Rural Economy

My Lords, I spent yesterday standing in a field in that new spiritual home of British agriculture, Diddly Squat Farm in Oxfordshire, for the cereals trade show. Nearly 20,000 farmers, growers, advisers, machinery dealers, drone flyers and, yes—by way of declaration of interest—fertiliser suppliers such as myself, huddled under umbrellas, wearing wellingtons, talking trade. The host, Jeremy Clarkson, has said that there cannot be a single farmer left who supports this Government. I can tell noble Lords that my experience yesterday proves him correct. Indifference from a north London-based Labour Party sadly has morphed into a hatred of those who live in the shires—those who put bread on the table and sustain our nation—with no signs of contrition in the gracious Speech. You know the malevolence has reached an apogee when even the former Secretary of State for Health and the current Mayor of Manchester have realised that this ritual rural abuse must stop. It has taken a while, but those two honourable gentlemen have worked out for themselves that Labour’s war on the countryside has gone too far and must be halted. It is because the food, drink and agriculture business is big. Agriculture’s annual contribution to the UK economy is £13.9 billion. But this is not a debate about farming alone; the debate is wider than that. This debate seeks to hold the Government to account for the damage they have wrought on those who live in the sticks: the places where the Uber cannot come and collect you from the pub at 11 pm, because either the pub has closed down as a result of Labour’s war on the high street in our market towns, villages and coastal communities, or because there is not an Uber in the countryside anyway. You see, we do different out in the sticks. It is not just rural pubs. It has been terminal for country house hotels and other hospitality businesses, filleted by extra rates, hobbled by new employment taxes and made unviable with other levies, fees and charges such as the tax on glass bottles. It is not just hotels; it is also private schools. Many custodians of wonderful grade 1 heritage buildings are the last employers where they have made country towns factory towns: places such as Holt, Marlborough, Oakham and Uppingham. Mostly charities, they are significant contributors to the UK exports for services, but the Government are deaf to that reality. In these places, they are the factories employing hundreds. The people who work there—cooks, cleaners, groundsmen and, yes, teachers—are not rich, but they have been the collateral damage in a class war that has seen them lose their jobs in areas with so few other opportunities. So much for the party supporting the workers. We have seen £110 million slashed from rural councils with the abolition of the rural services delivery grant. Devon lost £10 million out of £100 million. Norfolk is not far behind and North Yorkshire, our largest rural county, has lost over £12 million, with the countryside being short-changed. Support for off-grid home owners, people off the beaten track who heat their homes with oil, has been nothing but an inadequate afterthought. Now we see a fresh war on country pursuits, which employ thousands, enhance conservation and dispose of fallen stock while keeping the country pub going in the winter—not with fallen stock, I hasten to add. On Tuesday, the noble Lord, Lord Deben, raised the inexplicable behaviour of His Majesty’s Revenue and Customs, which refused to refund millions in VAT incorrectly levied on county show societies that could force their insolvency. We see that political indifference is now infecting the behaviours of the departments of state, damaging the cultural life of the countryside. Now let us dwell on the harm inflicted on farmers, which structurally undermines our food security as the result of the sustained attack on those who feed us. Last summer there was a ham-fisted cessation of SFI, which could have helped the natural world. What an irony that it has led to farmers intensifying production instead. We saw the cancellation of slurry lagoon grants that, more than anything, could have helped reduce river pollution. We have empowered private equity and sovereign wealth funds to compulsorily purchase land for other purposes. All these have shot the environment in the foot—an activity that will be possible only until shooting itself is sidelined. Thinking of the rural economy more widely, let us consider the inheritance taxes levied on farmers and other family businesses, which are disproportionately clustered around our market towns in modest trading estates. Together, they employ millions in firms handed down in trust for the next generation. However, they are being systematically filleted and starved of working capital in a way that foreign owners, private equity or publicly traded shares held by pension funds are excused from. This spiteful apartheid disproportionately affects firms in the provinces, especially the large number of rural trades involved in food processing, machinery dealing, fencing, ditch digging, plant hire, and any other ancillary trades, such as timber and buildings merchants, and the haulage contractors that fetch and carry supplies. We see that Labour’s economic illiteracy is chilling the private investment that drives growth, reducing profits today and damaging the corporation tax revenues of tomorrow—all of which pay for schools and hospitals. We have a Chancellor boasting about free bus travel for youngsters in August. If only there were buses in the countryside for them to ride. Instead, those who drive those twin-cab trucks, who know how to get up in the morning, are to be taxed more heavily. All these people need to move about anyway because of poor digital connectivity in our villages. The Treasury boasts that it has taken about threepence off the price of a litre of red diesel, but only until Christmas. This is a Government reduced to gimmickry. All these active harms visited on the rural economy are the result of the smug city dweller, for whom the countryside is somewhere to look down on and patronise: it is all rather provincial, you see. That is part of the problem. This Government misunderstand, underappreciate and malign the countryside; they should stop treating us as second-class citizens. Like the hopeless apprentice, Labour is not learning on the job, as there are other insults in the pipeline. To mask the manifest failure of housebuilding in the cities, Labour has increased housebuilding targets in rural districts by over 50% to unachievable levels—levels that have never been achieved before. The Social Housing Bill does nothing to promote social housing in rural areas of the sort championed by the noble Lord, Lord Cameron of Dillington. Under the land use framework, 1.7 million hectares of productive farmland—about 20%—will be removed from agriculture. At a typical £2,000 gross income per hectare, that represents a £3.4 billion annual hit to the rural economy—a sector that lost an estimated £800 million last year. The countryside is being made poorer and, if things carry on at this rate, there will be no money left to make it more attractive to the birds and the bees and the other species. The new SFI is meant to be more environmentally beneficial, with fewer actions, but with a paltry £240 million budget announced today, and capping, it prevents those with the most land from making the greatest environmental impact. Worse, at a time when there is hunger and a need for food security, there is a plan to introduce insane carbon taxes on fertiliser—the farmer’s largest expense. That will do nothing to reduce emissions yet will turbocharge food price inflation at a moment when the EU is racing to reduce the impact. Why are we running towards this danger with a scheme that is architecturally incompatible with that of the EU, and which has additional complications—free allowances, default values, and so forth? For a country that no longer produces ammonia, the raw ingredient for fertiliser, foreign suppliers are already concluding—I know this from personal experience—that we are becoming far too difficult to deal with. That imperils our food security, because fertiliser forms the foundation of our food chain. Then there is the problematic SPS deal, which will turn back the clock on precision breeding—which drives sustainability and productivity—and ban advances and innovations in black grass chemistry. Here is the rub: Labour is trying to have it both ways on the SPS. It wants dynamic alignment with the EU, without the agricultural support that EU policies require. That leaves British farmers in a worst-of-all-worlds situation: all the costs and none of the revenue. The EU has seen us coming, something the Government cannot see for themselves, and it will not rest until our best land is given up for solar schemes that destabilise the grid and generate no real income at all. There is no need for the little doers that keep the village stalls going—and to prove this point, yesterday we learned that Clarkson’s farm employs 150 people; converted to solar, it would employ nobody. Labour’s vandalism even goes as far as imposing metropolitan patterns on local councils, extending regional city councils to milk the surrounding parishes to pay off their historic debts. It is all quite a list. Today I can reveal for the first time another example of this Government’s indifference to the rural economy: in reopening the Ensus plant to produce CO₂ for our nation at a subsidy cost of £1 million a day, the first cargos of feedstock to power it were from France. The Government could not bring themselves to require that the wheat for that plant come from British farmers, who are on their knees. Given a free choice, this Government have subsidised French farmers to the extent of £1 million a day over our own. The irony is that none of this would have been necessary, had an unthinking Government not signed away our 1.4 billion litre a year bioethanol business in a trade deal with the US that collapsed grain prices on our shores. This debate reveals a landscape where there is no one in government who understands or is prepared to stand up and speak for those who can see green outside their windows; just chaotic departments all pulling in different directions. We have a Government who prefer dogma to delivery and are ignorant of the millions who live and work in the sticks, working long hours out in the rain and cold, boosting nature, cherishing our countryside, tending to our herds and crops and making Britain a green and pleasant land. Labour has simply abandoned the countryside, providing nothing in the gracious Speech. It is an omission that will come back to bite it.

My Lords, I am grateful to the noble Lord, Lord Fuller, for initiating this debate, but he would not expect me to agree with him on every point he has made. I remind the noble Lord that it was years of austerity that helped to undermine the money going to local councils that he regrets so much—and so do I. Rural Britain is not peripheral; it is central to who we are. It contributes hundreds of billions to our economy, and it is home to nearly one in five of our citizens. Labour has a proud history of championing our rural areas, from the Attlee Government’s National Parks and Access to the Countryside Act onwards. That was the bedrock of today’s tourism, which contributes to our rural economy. I live in the Forest of Dean, and always have done, where there are no Ubers and a flourishing pub. If we are to build a resilient and fair rural economy, we must move beyond rhetoric to a genuinely place-based long-term approach that treats rural communities not as recipients of policy but as partners in shaping it—farmers large and small, rural entrepreneurs, and local producers. The Government have rightly reaffirmed their commitment to rural-proofing, which is vital. It must be integral from the outset, influencing decisions on funding, service delivery and infrastructure. It must recognise that the rural economy includes culture and creativity. I met a wonderful rural entrepreneur this morning, James Grugeon, who lives in Suffolk. Among other things, he works with the Adnams brewery, which will be well known to the noble Lord, Lord Fuller. Their Great Get Together beer will be available in our bars from Monday to mark 10 years since the murder of Jo Cox. I am delighted that the English Devolution and Community Empowerment Act places a legal obligation on mayors and strategic authorities to actively consider the needs of rural communities when exercising their functions. This includes assessing impacts on land use, housing, local employment, health and well-being. I hope that others will follow the excellent example of the UK’s first protected, landscape-led natural health service, which is being piloted by North York Moors Trust as part of the Moving Forward campaign of David Skaith, Mayor of York and North Yorkshire. This will help to improve well-being, reduce loneliness and support people to get and stay active. Alan Milburn’s interim review tells of the chronic problem of youth unemployment—aspirations thwarted, opportunities lost and futures placed on hold. The land and nature sectors offer fantastic jobs but, too often, young people from urban and rural areas do not know of their potential choices. What are the Government doing to ensure greater awareness of these opportunities, empowering young people to stay in rural areas and have fulfilling careers? Horticulture makes an enormous contribution to our economy of around £40 billion. It plays a critical role in food security, environmental sustainability and human well-being, yet it remains underrecognised. Crops are essential, but so are our gardens, patios and window boxes, not to mention beautiful RHS gardens throughout the UK. This sector faces a chronic shortage of labour and skills at all levels. We need stronger education pathways and more degree-level study alongside high-quality apprenticeships that enable people to enter and thrive in the sector. The seasonal worker scheme remains essential. The Government’s extension of the scheme and recent reforms to introduce greater flexibility are important, but short-term visa decisions create uncertainty. A more predictable, rolling framework would provide the stability that growers and workers need. The countryside should be enjoyed by all citizens of our country, not just those of us who are fortunate to live there. I wonder whether any schemes have followed the Generation Green 2 Defra-funded initiative that connected tens of thousands of disadvantaged young people in England with nature. The access to nature Green Paper will be welcome. I recently met a beautiful brown hare while walking across my fields—well, I do not own them, but they are by my house. I am delighted that the Government are committed to the implementation of a closed season for hares. When will the shooting of these glorious creatures in the breeding season cease? Finally, I hope that the Minister will be able to tell us when the report of the rural task force will be published, likewise, the 25-year farming road map. The rural economy is about not only production, but about people, place and potential. It is about beauty and diversity. With the right long-term approach, it can and must thrive for the benefit of us all.

My Lords, it is a great honour to follow the noble Baroness, Lady Royall. I am a retired member of a farming family from Somerset producing food and milk with lettings to domestic and commercial tenants. The first thing to say about the rural economy is that it is not agriculture that makes it tick. Agriculture and forestry actually represent less than 4% of rural employment and rural GVA. Of course, if you add in the support industries and the food chain, it is considerably more, but then many of those businesses are urban-based. So, although the food industry as a whole is vital to the nation’s economy and, indeed, its survival, farming, as such, plays a lesser part in the rural economy than many people think. However, it should be said that farmers also create our wonderful countryside, which helps attract rural tourism, which adds another 4% to rural GVA and also over 12% of all rural employment. However, the rural economy is now incredibly diverse. There are more manufacturing businesses in rural England than in urban, not per head but per se. For example, in our converted farm buildings in Somerset, we have web designers, microchip manufacturers, school management services, vets, accountants, insurance brokers, hairdressers and even two padel courts. I suspect that we now have more people working on the farm than before the repeal of the Corn Laws in 1846. The rural economy is transformed and, certainly in the western half of England, many of our small farming families depend upon non-agricultural wages, which, when added to the family budget, help keep the farm solvent. In other words, the more diversified the rural economy, the better it is for agriculture. The biggest problem holding back the rural economy now is the unavailability of labour, and there are two main features of this: housing and transport. The unaffordability and unavailability of rural housing means that the next generation of working families has largely moved to our cities and towns. I am hoping that the Social Housing Bill will help create more affordable houses in our villages and market towns, but that is a very big subject that I do not have time to go into now. On transport, our rural young have a problem. How do you get to your first job 10 miles away at 7.30 am without a set of wheels, and how do you get a set of wheels without the wages from your first job? It is a Catch-22. The simple answer is that you lend the youngster a moped. There used to be hundreds of Wheels to Work schemes around England that did just that. The youngster was lent a moped free of charge and, after six months in work, had to give it back and get their own set of wheels. The scheme was funded by local authorities and the DWP. Then, as we all know, local authorities ran out of money and the urban-based DWP simply did not get that these schemes cost less per head than the social security benefits otherwise payable to these youngsters. Sadly, nearly all these Wheels to Work schemes have died. Transport problems do not affect only the young. I have had families explain to me that with the cost of rural childcare and the low local wages available, it does not make economic sense for them to buy a second car so that the second adult can go to work. As I say, unavailability of labour remains a serious impediment to rural growth. There are other problems for the growth of the rural economy. Most serious is the difficulty of accessing training, but there is also the poor connectivity of phones and broadband, higher energy costs and endless delays in planning. I say to our planners that our villages were made for work, rest and play. Remember the butcher, the baker and the candlestick maker. Villages have never been and should never be just dormitories. We are an enterprising lot in rural Britain. There are more rural businesses per head than in urban Britain. There is a far higher rate of self-employment. We tend to prefer getting up and trying rather than getting up and taking the dole. We will always survive, but we need support and help to fulfil our true potential.

My Lords, it is great to see my noble friend Lord Roborough back in his place just in time for this important debate. I congratulate my noble friend Lord Fuller on securing it. There is no doubt that the rural economy, just like most of the UK, is struggling. Unfortunately, some of that is due to recent changes in a variety of areas of employment, but I will not pretend that it has not always faced more challenges than are experienced by most people in this country. A few years ago, I was lead author on the policy paper Unleashing Rural Opportunity. Even then, I was challenging somewhat the Cabinet Office two-by-two matrix on how we determine median pay and employment. As soon as we took it down to a three-by-three matrix and started looking at district council level, it painted a very different picture from what Whitehall wanted to think was going on, which portrayed all of Wales and Cornwall as exceptionally poor. When you do the detailed work and analysis, it is not the same picture. Within counties, at a district council level, you see quite a difference. That is happening at not only a rural level but a coastal level. I am conscious that this continues to be a challenge. I appreciate that the Government may be trying to look into it but, unfortunately, as my noble friend Lord Fuller pointed out, there is a systematic degradation going on. It is not deliberate, but it is happening, even on small things such as proposed changes to drink-driving limits. The impact on hospitality in the countryside will be significant, yet there is no evidence to suggest that those sorts of accidents or links are there in the countryside. We have to keep reminding ourselves to think about the minority of people in this country—not necessarily in terms of the land they cover—and how policy driven by Westminster and Whitehall can have an impact. Plenty of noble Lords will be able to talk about farming or similar. I say to the noble Lord, Lord Cameron of Dillington, that Wheels to Work is definitely still going. It is now often run by charities, and DWP helps to pay for it. I will focus not on the farmers or farriers—all key industries in our agriculture—but the opportunities to which noble Lords have already referred. It is twofold, about colleges and childcare. More than half of young people cannot get to an FE college within half an hour. That starts to limit the options available to them and what sort of jobs they can do. I am conscious that we want to try to improve opportunities for young people through apprenticeships and the like. We need to keep focused on how we spend the increased amount on bursaries that was provided a few years ago and make sure it is focused on rural young people so that they can get to colleges to open up opportunities for them. It is important that we try to stop the drain of people moving away from the countryside to the cities and major towns by making sure they can get into work. The other challenge is about being in and staying in work, and that is to do with childcare. When I was in the Cabinet, I failed to persuade my own Government about how to deal with childcare. We regularly talk about 30 hours a week. That is based on 38 weeks a year. It is entirely around school terms. We have seen a significant drop in the number of childminders, which started under a Labour Government and continued under a Conservative Government, while the proposals put forward by the Government are about school-based nurseries and the focus on term time. A significant part of employment is connected to hospitality in the countryside and on the coast. When do people need flexible childcare? They need it during the summer holidays. I encourage the Minister to work with other government departments to look again, not just to see the rose-tinted view of what life is like in rural areas but to go a bit further into the detail to see why it is that the lowest-paid people and the lowest employment—not unemployment—are in the countryside, and to make changes to reverse that progression.

My Lords, I am delighted to follow the noble Baroness, Lady Coffey. I join her in saying how nice it is to be sitting just behind the noble Lord, Lord Roborough, whose return to the House is, I am sure, welcomed by everybody. I have a great interest in the subject, having been a bulb grower before I came to this place 20 years ago last Friday. It does not seem long, but it is actually quite a large portion of my life. I am a Holbeachean by name now, and by birth, and I live there. The business in which I was involved is a family business, founded by my grandfather who originally had a 10-acre ex-serviceman’s smallholding after the First World War. He was able to build it up, and I hope I played my part in the system too. Since I became a Minister I have ceased to have any interest so, as a declaration of interests, I am interested in the subject but I have no pecuniary interest in the industry. I do not know whether any noble Lords read last week’s Sunday Times special supplement on the fastest-growing private companies. It was really quite interesting. I do not think any of us would have been surprised to discover that out of the top 100, 45 were in Greater London and a huge proportion of the remainder were in the south-east and the areas around London. In the east Midlands, where I live, there were three. In the north-east there was one. In the whole of Scotland there were two, and there were four in Wales. These are privately owned companies which, as everybody here will know, are often the most dynamic elements of the economy. It is illustrative of the focus on urban matters, which tends to dominate economic thinking and everything else. I am delighted that my noble friend Lord Fuller has tabled this Motion. He has been an exemplar of the dynamic, “go for it” entrepreneurialism that is essential in a rural environment. He has also been a key figure in rural local governance, which is an important part of the lives of people who live in the countryside. I was trying to think of where I should start on this. I did not want to be totally negative, but it is creeping up to nearly two years since we had that disastrous Budget. It was a disastrous start for the Government, particularly their policy in connection with inheritance tax. I remember asking the noble Lord, Lord Livermore, a key Treasury figure, how we could expect investment following the farms and business inheritance tax, and what was the chance of growth. I shared with him a view of growth being the key factor. Before long, as other noble Lords have pointed out, employers whose staff had to travel distances to work were faced with a jobs tax. No wonder we have a rising number of young people who are NEETs, as we call them. However, I do not want to make my contribution to this debate an anti-government contribution, because farming and rural areas need to feel the Government are with them. We should aim for efficiency and productivity. We may never be self-sufficient in food, but we should see rural England as a resource to be exploited to satisfy the consumer and the retail sector, and the enormous number of people engaged in the processing, packing and distribution of farm goods. The food valley stretching from Grimsby to Peterborough is a major centre for this activity. I close by saying that I am concerned about SPS dynamic alignment. I was at the briefing, and the noble Lord replying to this debate was there as well. I hope he can reassure those of us who are concerned about the consequences and that it may lead to greater regulation. We are in business to grow and produce food, not to fill in forms.

My Lords, it is a great pleasure to follow my noble friend Lord Taylor of Holbeach, whose knowledge in this area, as we heard, is very considerable. I also declare my farming interests as set out in the register. So often, Labour Governments present themselves as friends and champions of the rural economy. But as we are seeing very visibly with this Government, the reality is somewhat different. Our rural way of life is being constantly eroded by the views of the urban majority, and our farming infrastructure and ability to grow food dismantled by ill thought-through policy and taxation. I mean no disrespect to the Minister, but one of the key reasons for this, which I have mentioned before in the House, is that Defra simply has no one on its senior management or ministerial team who has any real-world farming knowledge, or farms on sufficient scale to understand the impact of this Government’s legislation. As a result, Defra Ministers and civil servants rely on very questionable advice from arm’s-length bodies such as Natural England, which are themselves populated by quasi-academics with their own ideological agenda, who have little or no understanding of how our rural communities work and often display a breathtaking level of political overreach. This translates across into Labour rural policy. Conceptually, the inverse would be like asking the senior management team of the National Farmers’ Union to run the Treasury—although some might argue that is not such a bad idea. Seriously, protecting food security, growing the rural economy and maintaining the social fabric of the British countryside requires much more than just ideological theories and political slogans. It requires real, practical, effective and consistent policies that balance economic development, food security and conservation with the more nuanced elements of rural life.