Farming in the Uplands - ARCHIVE: Defra

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Ev 84 Environment, Food and Rural Affairs Committee: Evidence The Coalition Agreement says we will publish and present to Parliament a simple and consolidated national planning framework covering all forms of development. We will make an announcement on how we propose to take forward the national planning framework and the implications for specific areas of planning policy. This will include planning for housing policy. There is no specific funding allocated to promote “Home on the Farm”, either in terms of grants or for publicity (as the latter will fall within the Department’s normal business). Local authorities may wish to oVer incentives to farmers to carry out conversions to provide aVordable homes for local people. The split between rural and urban interests in the LEPs that were announced in October; how Defra will in future be ensuring that LEPs have an equitable balance of urban and rural interests; and also on the accessibility of the Regional Growth Fund to uplands enterprises In addition to the question above, you also requested more detailed information on LEPS. On 29 June 2010, the Secretaries of State for Business, Innovation and Skills and for Communities and Local Government invited business and civic leaders to come forward with proposals for joint partnerships which would be based around a functional economic geography and which would provide the strategic vision for economic growth within that area. It was for local areas to decide whether they wanted to form a LEP, there was no prescription from Government. 24 LEPs were announced at the end of October. Some of these cover predominantly rural areas (including uplands areas), while others are naturally urban-centric based on established partnerships around cities. Others still, have urban areas with rural hinterlands with close economic relationships with the urban centres. I enclose a map showing the extent of these 24 LEPs. Regarding the areas not currently covered by a LEP, these 24 were only the first tranche of LEPs to be announced. Some 60 expressions of interest to form LEPs were initially received but not all of these fully met the criteria. Suggestions for improvement have been fed back to any prospective partnership and they have been invited to resubmit their proposal once any issues have been addressed. If the revised proposal meets the Government’s expectations then they will become a LEP. Thus areas of the country, including rural areas, not currently part of a LEP could potentially be part of one in the future. LEPs are developing their own strategy for growth depending on local needs. They will determine their own priorities, including whether they pursue rural and/or uplands interests. However, the White Paper Local Growth: Realising Every Place’s Potential published in October, which provides the policy context for LEPs, quite clearly flags the importance of recognising the “characteristics of the rural economy and its contribution to national growth.” With regard to the specific enquiry about accessibility of the Regional Growth Fund (RGF) to upland enterprises, an organisation or an area is not necessarily disadvantaged by not being in a LEP as RGF bids are not restricted to LEPs. Bids can also be made by private bodies, public-private partnerships (not exclusively LEPs) and by social enterprises. The advantage that a LEP might bring is a more strategic view of the needs of the local economy and an overarching body to bring together packages of smaller bids. Where there is no LEP, areas or organisations may need to think instead about how they can work collaboratively and innovatively with neighbouring places, other organisations and private sector partners. You may wish to be aware of some other background to the RGF. The fund’s objectives are to stimulate enterprise for the transition to sustainable private sector-led growth and to support areas and communities currently dependent on the public sector. The RGF is £1.4 billion over three years and has a threshold of £1 million for bids—this can be either for individual projects or strategic packages of projects, or strategic investment programmes. The fund is therefore available to a wide range of bids in a wide range of areas, and allows for bids for smaller projects, particularly through the “Programme“ option which is designed for small proposals which will together work toward a strategy for economic growth. The fund has been open to bids since 28 October 2010. In addition to the core economic criteria for bids, bidders are encouraged to demonstrate, where possible, how their proposal will contribute to green economic growth. Defra contributes to the funding of the RGF and will be working with other government departments to allocate funding from early next year. Bids will go before an independent panel chaired by Lord Heseltine and will be finally approved by a ministerial group on which my Rt Hon. friend Caroline Spelman will sit on. EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011 The diVerences between the agriculture tenanted sector in England and in the rest of the EU, specifically, the rights of tenants and landowners to receive EU CAP subsidy Land tenure arrangements vary significantly across the EU and there is not a clear distinction between England and all other Member States. However, some aspects, such as the management framework for common land, are distinctive to England and Wales as is the informality of some of our seasonal lets eg grazing licences. This can give rise to issues in applying standard regulatory requirements under the various CAP schemes. For example, the Single Payment Scheme Handbook, section E (http://www.rpa.gov.uk/rpa/ index.nsf/15f3e119d8abcb5480256ef20049b53a/d363bddf0e993cba802576e300436523/$FILE/ ATTUW7IN/SPS%20Handbook%202010%20V2.0%20WEB%20Mar.pdf) explains how the requirement to have “land at your disposal” is met for those who hold a tenancy under the Agricultural Holdings Act 1986
Environment, Food and Rural Affairs Committee: Evidence Ev 85 or Agricultural Tenancies Act 1995 but requires individual consideration in respect of more informal arrangements. As discussed at the hearing, there are also specific requirements for agri-environment agreement holders—including where they are tenant farmers—that are set out in the scheme handbooks. In addition, the Minister promised to write to the Committee to clarify the change made by the previous Government in relation to the rules regarding succession to a tenancy. Following a recommendation of the Tenancy Reform Industry Group, the previous Government amended the Agricultural Holdings Act 1986 to make changes to the “livelihood test” for succession to a tenancy. Previously a potential successor to a tenancy had to have earned his livelihood from agricultural work on the holding from five out of the last seven years in order to meet the “livelihood test”. This discouraged farm tenants from diversification as it could jeopardise a successor’s chances of succeeding to a tenancy if he was carrying out non-agricultural work. However, the amendment made by the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006 provides that income from diversified and oV-farm activities can be taken into account in the “livelihood test”, where the landlord has given consent for the diversification. We understand there have been concerns raised in the Tenancy Reform Industry Group by the NFU and TFA that some landlords are unwilling to renew consents which were given before the legislation was passed. Following a small survey by the Central Association of Agricultural Valuers, TRIG concluded that there was not the evidence to suggest that this was a problem, but it has been agreed that the matter should be kept under review. The Tenant Farmers’ Association’s proposals in their Vision for Agriculture to modify the taxation system to encourage longer-term tenancies The Tenant Farmers Association’s proposals to modify taxation in their Vision for Agricultural largely reflect recommendations made in the Report of the Tenancy Reform Industry Group (TRIG) at the end of 2003. These are: – An amendment to the definition of agricultural property relief for the purposes of inheritance tax, so that a landlord does not lose or jeopardise his entitlement to agricultural property relief if he agrees to a tenant diversifying out of agriculture. — Deferment of Capital Gains Tax on improvements to let agricultural holdings. — For the purposes of assessing Stamp Duty Land Tax, all farm business tenancies that are let for terms in excess of 10 years to be deemed to be 10 year tenancies. — A review of the schedular system for income tax and corporation tax to remove obstacles to letting and diversification (ie the arrangements whereby losses under one Schedule cannot be oVset against profits under another Schedule). — A review of the VAT position so that where the purpose of the letting is for agricultural use and the dwelling is ancillary to that, the whole be liable for VAT, with VAT due on the whole rent and reclaimable on all relevant costs. — The current period of ownership of seven years for landlords to benefit from Agricultural Property Relief to be aligned with the period of ownership for an owner occupier, that is two years. However, in its Vision for Agriculture, the TFA suggests that it might be time for a more radical reform of Inheritance Tax. For example, it questions whether landlords should automatically be entitled to 100% relief if they choose to let land only on short term let and also suggests that agricultural property relief should only be for those landlords who let their holdings for 10 years or more without a landlord’s break clause. The TFA also argues that a landlord who has decided to let land on a long term basis should be able to treat the income as earned income from which he could oV-set costs and losses from his wider business interests. When the TRIG proposals were originally put forward in 2003 the Treasury made clear that it would need to see concrete evidence before it would contemplate any changes to fiscal arrangements. I have indicated to the Tenancy Reform Industry Group that I am willing to consider any evidence that it can put forward that taxation issues are a barrier to diversification or longer term tenancies, but ultimately this is a matter for the Chancellor. EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011 An update for the Committee on the research Defra has commissioned into water markets (Q224) and the knowledge barriers that this work has identified There are a number of Projects underway in this area — Barriers and opportunities for use of Payments for Ecosystem Services (PES): URS/Scott Wilson are undertaking this short study commissioned by Defra to review the barriers and opportunities for use of PES in a domestic context. The study is due to be completed in March 2011.
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walked they ain’t coming back, be
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great, but there is the wider issue
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