Flour Milling Sector

Viscount Stansgate Excerpts

Thursday 12th February 2026 Grand Committee

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

My Lords, I am very grateful for the opportunity to respond to this debate. I thank my noble friend Lord Rooker for securing it, as well as the noble Lord, Lord Vaizey, and the noble Earl, Lord Effingham, for their contributions. I pay tribute to my noble friend Lord Rooker for all his invaluable work and interest in food safety; he has long been a champion in this area and I would like to take this opportunity to acknowledge that.

I declare an interest in that my family have constantly used Wessex Mill flour for our baking; we love baking bread using that flour. I am well aware of Wantage town square and the King Alfred’s Head pub which is there. Wessex Mill flour is sold in most of the farm shops in Wantage and Woodstock, so I am very familiar with it. I thank my noble friend for bringing this up today.

I pay tribute to UK flour millers nationwide who work every day to produce high-quality flour and help feed the nation. Flour may not always attract attention, but it is fundamental to our daily lives. Flour is a key component of the UK diet, essential not only for industrial bread production and home baking but for a wide range of supermarket foods, as several noble Lords mentioned.

Together, the farming, milling and baking supply chains are critical to national food security. The scale of that contribution is striking. The Federation of Bakers reports that around 12 million loaves of bread—I think it is 12 million, rather than 10 million—are supplied to consumers every day in the UK. That does not happen by accident; it relies on a dependable, resilient milling sector that can operate day in, day out.

The UK flour milling sector processes around 6 million tonnes of wheat each year, and about 85% of that wheat is grown here at home. This means that the sector is near self-sufficiency and provides a stable, reliable market for British farmers. That matters economically and strategically: it supports farm incomes, strengthens rural economies and reduces our exposure to global market volatility. In economic terms, the flour milling sector contributes several hundred million pounds in gross value added each year and supports thousands of skilled jobs. These jobs in not only in the mills: they span farming, transport, storage, engineering, packaging and food manufacturing. Many are located outside major cities, sustaining local economies where alternative employment opportunities can be limited. The sector is also capital intensive and long term in outlook.

Mills require substantial investment, high technical expertise and decades of operation. In recent years, millers have invested heavily in modernisation, improving energy efficiency, reducing waste and upholding high standards of food safety and quality. That investment boosts productivity and supports the wider food and drink manufacturing sector, the UK’s largest manufacturing industry, which generates £129 billion in turnover and over £22 billion in exports, and supports more than 4 million jobs.

The Government’s assessment of economic impact also accounts for resilience. Recent years have tested global supply chains through conflict, extreme weather and sharp movements in energy costs. Through it all, the UK flour milling sector continued to operate. That resilience has real economic value, even if it does not always show up neatly in headline figures.

In response to the noble Lord, Lord Vaizey, and the noble Earl, Lord Effingham, a highly resilient energy network is fundamental to support this. We acknowledge this and are confident that the system operators have the tools they need to effectively balance supply and demand in a wide range of scenarios. Our millers rely on high-quality British wheat, so the future strength of milling is closely tied to the future of farming. That is why this Government have made a cast-iron commitment to the security of our farming and food sectors.

Food security is national security, and it depends on a balance of strong domestic production and reliable global supply chains. It also requires a clear vision for the future of farming. To that end, Defra is developing a land use framework, which I hope the noble Lord, Lord Vaizey, will welcome and which will be published early this year. It will set out a long-term vision for land use policy and guide how decision-makers make better land use decisions on the ground.

In response to the noble Earl, Lord Effingham, I say that the 25-year farming road map will bring together regulation, innovation, skills and investment to show how we will sustain food production, meet environmental goals and deliver a profitable, resilient farming sector. This matters directly to millers, as productivity, quality and sustainability in wheat production underpin the success of the entire supply chain.

Alongside this, Defra continues to invest in farming and innovation. The farmer collaboration fund will provide up to £30 million over the next three years to support farmer groups with expert advice and partnerships that drive growth and deliver environmental outcomes. A new farming and food partnership board, chaired by the Secretary of State, will work across the supply chain to remove investment barriers and improve operations. Through the farming innovation programme, we are supporting projects in key areas, including pest and disease control and alternative fertiliser use, and are committed to investing at least £200 million by 2030.

Defra also supports the crop genetic improvement network, which is a £15 million research platform focused on improving key arable crops. This work is already delivering results, including wheat varieties with improved resistance to diseases such as take-all and orange blossom midge, and progress towards more drought-tolerant, climate-resilient wheat.

In addition, Defra continues to fund the long-standing survey of crop pests and diseases, which provides vital data to support alternative control strategies and to reduce reliance on chemical inputs. These investments support farmers and strengthen the raw material base on which flour millers depend. The milling supply chain has robust traceability standards. Millers buy wheat only from assured suppliers, with farms adhering to best practices and maintaining audited records. This traceability supports consumer confidence and underpins the UK’s reputation for high food standards.

In response to the noble Lord, Lord Vaizey, I say that organic farming offers many benefits to the wider environment, and Defra is committed to supporting producers to grow organic crops. We recognise that transparency is essential to maintaining trust in the organic label. Organic grain must, by law, be free from genetically modified material, and Defra recognises that the development of precision-bred products raises concerns for the sector. Defra will work with the sector on retaining confidence in the organic label.

We are also taking action to ensure that supply chains operate fairly. Last year, Defra launched a public consultation on contractual practices in the combinable crops sector, giving farmers and stakeholders the opportunity to share their experiences and to help the Government build a clear picture of how the system operates.

I also welcome the strong commitment from the milling sector to include folic acid in non-wholemeal flour by the end of 2026. The cost of this fortification is low—adding folic acid to flour costs under 1p per loaf of bread—so it is easily affordable for manufacturers. This is a clear example of industry and government working together to deliver public health benefits.

International trade remains important; the noble Lord, Lord Vaizey, and the noble Earl, Lord Effingham, touched on this point. Arable commodities are traded globally, and food security depends on domestic production and imports, supported by robust global supply chains. Trade can help businesses grow and open new markets, but we are clear that trade deals must not—I stress “must not”—undermine UK producers. As noble Lords know, negotiations with Turkey are ongoing, but we have always been clear that this Government will protect British farmers, secure our food security, and uphold our high food, animal welfare and environmental standards in trade deals; that is exactly what we have done and will continue to do.

On my noble friend Lord Rooker’s point about monitoring, the UK Government and the devolved Governments are putting plans in place to monitor the impact of such changes. The level of folic acid fortification will be kept under constant review. I hope that my noble friend will continue to engage with the department to ensure that this monitoring happens.

The noble Lord, Lord Vaizey, asked about the skills levy. This Government are transforming the apprenticeship offer into a new growth and skills offer, which will offer greater flexibility to employers and learners and support the industrial strategy. The growth and skills levy provides a more flexible offer; I think the noble Lord mentioned various other short-term courses, so I hope that this will give him some comfort.

As I am sure noble Lords are aware, we recently announced changes to inheritance tax. More family farms are now protected from inheritance tax. The Government have increased the agricultural and business property relief threshold from £1 million to £2.5 million, and couples are now able to pass on up to £5 million tax free, meaning that 85% of farming estates will pay absolutely no inheritance tax. This is where the Government are supporting small family farms.

I will have to write to the noble Lord, Lord Vaizey, on R&D tax credits, because that are is more for the Treasury. I will speak to my colleagues and ensure that I write to him, with a copy of that letter being placed in the Library.

In closing, I again thank my noble friend Lord Rooker for enabling this debate. The Government recognise the essential role that the UK flour milling sector plays in supporting British agriculture, underpinning food manufacturing, sustaining skilled employment and strengthening national resilience. Although it is largely out of sight, this economic value is felt across the food system. We will continue to work closely with the sector to ensure that it remains competitive, resilient and able to play its full part in a secure and prosperous food economy.

[The Deputy Chairman of Committees (Viscount Stansgate) (Lab)]

My Lords, this has been an interesting, if short, debate. I hope that the Committee will join me in wishing the noble Lords, Lord Rooker and Lord Vaizey of Didcot, a happy joint birthday on 5 June; I wish everyone else a good February Recess. In the meantime, the Grand Committee stands adjourned until 4 pm.