I want to start by addressing the current year, because the current year is always at the top of farmers’ minds. As the shadow Secretary of State,
It is also true that in recent years a number of global events have led to volatility. In common with many other business sectors, farmers have sometimes found it difficult to plan and budget properly because of volatility in their input costs, although over the past 12 months some sectors have seen commodity prices ease back from the very high levels recorded in recent years. That is particularly pronounced in some areas of cereal production, such as winter wheat.
While acknowledging that it has been a difficult year for farmers and that that is at the top of their minds, it is important to take a step back and look at the wider context and a longer timeframe. DEFRA constantly monitors farm business incomes. Every year, it publishes the “Farm Business Survey”. As the Minister will know, a whole statistics department in DEFRA spends its time understanding global agricultural commodity markets—what is driving prices up or down—and their impact on UK farm enterprises. In recent years, we have to acknowledge that farm incomes have actually risen sharply overall since 2016.
Throughout history, farmgate prices have always been heavily influenced by exchange rates. The sharp devaluation of sterling against the euro after the 2016 referendum result—literally within seconds of it becoming apparent what was likely to happen that evening—meant that anybody who was in a productive sector, whether primary industry or manufacturing, benefited from a slightly softer exchange rate. People who make and produce things tend to do better when there is a weaker exchange rate against the euro and the dollar, and people who import things, or who are in the financial services sector, tend to prefer a stronger exchange rate. Because of that exchange rate change, between 2016 and 2022 profits on the average dairy farm more than doubled to over £200,000 last year. That is more than four times higher than the average dairy farm was getting in 2015 when dairy prices really were on the floor and struggling. It is also true that turbulence following the terrible invasion of Ukraine has led to sharp increases in global cereal prices. For the average cereal farm, gross profit margins per hectare actually trebled in the few years after 2022, although, as I have already acknowledged and for any angry cereal farmers listening, cereal prices have fallen sharply in the current year.
I recognise that it has not been a universally positive picture. Overall, farm incomes were healthy from 2016 to 2022, but the pig sector in particular suffered difficulties in 2021, caused by oversupply in the EU market and problems in the Chinese export market. Our apple industry suffers a long-standing problem of a seeming inability to break through in export markets, leaving an industry which requires investment over many years, if not decades, at the mercy of all-too-powerful retail customers. The potato industry has suffered several years in the doldrums, partly owing to changing consumer tastes and a reduction in demand for potatoes. In the grazing livestock sectors—not just in the more vulnerable upland landscapes, but in lowland areas, too—profits have typically moved sideways; they are not really increasing, and in some years are dipping slightly.
The overall picture for agriculture since 2016 is positive, and it is important to recognise that. Farmers will not always volunteer the fact that they have had a good year, but it is important for those of us in the House who are interested in coherent policymaking at least to understand the data and the statistics, which is why I was so pleased when the Minister for Food, Farming and Fisheries published the data and the trends late last year.
I want to say a little about the agricultural policy that the Government are pursuing. Most of its key tenets were developed between 2017 and 2019, when I was the Minister of State responsible for agriculture, and implemented between 2020 and 2023, when I was the Secretary of State for Environment, Food and Rural Affairs. We applied a number of principles to that policy, as we had a once-in-a-generation opportunity to rethink farming policy from first principles. The first principle was that there was no long-term place for land subsidies.
The single farm payment, area payments, direct payments —whatever we wish to call them—were essentially a subsidy paid to people for owning land. There was no coherence in such a policy, simply because there had never been any shortage of people in this country wanting to buy land, so it made no sense to add a subsidy to it. There is also a great deal of evidence that when that subsidy payment was introduced in 2005, about 50% of it went in inflated rents, so all that happened was that the ultimate owners of the land benefited most. That is why we ended up with the problem that 50% of the entire agriculture budget went to 10% of the wealthiest landowners in the country, while 44,000 farmers—more than half the cohort claiming direct payments—had just 10% of the total between them.
That made no sense, so we introduced a second principle. We decided that as well as paying farmers for what they did, rather than just paying them for happening to own land, we should allow them a profit margin from what we ask them to do. We made a deliberate decision to depart from the backward “income forgone” methodology that was pursued by the European Union and is sometimes advocated by the World Trade Organisation. As we try to modernise farm policy, we must reject some of the anachronistic approaches supported by the WTO, because they have no place in modern policy. If we are going to ask farmers to give up a land subsidy in exchange for being paid for what they do, we should not begrudge them a margin for what they do. There has to be a profit margin; that is the quid pro quo for the removal of anachronistic land subsidies.
We recognised that there was poor profitability in some farming sectors, and that in some areas there was a dependence on the subsidies received, but the third principle that we brought to the design of the policy was that we should try to address the cause of that poor profitability, rather than simply treating the symptoms. That is why, in the Agriculture Act 2020, we legislated for new powers to introduce fairness in the supply chain, and it is why in the years since then there has been a significant expansion in grants to help farmers invest in their businesses, reduce costs and improve their profitability. It is also why we ensured that the schemes we designed, such as the sustainable farming incentive, not only helped the environment, but increased and improved farms’ financial resilience. There is considerable evidence that in some landscapes, a more extensive approach, in which farming has fewer inputs but a higher profit margin, can lead to overall improvement in the profitability and long-term financial resilience of enterprises.
The fourth principle, which I was very keen to bring to the policy, was that there should be simplicity in the new schemes. Others have commented that we did not take that far enough, and I am open to representations on that, but achieving that is not easy, because the environment is complex. Whenever we try to design a scheme that delivers for the environment, it will always be limited by the extent of human understanding, and the ability to make payments that we can track; we have to be able to validate the fact that they have been delivered. That is not straightforward, as I discovered when I got into this issue.
I campaigned to leave the European Union. I was very hostile to the cross-compliance regime and the way that the EU approached these matters, and I was very keen to ensure simplicity. My message to officials is that when we design policy, if we encounter a dilemma or a difficulty, we should always tack towards simplicity, and accept that although the policy might not be perfect, we need something that works. To be fair to officials, they have generally done that; and to be fair to Ministers, they have maintained that basic principle.
The final principle was that there should be evolution, not revolution. That is why, way back in 2018, when I first tried to take an Agriculture Bill through Parliament— it did not complete its passage, and we had to have a second attempt in the Parliament that followed the 2019 general election—we made it explicit, right from the beginning, that there would be a seven-year transition between 2021 and 2028, and that we would gradually reduce the legacy basic payment scheme land subsidies and expand the roll-out of the new policies. It is sometimes said that there has not been a plan, or that things have not happened as fast as they should have, but all such representations are complete and utter nonsense. We published a document in 2019 that set out the seven-year transition plan, and I pay tribute to all my successors, because every single one of them has continued to roll out the policy programme exactly as we set out in 2019. Indeed, late last year, the Government confirmed that this year, they would de-link the remaining legacy payments from the need to have tenure over land, which is exactly what we planned as long ago as 2019. Every component of the new agriculture policy, from the sustainable farming incentive to the landscape recovery project, has been rolled out exactly as we intended.
I pay tribute to the many officials in the Department for Environment, Food and Rural Affairs who have maintained the trajectory that we outlined in 2019, particularly Janet Hughes, who has led the team in question for a number of years. Having that continuity on the policy programme has been helpful. I also pay tribute to Tim Mordan, a long-standing official in DEFRA who has helped Ministers from different parties over many years, and who I understand will soon be retiring from the Department.
I want to say a little about the challenges that remain; I will wind up soon. When it comes to agriculture, I am afraid to say that most of the challenges that DEFRA faces are from other Government Departments. The first of those is the Home Office. When I was Secretary of State, we put in place the Shropshire review, which concluded that we needed not only a multi-annual visa scheme for seasonal workers in the agriculture sector, but a more progressive approach to having a visa scheme for sectors such as food manufacturing. I regret to say that there has not yet been a response to the Shropshire review. I place no blame at the feet of DEFRA Ministers, because I was a Minister in DEFRA and I know how these things work. Ministers will not be able to say so, but it is pretty obvious that, as usual, the Home Office is the intransigent blockage in this problem. We really need a machinery-of-government change in which the Home Office is stripped of its powers relating to visa policy for seasonal agricultural workers. The policy in its entirety should simply be moved to DEFRA, so that DEFRA Ministers no longer have to waste their time trying to explain things to Home Office Ministers; that is often where the problem lies.
A number of hon. Members have mentioned trade. I would simply say to Ministers that DEFRA understands trade and some of the technical issues around it far better than officials in the Department for Business and Trade. DEFRA Ministers are armed with real intellectual power, and real experience of dealing with trade negotiations. I hope that current and aspiring Ministers in this place will always draw on the power in DEFRA to face down some of the more naive approaches that we have seen in the past from the Department for Business and Trade.
We must also keep payment rates under review. I increased the payment rates for the sustainable farming incentive and countryside stewardship scheme by about 30% in my final year in the role. Ministers recently increased the rates by a further 10%, and it may be that we need to consider going further as we depart from the anachronistic “income forgone” methodology.
A number of hon. Members mentioned land use, and the shadow Secretary of State, the hon. Member for Croydon North, mentioned the land use framework. I am more optimistic about our ability to both increase agricultural output and make space in our farmed landscape for nature, because we have done the research and we know that there is no direct correlation between food production and the land area used. Some 35% of our agricultural output comes from just 4% of the land, because sectors such as pigs, poultry and horticulture have high-value outputs but do not use a huge amount of land. At the other end of the scale, around 20% of farm land in England produces just 3% or 4% of our total output. It is pretty obvious that we can make space for nature, do some tree planting and restore vulnerable habitats such as peatland, but also invest in new horticulture, glasshouses and crops to expand our domestic food production and enhance our food security.
I regret that the Government decided last year to drop the horticulture strategy. They have reinstated elements of it, which is to be welcomed, but the reason why we committed to a new focus on horticulture—in particular, a new generation of glasshouses for our food production—was this. In my nine years in DEFRA, I spent a lot of time in Cobra meetings dealing with the latest crisis, whether it was a ferry strike in France, covid or preparing for a no-deal Brexit. The issue always came down to how we would get lettuces and tomatoes from Spain into this country through the short straits. If we really want to enhance our food security, we should have a renewed focus on horticulture and try to re-shore some of the glasshouse production that was wrongly exported to the Netherlands when we joined the European Union all those decades ago.
Finally, I would like more done to support new entrants and tenant farmers. The Rock review was an excellent piece of work with many different recommendations, but if there is one recommendation that I hope the Government will consider taking forward, it is the idea of an assignable agreement on countryside stewardship, so that if somebody enters land tenure for two or three years, they can assign their agreement to an incoming tenant, or indeed the landowner. That is the only solution I can see to that problem.
]]>I rise to speak to new clause 68, which is based on a specific challenge that I have encountered in my constituency and that affects residents in more than 70 homes spread across three locations in the town of Hayle and the village of Mount Hawke. The experience of those cases exposes a potential gap in the Bill and in policy on the issue of shared ownership. The Bill deals at some length with standard leasehold agreements and the problems of extortionate ground rents, as well as with some of the issues around service charges and management companies with which we are familiar. However, in the early 2000s some agreements were put together that were technically leasehold agreements but that masqueraded as shared ownership agreements, even though those shared ownership agreements do not comply with the standards of modern shared ownership agreements.
The agreements I have encountered contain a number of defects, and I would like the Minister’s view on them. The first is that the freehold on those homes is not held by a registered provider. It was initially owned by the developer who built the sites, but it has changed hands twice. In a way that is familiar to many Members, the freehold has ended up in the hands of an offshore investment vehicle based in the British Virgin Islands, and with a company called Rockwell, which has not been easy for residents to deal with over the years.
The second major defect in the agreements is that there is no provision for staircasing or enfranchisement of the leaseholder’s share of the property. Residents typically own between 58% and 72% of their property, but their stake is fixed and cannot be extended. There is no right to extend under the agreement. The agreements are under a 990-year lease and there is no ability to extend that, although I appreciate it is a long-term lease.
The third defect is that even if residents could enfranchise and extend or staircase their ownership within the agreement, a section 106 covenant means that the properties must be sold to a local connection with a significant discount on market value. The way that has been worded in the agreement means that it is simply not worth the while of residents to increase their share, since there would be no value to the increased share that they would have.
Finally, there was something described as ground rent, although in practice a big chunk of that was effectively a rent on the shared ownership portion. The ground rent was initially around £20 per week, but that was linked to the retail price index on an escalating model. It has now got close to £2,000 per year for those residents, and it is still increasing rapidly.
All of those defects in that leasehold tenure arrangement or shared ownership arrangement—indeed, it appears to be neither one nor the other—mean that all of the properties have been judged unmortgageable by lenders, and that means the residents are trapped. They cannot sell their properties because no one can get a mortgage to buy them. These are people in my constituency who had a local connection. Typically, they are on modest incomes. These agreements and these homes were sold to them as a way to get a foot on the housing ladder, and for those residents it has transpired to be a complete nightmare.
I will say a word about planning and pay tribute to Penwith District Council, as it was then, and Cornwall Council. Planning was granted between 2004 and 2006, and the local planning authorities did their due diligence. They could see that this shared ownership model was defective, and they refused planning permission on all three sites on that basis. The Minister might ask how these homes were then built and sold under the arrangement, but I suspect he can predict the answer, which is that they were approved at appeal by the Planning Inspectorate, an agency within his own Department. The situation that my constituents face has been caused principally by a chronic failure of due diligence by the Planning Inspectorate, as is often the case with such issues.
In conclusion, my new clause 68 seeks to address a gap in the Bill and to give the Government the opportunity to atone for the mistakes of the Planning Inspectorate. It deals explicitly with shared ownership agreements and would create a statutory right to staircase ownership and put a cap on the rent of the freeholders’ portion of the home. I do not intend to press new clause 28 to a Division this evening, but I hope that the Government will consider the matter closely. I would like to meet the Minister or the Secretary of State and share with them and their officials a copy of the shared ownership agreement that my constituents are suffering under so much, with a view to seeing whether the Government might consider further changes at later stages of the Bill’s consideration to address a gap in it. Given that the Planning Inspectorate has been somewhat culpable in creating this problem for my constituents, I hope that the Government will seek to do that.
I support the general thrust of the Bill in all its attempts to deal with management charges, service charges and ground rents, but I hope that the Minister will agree to meet me to discuss some of these remaining issues.
]]>I want to explain why we have this problem. Three types of licence are needed to carry out these scientific procedures. An individual has to have a licence, and there is a licence on the establishment, which is fairly uncontroversial. The difficulty comes with the project licences. Universities and research institutions have internal animal welfare and ethics boards, which assess applications before they go to the Home Office. But how hard do they challenge requests from academics working in their institutions? Perhaps they occasionally ask a few questions and challenge a bit, but it appears that they, effectively, defer to the judgment of the academics who put in the requests, and the academics then agree. The ethics board agrees to the application, which is then submitted to the Home Office.
Let us bear in mind that the team in the Home Office have to process around 4,000 project licences a year. They are overworked and stretched. They will see that an ethics board, with professors and people with “Dr” in front of their names, has assessed that the project is necessary. They will defer to the scientific knowledge of those boards—and perhaps wrongly so. Although scientists are qualified to give good technical analysis, they are not, by and large, qualified to make good decisions, least of all when it comes to decisions relating to policies underpinned by laws made in this House. Only the civil service, backed up by Ministers, can make those kinds of decisions.
I suspect that there is, in the Home Office, a large degree of deference, which is possibly misplaced, to those animal welfare and ethics boards. That is why the Home Office almost never refuses a licence. I understand that, in response to parliamentary questions on this issue, Home Office Ministers will say, “You cannot really judge the fact that we have not refused a licence as evidence that we are not applying ourselves with voracity to this task, because we will often question things and send applications back for further consideration.” I completely understand that, and it is a fair point, but we have over 4,000 project applications a year. Are we really saying that the Home Office might not judge it appropriate to refuse even one in order to create some boundaries and parameters and to inject some vigour and rigour into the system?
A further cultural problem stems from the MHRA, which regulates medicinal and pharmaceutical products in the UK. Although it has confirmed that it does not require animal testing, and that it is open to individual companies and research establishments to decide what type of research they need, a perception exists within industry and academia that experiments carried out using live animals have greater credibility and acceptability. A clear statement from the MHRA that it is not neutral or indifferent, but will take a dim view of products brought before it that have used animal experiments when they might not have been necessary, would sharpen the process and focus minds as to the need for using animal experiments.
How can we get to a position in which the three Rs are being applied as the original Act intended? One of the petitions calls for more funding for non-animal methods. In the UK, we are blessed with some of the world’s best researchers in this area. The Blizard Institute at Queen Mary University of London, which I visited a few months ago, hosts an animal replacement centre of excellence. It is doing some extraordinary work on organ-on-chip and bioprinting. In dermatological research in particular, there is now no doubt that such non-animal methods are far superior to using live animals.
I have a probing proposal for the Minister. As a way to raise money, sharpen the incentives in the current system and get the three Rs enforced, I propose that we consider applying a levy on the use of each individual animal in testing, as part of the project licence. In some ways, it feels quite incongruous to have to put a monetary value on the life of a mouse to get people to take it seriously, but if researchers are not taking the intrinsic value of that mouse’s life as seriously as they should, let us consider some other incentives that might reinforce the original three Rs. Let us consider applying a project licence levy of £100 or £200 for each mouse used, and see whether that focuses minds on the animal welfare and ethics committees. Let us see if it makes them think twice before saying that they need 100 mice for something when they could do it with less. We should consider something like that. The other advantage of a levy is that we could ringfence all its proceeds and put them directly into research on non-animal methods. That is my suggestion to the Minister.
I was a Minister myself for nine years, and I know that it is very easy for people to call for more money for things, but it is not straightforward to be the Minister who has to go to the Treasury and say, “By the way, we’d like just a little bit more money for this one thing that is quite important.” Traditionally, 20 years ago, the Treasury did not like levies and saw them as a hypothecated tax, but we are in different territory post the financial crisis and the many other problems since then. I am sure that if the Minister went to the Treasury and said that he was going to apply a levy of £200 per mouse used in experiments, the faces in the Treasury would light up. They would see the potential to do something useful with that.
Finally, where should responsibility reside for the 1986 Act and the policy under it? I know that that discussion is ongoing within the Government. My view is that the Home Office is a very busy Department and has a huge amount to contend with, and it is very unlikely that its Ministers would be able to give this issue the attention that it deserves. The right thing would be to make a machinery-of-government change transferring full responsibility for animal testing, the 1986 Act and the regulatory regime under it to DEFRA, which has the vets, the scientists and people who would approach this issue as an animal welfare issue. Equally, it has people who understand the importance of science. As our vets have proven on multiple occasions, they are not squeamish about these matters: they will take difficult decisions if need be. Most importantly of all, if the policy were within DEFRA, veterinary science could challenge medical science. Often, we find in veterinary science a better understanding of vaccinations, epidemiology and medicines, with a body of technical expertise that can challenge the medical expertise sitting in other Departments. That is why I think that such a machinery-of-government change should take place.
I hope that the Minister will look favourably on some of those suggestions. I appreciate that it is very unlikely that he could bring forward a levy that might sharpen the implementation of the three Rs between now and the general election, but all parties will be able to think about these issues as they draft their manifestos for the general election ahead.
]]>In the UK, we have a degree of ambiguity. The Medicines and Healthcare products Regulatory Agency does not explicitly require animal testing, but there is a degree of ambiguity because it is equally cautious about saying that there should not be animal testing. I will come on to that later.
In debates such as this we should always give credit where credit is due, and it is important to note that the Government effectively banned the use of animal testing in the development of cosmetics in 2023, or at least made it clear that there would be no new licences for such activities. That followed the huge progress made by companies such as Unilever and others to phase out the need for animal testing on their products. However, the greatest concern for me is that despite exponential growth in non-animal methods and huge leaps in that technology over 20 years—with the development, for instance, of organ-on-chip technology and bioprinting—the number of animals used in animal tests remains stubbornly high, at around 4 million per year, principally mice.
The 1986 Act is deficient in some minor but quite obvious ways. When it was originally drafted, it simply covered invertebrates, which was consistent with the animal welfare legislation we had at the time. In 2012, the coalition Government decided to add cephalopods to the legislation—for those not familiar with that terminology, it essentially means species from the octopus family—but they did not add decapods. As the Minister will know, the recent Animal Welfare (Sentience) Act 2022 now recognises both cephalopods and decapods as being sentient species. At the very least, therefore, we should bring the 1986 Act into line with our current animal welfare legislation, which would require the addition of decapods as protected species.
My more important concern is that if the three Rs had been applied correctly, given the exponential growth in technology that we have seen in the last 20 years, we would have expected to see a correlation and a sharp reduction in the number of animals being used, as the replacement principle was applied. Instead, over the last 20 years the number has really drifted along sideways. I appreciate that it has dipped at times, but it is telling that in the first year of lockdown, when the number of animals being tested fell quite significantly, it was said that it had fallen to the lowest level since 2004. That is quite damning in itself, because if an anomaly year, when the amount of testing was at an all-time low, meant that the level had still got back only to the level it was at in 2004, that suggests that something is going wrong and that the application of the three Rs is not having the effect originally intended by the 1986 Act.
I am afraid that it is hard to avoid the conclusion that what started out in 1986 as a robust regime—perhaps the most robust regime in the world—has probably drifted and coalesced into a rather unsatisfactory system of self-regulation. We have to ask ourselves why those three Rs principles are not being effectively applied. Ultimately, I think it is because everybody defers to process but no one really takes proper ownership. We have ended up with cultural attitudes around the use of animals in scientific procedures that masquerade as science, when actually the science does not require those animals to be used in such numbers at all.
]]>Clause, by leave, withdrawn.
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