI payments. These two factors leave thousands of farmers who were in the process of applying—some 6,600 applications—frozen out of the payments system, and this is unacceptable.

This double blow of slashing established payments while closing the door to the replacement scheme has thrown thousands of farming businesses into disarray. It creates severe cash-flow crises for farmers across the country and has damaged the bond of trust between our farmers and this Government. It is particularly crippling for those who are yet to enter the agri-environmental schemes, and particularly impacts our upland and small-scale family-run farms, which are still largely excluded. The average English less-favoured area livestock farm could see its profits fall by almost half. The Government claim that the money saved from delinked payments will stay within the sector and I welcome the Minister’s guarantee to say that today.

I turn now to the arguments for the need for the fatal amendment before us today. Of course, these procedures should be used rarely or reserved for the issues of utmost importance. However, if the imminent collapse of so many of our family-run farms—which are the backbone of our farming businesses—due to unhelpful bureaucracy that is causing them to go bankrupt does not fit these conditions, I do not know what does.

The Conservative Benches have their own regret amendment on the Order Paper today. A regret amendment is too little and too late to offer our family farmers any hope of real, meaningful change that will save their livelihoods in time; it will not accomplish the meaningful change we require. The Conservative Benches have already made the argument that they do not support fatal amendments by convention. A simple look at history shows that this is simply not correct. The House of Lords Library briefing that I asked for shows that there have been 21 Divisions on fatal amendments since the start of the 2014-15 parliamentary Session.

Equally, the notion that the Conservatives do not call votes on their own fatal amendments is also historically incorrect. I remind the Conservative Benches that they called a vote on a fatal amendment—and won it, by the way—in response to the Blair Government’s proposals to prevent non-Labour candidates having an official election address at the first London mayoral elections. Other votes have been called: the noble Baroness, Lady Young, called a vote on the Prescription Only Medicines (Human Use) Amendment (No. 3) Order; Lord Dixon-Smith called a vote on the Local Authorities (Executive Arrangements) (Access to Information) (England) Regulations; Baroness Miller of Hendon called a vote on the Weights and Measures (Metrication Amendments) Regulations; Baroness Blatch called a vote on the Education Act 2002 (Modification of Provisions) (No. 2) (England) Regulations. So I appeal directly to the individual Members of the Conservative Benches to put aside their current perceptions of parliamentary procedure and stand behind our farmers in their hour of need. Vote in favour of the fatal amendment before us. As the noble Lord, Lord Roborough, said, regret is too gentle a word.

The dire financial situation our farmers face undermines the very foundations of British farming. It puts Britain’s food security at further risk and impacts our ability to fight climate change. It disproportionately affects smaller farmers, hill farmers and our vulnerable tenant farmers. Concerns have also been raised about the competitive disadvantages of our farmers against their Scottish and Welsh counterparts. It is shocking that the Government proceed without a comprehensive impact assessment that looks at the collective effects of these changes, and their cumulative impact on our farming communities. Farmers are essential custodians of our land, producing our food and caring for our environment. They need certainty, stability and fair financial support for the vital public goods they provide. The Government’s current approach offers none of this. Approving these regulations would endorse a flawed and damaging transition. I urge all noble Lords to support the fatal amendment and send a clear message to the Government that this approach is unacceptable and they must urgently change course to support our farmers properly.

[Lord Grantchester (Lab)]

I preface my remarks by thanking my noble friend Lord Rooker for his comments. They resonate so much with me in terms of how this Government have approached the farming sector, which is to be regretted. I will go on to say much in support of my noble friend here on the Front Bench.

I always remember that my father—who was not a farmer, by the way—used to say that the Treasury does its best to strangle every good initiative at birth. I very much concur with his comments.

I thank my noble friend the Minister for her explanation of the regulations before us today. I also thank her for her Answers to Written Questions on 3 April, where she laid out the Government’s plans for the reinterpretation of the sustainable farming incentive. I declare my interest as being in receipt of payments regarding a dairy farm.

However, after I submitted Written Questions to the Table Office, they were separated into distinct Questions. One became redrafted and reinterpreted and was thereby lost. However, in her Answers, which I am grateful for, she stated:

“Every penny of the reductions to delinked payments will stay within the sector”.


I know that was one of the concerns at the time of the SFI closure announcements, and I am glad she has reiterated it tonight. Her other replies on the Government’s intentions regarding SFI were extremely useful.

I have today resubmitted the Question and if I may will ask my noble friend tonight, so that it completes the picture regarding the intentions of the Government. This period of transition initiated on Brexit has been extremely long and arduous for farmers and growers. I was extremely critical of the previous Conservative Government cutting back on support payments under BPS over this transition period long before there was any clarity from government on environmental schemes ahead. That these have now been worked up and brought forward by this Government is to be welcomed.

The payment for environmental benefits has been made worthwhile and meaningful compared with the cost of the enterprise to undertake them. This has been reflected in the successful uptake of the sustainable farming incentive, leading to a full budget allocation, in contrast to the lack of uptake in the previous Conservative Government’s allocation.

My noble friend and her colleagues in the other place are to be congratulated. Now that there are meaningful programmes for environmental improvements, I can understand and appreciate that the Government wish to move ahead to these ELM schemes and hasten the change from the legacy systems of BPS in the transition. Now that there are these schemes, I cannot support these regret amendments.

However, the timing of the progressive withdrawal coincides with a pause in the success of the SFI scheme in bringing forward an oversupply of applications. It is imperative that this temporary pause is short-lived and that there is clarity on the way ahead, especially for the 3,000 to 6,000 applicants who were preparing to join the scheme.

So, my question which was overlooked and which I would now like to ask the Government is: is it their intention to maintain and continue with a universal scheme open to all farm types on an equal basis? We cannot and must not lose sight of the role of all farms in hitting environmental and sustainability targets. Can my noble friend the Minister assure the committee that any reinterpretation of SFI will continue to be available to all farms and continue to be worthwhile to bring the necessary changes and benefits to the UK’s agricultural land management?

The agricultural transition must continue to be inclusive. There has been a lot of complexity to navigate and the contemporary problems of overspend must not detract from fulfilling the promise of bringing forward a more sustainable agriculture, and I commend the department on how simple it is to enter the scheme.

Many of those in the process of an application may have been subject to the complex rules of the transition between an ELM or mid-tier Countryside Stewardship scheme, which were subject to five-year agreements, and the SFI incentive. Those farmers will need answers.

I realise that there are further dimensions around the policies that must be assessed with the forthcoming road map and the land use framework. However, I urge my noble friend the Minister and her colleagues in the department to bring forward a continuing and meaningful scheme as soon as possible.

[The Earl of Caithness (Con)]

My Lords, the present financial crisis that farmers face was an inevitability the moment we voted for Brexit—I said so at the time. It was a question only of when it was going to happen. HM Treasury knew that there was a budget set in Brussels and that it could get its sticky mitts on to it; once they did so, the farmers were going to be in trouble —and in trouble they are.

My noble friend Lord Fuller was absolutely right to say that it is a much bigger issue than the SFI and the basic payment system; it is across the board. The noble Lord, Lord Cromwell, said that Defra’s reputation is at its lowest in living memory—that is a sad thing to have to say in this House for all the farmers.

The SFI was a victim of its own success; it was too good to be true, and it was inevitable that it had to be ended or changed. Perhaps that could have been done much better, and there should have been advance warning, but, given the way it was structured, it was inevitable that the benefits were not distributed evenly.

The basic payment system, for all its faults—here I chide the Minister for portraying the beneficiaries of the basic payment system as, I think, large and wealthy landowners—was for every farm business. There was equality; it went right across the board. That is not the case for the SFI, which is one of its faults. If you look at the figures for the SFI, you will find that there are 7,800 agreements in the south-west and 1,000 agreements in the north-east. That is not an equal distribution across the country. On top of that, one needs to remember that over half of the land in England is tenant farmed—they are not large, wealthy landowners.

The need for equal distribution is an important feature for the Government to consider when adapting the scheme. We have a great opportunity now for the Government to come forward with a revised SFI scheme, but two important changes need to be made to the current scheme: first, it must be available to all on a fair basis, and, secondly, it must benefit nature.

One of the problems of the existing SFI is that it has not necessarily benefitted nature. It benefited some farmers who got in there early and made a lot of money, but the figures that I cited for the distribution of the SFI show that there were patches where nature was going to be improved and patches where nature was not getting any benefit at all. That is perhaps the only thing that I would add to my noble friend Lord Roborough’s regret amendment. I am sad that he did not include “and nature and biodiversity”, because that was part of the SFI. Yes, the farmers were going to benefit, but it was public money for public goods, and that includes biodiversity.

I will outline my particular fear, as I think this is bound to happen. A whole lot of farmers signed up to the middle tier of the Countryside Stewardship scheme in 2020, which was to last for five years. I believe that there are about 14,000 farmers in that category—the Minister might correct me if I am wrong, because it is important to get it right. Those people were the good farmers: they were ahead of the game, and they took the difficult decision to go into something that was a new idea—and new ideas tend not to work terribly well to begin with—in the expectation that, at the end of the five years, there would be another scheme for them to go into. However, what they will now find is that the doors have slammed shut: there is no scheme for those people to go into.

You can drive around the countryside, which is looking particularly good in the spring sunshine at the moment, and look at those areas of bird seed where the drills have gone down you have bird seed, leys and areas set aside for nature. Next year, they are not going to be there because those farmers have no option but to plough up all the good they have done in the last five years, put it down to corn and put the combine in. That would be a tragedy.