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

Lord Rooker Excerpts

Wednesday 30th April 2025 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, the noble Lord, Lord Roborough, suggested that there was broad support for his Motion, and I rise to broaden that support and offer the Green Party’s support for both these Motions. I have no personal interest to declare, but the Green Party declares its great concern about food security in the UK and the state of the countryside in what is one of the most nature- depleted corners of this battered planet.

The background to this issue is the CAP scheme area payments. The Green Party has always argued against them, saying that they were deeply flawed and that those with the broadest shoulders got the biggest shovels of cash, while smaller farmers and growers got little or, in too many cases, failed to qualify at all. Our countryside was trapped in a world in which the message delivered by a series of Governments was, “Get big or get out of farming and growing”. We had the Agriculture Bill, your Lordships’ debate on which I took a substantial part in. It aimed to focus on environmental improvements and, indeed, after the intervention of your Lordships’ House, acknowledged the importance of food production. The SFI was supposed to be the scheme delivering on the environmental side of that. As we have already heard at length—I shall not track back over that ground—it was literally slammed shut. Many different metaphors could apply, but that seems a good one to me.

Many farmers are now clearly in a profoundly unsustainable position financially. They are being pounded continually by the dominance of the supermarkets and multinational food companies and are being forced to produce commodities rather than getting a fair price for their products. My particular area of concern is horticulture, vegetables and fruit, which is crucial for food security and public health.

I am not sure whether anyone has referred to the National Audit Office, which said that delay in the rollout of new schemes had made it difficult for farmers to plan their businesses and created “widespread uncertainty and risk”. That is true of many areas of our society, but particularly our farmers: if there is no possibility of planning for the future, it is essentially impossible to farm.

I have one constructive point to make, and I hope that the Minister will be able to agree with me on this, or at least accept my suggestion. She may know that there is a fast-growing campaign for a basic income for farmers as a way of supporting small farmers and growers in particular to be agricultural producers. This aims to guarantee financial security; boost mental well-being and reduce stress; promote inclusivity, innovation and ecological stewardship of the land; and strengthen local food systems and public procurement. Will the Minister agree to have a look at the basic income for farmers campaign, and perhaps arrange to meet me and the campaigners?

[Lord Rooker (Lab)]

My Lords, I rise to make a brief intervention. I have absolutely no interests to declare and I have no criticism of my noble friend the Minister or the Minister in the other place, the Member for Cambridge. In fact, in 14 years in opposition, he was the only shadow Minister who ever contacted me to ask me to talk about my experience of Defra and MAFF during the new Labour years of government. He listened, and that was fine—it was good to do, and I have no complaints about that at all.

However, I am reminded of a time when, at that Dispatch Box in about early 2002, when I was on my third ministry and the first in this House, I said that, in my experience to that date, the Treasury had

“wrecked every good idea I have come across”—[Official Report, 16/4/02; col. 837.]

in government. Obviously, the Chancellor was not very happy about that. The fact is that, three ministries later, before I left government, I was thoroughly justified. We have a classic example of this tonight. I am in favour of the CAP going; I have no problem with that—I am a remainer, but that is not the issue. I am in favour of reform of the CAP but, to wreck a good idea, it takes the Treasury. I do not hold Ministers responsible for this at all.

The fact of the matter is that you go back through the memories on this issue. The Minister talked about diversification. I can remember a very senior official saying to me when I was at Defra—I left Defra in 2008, so we are going back a little bit—that they did not really pay much attention to a particular farmer in the Lake District because he was not a full-time farmer, because he diversified into writing. That was what was said to me—it was because he was not a full-time farmer. Noble Lords are obviously aware of who I am referring to.

It is only my respect for this House and our procedures that prevents me walking out, because I have not the slightest intention of voting to support these regulations. I understand the rules about fatal amendments, but the Government would have to pick it up and do it again—that is the reality. We have the power, but we do not use it; as a senior Cross-Bencher said recently, powers you do not use, you lose, so there will come a time when we do not have that. I do not intend to vote to support this, so I will do exactly what my friend from the gym, the noble Lord, Lord Cromwell, said and I will abstain on both amendments. I will not hang around during the votes; I shall go.

[Lord Fuller (Con)]

My Lords, I add my name to those regretting these reckless regulations. I am particularly saddened, because they are just one element of a multipronged attack on our farmers, the supply trades and the entire food chain in one of the most important industries and sectors in our economy. I declare my interest in that I am involved in farming, but more particularly in the agricultural supply trade in the fertiliser industry. I therefore know more than most the damage and the harm that the Government are doing to those people who live in the sticks.

I listened carefully to the noble Lord, Lord Rooker; he said that he does not have an interest, but we all have an interest in the food industry. We have to eat every day, and food in your belly is more important than a roof over your head. The truth is that these regulations are harming a sector that needs finance in order to be sustained, to invest to grow. I do not know what rural Britain has done to deserve this metropolitan-based Government, who have turned an understandable and instinctive indifference into outright hostility. Like the noble Lord, Lord Rooker, I do not blame the Minister, because the fault lies elsewhere. She has always been most courteous and honourable and she acts with integrity in this House, which we thank her for.

The truth, however, is that this Government must be held to account because their actions are harming today’s farming profitability, which drives tomorrow’s corporation tax revenues. They are damaging the long-term capital underpinning of the industry, which harms investment, innovation and growth. This is collapsing the cash flow, that financial lifeblood that makes it all happen. I will speak to each of those three elements in turn.

On profitability, it is a shame that the noble Baroness, Lady Batters, who is meant to be leading a review for the Government, is not in her place. She would have told us, had she been here, that farmers are already under terrible, tremendous financial pressure, caught in that pincer movement between low grain prices and elevated input costs. Tighter margins are pressured by the national insurance rises, and now there are these inexplicable plans to persevere with a fertiliser tax that could add a quarter to the cost of the most expensive input, flipping even breakeven businesses over to loss.

On the balance sheet, the effect of the agricultural property relief element of the inheritance tax has been well ventilated. I will not dwell too much on that now, save to say that it is the effect on the business property relief—slightly different—that particularly harms the self-starting, innovative and entrepreneurial tenant farmers, who live by their wits because they did not have the good fortune to inherit the land, free of charge, upon which they make their living. The effect of all these in combination is to remove the long-term generational incentives to invest in the farm, develop the countryside and the landscape, protect nature and, yes, in so doing sustain wealth in our islands, particularly in the shires, where, let us not forget, 90% of businesses employ 10 people or fewer.

I have heard the argument that the IHT can take 10 years to pay, but those annual instalments over 10 years would be more than would be paid by the rent. It is just cloud-cuckoo-land.

Landed estates, for the most part, have already incorporated, in one form or another, or transferred to trusts, so once again those farmers left behind are the smaller farmers. Totally contrary to what Minister said, with these effects Labour is targeting the little guys, the sole traders, the family partnerships, particularly in the less favoured areas, while allowing those larger, more corporate farmers—the ones she says have the broadest shoulders—off the hook.

It is the summary cancellation of slurry lagoon grants that, more than anything, could help solve the problem of river pollution. It is the cancellation of those twin cabs on pickup vehicles. Let us be clear, these pickups are tools of trades. They are as good as a tractor. They are the sort of thing that a man in a factory would have as a crucial part of the plant and machinery involved in the business. It is really a spiteful misunderstanding of how investment in plant and machinery works.

All of these contribute to this £80,000 a year profit cap on aspiration, which is the number that, through EBITDA, gets you to the million quid, at which APR and BPR kick in. If we stop that aspiration, how are we going to grow an economy? This is what is happening, so, yes, I have sympathy with what the noble Lord, Lord Rooker, said: this is the Treasury holding the economy down and not letting it flourish.

As for cash flow, since we have mentioned these delinked payments, I want to put a number on this; I do not know why the number is what it is, but I have it in front of me. A specimen 680 hectare farm that would have received £160,000 in 2020 will receive just £7,200 this year, over and above all those other financial headwinds that I have mentioned. A black zero is the best that many farmers can now expect. How does that help everyone? It is particularly important because, although I do not want to dwell too much and repeat the points my noble friend Lord Roborough made from the Front Bench, there was that interplay between the delinked payments and the SFI, and by taking one away the contract between the Government, Defra, farming and the food industry, as well as the supply trades, has been broken. That has a knock-on for machinery dealers, contractors, auction marts, professionals and those family businesses disproportionately affected in the countryside.

In summary, no wonder people living outside the M25 and the conurbations think they are under attack from the cumulative effects of all these proposals in a concerted war on the countryside. The effect is also, astonishingly, to undermine the Government’s environmental objectives, because the effect of all of this is that if land is put under the plough, it must be pushed as hard as possible to get a return. I suppose that leaves more land not ploughed, for other environmental schemes. In essence, it proves that Labour does not understand the countryside, but I tell you, the countryside now understands Labour. The industry that, more than any other, meets the most basic human need—food in your belly—is being made unviable, and rural communities are paying the price.