Rural Economy

Lord Roborough Excerpts

Thursday 11th June 2026 Lords Chamber

[Lord Roborough (Con)]

My Lords, I am grateful to my noble friend Lord Fuller for bringing this important debate to your Lordships’ House and to him and others for outlining the issues so comprehensively and eloquently. Before I begin, I draw the House’s attention to my entry in the register of interests as a livestock farmer, forester and renewable energy developer, and as an investor in Deere & Co, Kana and Agricarbon UK Ltd, which provides services to UK farmers. I should add that I am grateful to my leadership for giving me the opportunity to return and for the warm welcome that I have received today from all parts of the House.

In the previous Session, the Government treated the countryside as a piggy bank that they could raid to finance urban spending. The 50% reduction in IHT reliefs on APR and BPR assets is expected to raise around only £300 million per annum, yet it has a profound impact on family business planning, particularly in the agricultural industry, where asset values are high relative to the incomes they generate. The partial U-turn came only after tireless campaigning, not just from those of us on these Benches, but from farmers and supporters up and down the country. We will not be satisfied until the reliefs return to 100%. Perhaps the Minister, after hearing these arguments today, might even choose to make that commitment, although I doubt it.

The Government have launched new SFIs after the unexpected and unsettling closure early last year. The government announcement this morning of only £240 million for the new SFIs and £50 million for countryside stewardship is deeply disappointing. Can the Minister confirm that this Government’s commitment to spend £2.4 billion on farming in this fiscal year will remain intact and that those funds will be spent only on ELMS and residual BPS and will not be diverted to non-farming uses?

SFIs were supposed to promote sustainable farming, not just to act as a blanket payment. Applications have been capped at just one per farm with fewer sustainable farming actions to choose from and a maximum payment of £100,000 regardless of the farm size. Not only does this remove support for farmers but it lessens the incentives to farm sustainably. Before the end of the previous Session, the Government again dramatically accelerated the reduction of delinked payments. Following the two recent aggressive reductions, farmers’ ability to plan their businesses financially was undermined. As my noble friend Lord Fuller mentioned earlier, the removal of the rural services delivery grant reduced support for the less fortunate in the rural community. In answer to the noble Baroness, Lady Royall, it was her Government that removed them, not ours.

On top of these specific actions, the rural economy shared in the pain caused to business and employment more widely through the increase in employer national insurance contributions and minimum wages and the Employment Rights Act. Rural affairs were completely absent from the King’s Speech. This is deeply disappointing. Grain prices are very low relative to costs, particularly fertiliser, and offer no profit opportunity to farmers. Margins available on new SFIs are compressed, and timber prices are on their knees as housing construction slows, despite this Government’s commitments. Farming and the wider rural economy are in a very dark place, and our food security is diminishing, but it is clear that the Government are not yet finished. More harm may yet be done to our rural economy. Alignment with the EU risks sacrificing hard-won successes and important, ongoing progress. The UK is leading the way in developing a cattle vaccine for bovine TB. Can the Minister guarantee that aligning with the EU animal health framework and veterinary medicines regulations will not slow or hinder that development or the deployment of a future vaccine? In addition, will the UK Government commit to securing a carve-out for gene editing and precision breeding and to preventing any labelling requirements discriminating against its produce?

The new sanitary and phytosanitary agreement does nothing to compensate for the Government’s decision to grant the EU 12 years of continued access to UK fishing waters. That is a lost revenue opportunity for our fishermen to the order of £1 billion per annum. What safeguards are in place for our fishing industry to ensure that it is not threatened further by closer alignment? The Government rejected the EFRA Committee’s recommendation to negotiate a transition period as part of the EU-UK SPS agreement for affected businesses. However, many growers and farmers will be making production decisions now for food sold beyond mid-2027, when this agreement is expected to come into force. What steps are the Government taking at least to ensure a smooth transition for businesses and that those businesses are actively engaged to inform the Government’s approach?

Looking ahead, the Government have pledged to ban trail hunting, despite it being a harmless rural activity that supports jobs and brings rural communities together. Hunting with dogs has been illegal in this country since the Hunting Act came into force in 2005. Why do this Government think it is now worth wasting parliamentary and police time to ban trail hunting? Surely our police have higher priorities, such as tackling waste crime, and the crimes that really do affect rural communities, rather than turning a harmless activity into a criminal act.

The farming and rural community is at a point where it does not believe that the Government cares for it or governs for it. This is a terrible place in which to be. We are seeing this in other policy areas, too, as other noble Lords have mentioned. In energy policy, solar farms are stealing prime agricultural land, rather than making the most of oil and gas in the North Sea to lower energy costs. Last year, the CPRE found that two-thirds of mega solar farms are built on productive farmland. This is at a time when our food security is increasingly at risk. It is beyond urgent that new drilling programmes are licensed and that Jackdaw and Rosebank go ahead in the UK North Sea. The only hope of lowering our fertiliser costs is to produce domestically, and that requires much cheaper gas to be competitive. In mentioning this, I draw the attention of the House to my register of interests as an investor in EnQuest, Valarais and Noble Corporation.

The Government must think clearly in their approach to the rural economy and focus on delivering new income streams to bolster agricultural revenues, which, as we have heard, are not currently sufficient to ensure farming continuity. Defra operates over 700 different services, 300 websites and 100 IT platforms, and uses 600 paper forms. If the Government really want to help farmers farm sustainably and landowners to deliver nature restoration projects, why not implement a single digital platform to improve ease of access?

Not only has harm been done; there have also been missed opportunities. The Environment Agency and Natural England need to get out of the way of the rural economy and the wider economy and enable more private investment to fund nature restoration, water management and other ecosystem services.

The creation of ELMS by our Government was intended to act as a segue into the private sector funding these services. ELMS offered to transmute public goods into private goods that bring tangible benefits to local businesses, infrastructure owners and communities. There is considerable evidence that this is starting to work, with projects such as Evenlode Landscape Recovery making significant progress.

The upcoming water reform Bill must enable water companies to use nature-based solutions, not just to rely on concrete and steel constructions. There is considerable enthusiasm in the sector for doing just this. However, Ofwat and the Environment Agency continue to show distrust of nature-based solutions, despite compelling evidence of reductions in peak flood events, better water retention to mitigate droughts and improved water quality, as well as benefits for carbon sequestration and nature recovery.

We enter this Government’s second Session with a distrusting and abused rural economy. The solutions require two changes in the Government’s mindset. The first is to appreciate that the rural economy is a critical part of our national economy and has to be treated with respect, as highlighted by my noble friend Lord Goschen. I ask the Minister: how many of his Defra colleagues have visited the agricultural shows this season? I do not expect him to answer today, but perhaps in writing.

Secondly, there is the realisation that Governments do not create national wealth or growth—in fact, the opposite. Big government trying to fix all problems undermines individual self-reliance and businesses’ ability to react positively to market forces, ultimately leading to the place we are in now. The Government have raised taxes, increased regulations and increased government debt, causing the economy to stagnate and denying opportunity to younger generations.

I look forward to hearing from the Minister. I am conscious that I have asked quite a few questions, and I am very happy if he needs to reply in writing. I thank all noble Lords who have offered their insights in this much needed debate.