It is an absolute pleasure to serve under your guidance, Mr Twigg.
For what it is worth, had we gone for a closure motion I would have voted with my Opposition colleagues. There should have been an impact assessment. However, it is worth bearing in mind that many times during the last Parliament—I could comb through Hansard to check the exact number, but it is in double figures— I asked the previous Farming Minister for an impact assessment of, for example, the reduction of the basic payment scheme and the failure to introduce the transitional changes in a timely fashion, and answer came there none.
I can inform the Committee that livestock farmers were 44% worse off in terms of income at the end of 2024 compared with 2019. The Conservative spokesman, the hon. Member for Keighley and Ilkley, can visit as many farmers as he likes, and I hope the Minister also visits many farmers, but every last one of them will be poorer because of the actions of the last Conservative Government. It is important to have that on the record.
The reality is that all parties in this place, certainly the ones represented on the Committee today, signed up to ELMS and the principle of public money for public goods. That is a good principle, but the transition has been marked by two clear things: imprecise timing of the reduction of the old scheme and the old money, and the failure to get people into the new schemes. Of course that is also the case under this Government, but we had the same conversations with the former Farming Minister, Mark Spencer, and he said the exact opposite of what the Conservative spokesman has said today.
The failure of the transition between 2019 and 2024 led to a £200 million underspend. The Government are always talking about £5 billion over two years. My maths is not brilliant, but I reckon that is £2.5 billion a year, which is £100 million more than before. That is a good thing, because we worried ahead of the Budget last autumn that the new Labour Government would bake in the consequences of the underspend and the Tories’ incompetence, but they did not do that. However, it is right that Opposition Members have mentioned on more than one occasion that freezing the budget at £2.4 billion, which is what it was at the point we left the EU in early 2020, is hardly a great achievement.
Of course, there was inflation through all the years of the Conservative Government. If they were serious about the transition being funded properly, the budget would have been more than £2.4 billion when the Labour Government came into power. Inflation has been huge over those five years, especially in the farming industry when it comes to feed costs, fertiliser, fuel, energy and so many other things. The industry barely washes its face, so we are left in this situation.
I do not buy the Conservative party’s references, either before or since, to today's financial statement being an emergency Budget. If it had been an emergency Budget, it would have said something. The Chancellor could have had the day off, bless her, because it contained very little. One of the few things in the statement of any potential impact was the day-to-day budget savings for various departments, including DEFRA. I reckon it is about £200 million from a budget of which ELM makes up 40% or 45%. A pro-rata cut in day-to-day spending means we would potentially see the £2.5 billion shaved. It would be good to hear from the Minister whether that will be the case.
One of the real problems with the transition, and the reason I am angry about the situation in which we find ourselves—on behalf of the farmers I represent in Westmorland and Lonsdale, and across the United Kingdom, and especially the farmers in England who are specifically affected—is that entry to the new schemes has been crudely marked by larger landowners, corporates and those with the wherewithal either to have land agents or to allow farmers time off to negotiate with Natural England, the Rural Payments Agency and DEFRA. Those people are inside the schemes; the typical farmer outside the scheme is, for example, a hill farmer in Westmorland, working 90 hours a week, either on their own or with no family members working on the farm. They cannot afford a land agent and are utterly isolated, feeling beleaguered. They are the ones outside the various environmental schemes, particularly SFI.
When the drawbridge was pulled up, for the time being, on SFI, we worked out that there were 6,100 entrants to the scheme. Of those, a grand total of 40 were from severely disadvantaged areas, particularly the uplands. That gives a snapshot of who is in and who is not. When the Minister defended the Government’s decision on the SFI closure a few weeks ago, he made some points that were right, but with the wrong conclusions. He said, of course, that SFI was “first come, first served”. The big landowners were therefore typically on the inside and the smaller businesses were on the outside, but that is not a good reason to pull up the drawbridge, just at the point that these smaller farmers were about to cross the moat and enter the castle, so to speak.
According to DEFRA’s own figures, the consequence of all this is that, as things stand, by the end of the transition in two years’ time, the average farmer in a severely disadvantaged area will be on 55% of the minimum wage. That is an absolute outrage. By the way, owner-occupiers in my neck of the woods could also be sitting on an asset that is technically worth £2 million or £3 million, so they will be clobbered by the family farm tax as well. Those people on half the minimum wage, earning £12,000 or £13,000, will have to pay 20 grand a year in inheritance tax. Come off it! That is not fair.
The consequence is that those people will have to sell up. Where will that farm go? Will the neighbouring family buy it? No, of course not, because they are in the same pickle. Instead, it will be sold to a corporate that probably does not produce any food whatsoever. That ought to make Labour Members feel deeply uncomfortable. What a lack of social justice that implies.
My concern is that we are now being asked to vote for the hastening of something that is already doing huge damage to the sector. A 76% cut to the basic payment in one fell swoop will be crippling for many farmers, particularly those who are not yet inside the other agri-environment schemes, particularly SFI. I worry about tenant farmers in my constituency and around the country. That money was probably paying the rent this year.
Both this Government and the previous Government accepted the recommendations of Baroness Rock’s excellent review, yet neither implemented them. To do all of this and put tenants, in particular, in a moment of extreme fragility and vulnerability before the Rock review could protect them was doing it the wrong way around. That is why the reduction to the BPS should have been parked until the Rock review’s recommendations were in practice, so that tenant farmers could be protected. In parts of my community, I am seeing something akin to a lakeland clearance. People who have farmed the valleys, the lakes and the dales for generations are being forced off because of both Governments’ failure to plan ahead.
I agree with the NFU, which clearly has the same sources as me, that there will be a £400 million shortfall and underspend based on what we know about the 76% cut to the BPS and the failure to roll out the agri-environmental schemes more comprehensively. All that builds a deeply troubling picture.
A few weeks ago DEFRA officials appeared before the EFRA Committee, chaired by my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael). On behalf of the Department, they proudly said that they reckon 92% to 93% of farms will survive this process—I beg your pardon? That means DEFRA appears to be counting on 7% to 8% of farms not surviving. I know the kinds of places where they will not survive: places like the lakes and the dales, which is outrageous.
This all boils down to a deep injustice, but it is foolish as well. At a time when the UK is in a very dicey situation internationally, for us to do anything that undermines our food security is incredibly stupid, as well as unjust. The consequences of this move will cause, and are causing, huge hardship. It is worth saying that people who will suffer the most are the people of the uplands and SDAs. It seems to me that Britain’s poorest farmers, in Britain’s prettiest places, are the ones who will take the hit.
That will have consequences for our ability to feed ourselves. We produce only 55% of the food we eat in this country, which is nowhere near enough, and it needs to be at least 20 percentage points higher. Farmers care for our environment and our landscape. The Lake district’s world heritage site status could be at risk if we do not care for it properly.
I am also seeing the consequences of a lack of trust in the Government’s transition—both this Government and the previous Government—which is leading farmers to take the exact opposite decision to the one the Government want. Just a week and a half ago, when I spoke to a group of farmers from Penrith and elsewhere in Cumbria, the overwhelming sense was of anger and, more than that, disillusionment with the whole system.
What will those farmers do? They will opt out of environmental schemes altogether. They will think, “Do you know what? Perhaps I will pay the rent more easily if I quadruple my livestock, even if I undo all the good work that my mum and dad, and their parents before them, did on environmental issues for decades.” That is all because they have lost trust in the system.
As other Members have rightly mentioned, all of this has a huge impact on the wellbeing and mental health of these folks. Typically, and certainly in my area, farmers are one-person bands farming in isolated scenarios, and they are the fifth, sixth or seventh generation to have farmed that valley and that community. They find themselves staring down the barrel of being the one who loses the family farm. It is not their fault, but they will believe it is. Do you know what that will do to people in those extreme circumstances?
I will also vote against the motion for all the reasons that have been set out. There is a way forward for farmers, if this Government take food security seriously and seek to deliver public money for public goods, as was promised at the beginning of this process.