4
BUSINESS
Many smaller
farms will
not survive
these changes
A sportswear business
launched by a high-profile
Tory mayor and ally of Boris
Johnson has collapsed owing
£3 million to the taxman and
other creditors.
Ben Houchen, 34, founded
BLK Sport in 2016 and still
mentions starting the
business in his profile on the
website of the Tees Valley
Combined Authority he runs.
However, BLK, which sold
a range of club-branded tops
and other sports clothing, in
fact collapsed with seven-
figure debts in early 2018.
The liquidator’s report
states that there were
insufficient funds to repay
creditors, which included
sports clubs, small businesses
and HM Revenue & Customs.
The governing body for
rugby league was owed more
than £124,000 by BLK, with
one of the sport’s clubs,Cornish Pirates, listed as a
creditor for £35,700. HMRC
was owed £64,071.
Houchen sold BKL in July
2017 — nearly six months
before its administration.
This weekend the mayor
sought to distance himself
from the collapse. Houchen
said: “Even before I sold my
shares, I was doing less for
the business because I was
concentrating on the mayoral
election.”
He added that he had been
interviewed by BLK’s
liquidator, who had identified
no failings by him. “My
understanding is that the
company failed due to
mistakes made when I was no
longer involved,” he said.
The mayor is himself
named in the liquidator’s
report as being owed more
than £28,000.
The Teesside politician is
widely seen as a rising star of
the Tory Party, emblematic ofRobert Watts the destruction of Labour’s
red wall across the north of
England. A popular figure
across the region, Houchen is
leading the redevelopment of
Teesside’s airport. He spent
£40 million of public money
buying the site in late 2018.
However, on Friday,
Canadian investment group
Brookfield Asset Management
called off the sale of PD Ports,
which runs Teesport.Houchen had been battling to
take it over to cement his
control of the freeport site.
The mayor had lined up a
consortium of investors to
help fund the buyout, valued
at £2 billion by Brookfield. Its
abandonment of the sale
represents a setback for
Houchen, who saw the
freeport as an engine for
regional economic growth.
Although BLK collapsed
into administration three
years ago, the liquidator’s
report states that a company
called RU Active paid
£45,000 to acquire some of
BLK’s assets and is now
trading under the BLK name.
Houchen served as a
director of RU Active between
2015-16, but was not involved
with the company at the time
of BLK’s collapse. He said he
had not spoken with the
people he ran BLK with — or
his associates at RU Active —
Ben Houchen: Tory star since early 2018.from environmental hazards; mitigation
and adaptation to climate change;
enhanced beauty, heritage and engage-
ment with the natural environment”.
Food production, to the bafflement of
some in the farming community, is not
identified by Defra as a public good.
Elms will consist of three separate
schemes. The first, the Sustainable Farm-
ing Incentive, will account for the bulk of
the money and focus on supporting farm-
ers judged by Defra to be working the
land in an environmentally friendly way.
The second, Local Nature Recovery,
will give farmers funding for creating,938
Farmers eligible so far for payments
under the new scheme61%
Percentage of average farm profits
dependent on BPS subsidiesT
his is the week Christine
Thompson and tens of thou-
sands of other farmers start to
feel the financial pain of
Brexit. Thompson and her
husband, David, have a flock
of 420 breeding ewes. They
also grow barley, wheat and
other crops at Reagarth Farm
on the edge of the picturesque
North York Moors.
When Britain was a member of the EU,
the Thompsons received up to £48,000 a
year from the basic payment scheme
(BPS), the system that handed out the
British share of the single market’s Com-
mon Agricultural Policy.
On Wednesday, as part of the biggest
shake-up of agricultural policy for half a
century, the Department for Environ-
ment, Food & Rural Affairs (Defra) willA post-Brexit subsidy regime
begins this week that will
prioritise green concerns over
food yields. Farmers, half
of whom voted Leave,
are worried, finds
Robert Watts
managing and restoring woodland, wet-
lands, peatlands and other habitats.
Under the final initiative, Landscape
Recovery, clusters of farms will work
together on large projects, including
peatland restoration and the planting of
forests. One project that Defra may fund
through this scheme brings together
about 70 farmers and landowners.
The NFU, which represents more than
55,000 farmers, is not short of concerns
about Elms. The lobby group has been
urging Defra to delay the cuts in the exist-
ing subsidies until the new regime is up
and running.
The old BPS payments were equivalent
to about 61 per cent of farm profits
between 2014 and 2017, according to offi-
cial figures. More than three-quarters of
farmers polled by the Country Land and
Businesses Association and property
consultancy Strutt & Parker feared that
payments under the new scheme would
be “insufficient”.
Earlier this month, Defra launched
pilot Elms projects with 938 farmers,
with payments expected to start in Feb-
ruary. But this group represents only
1.1 per cent of the farmers who currently
receive BPS cash.
Tom Bradshaw, a cereal farmer from
Colchester who serves as the NFU’s vice-
president, said: “It’s the lack of detail
about the new system that many farmers
are finding particularly frustrating. The
cuts in subsidies are landing now and we
don’t have hard details on what Elms will
pay out and exactly what farmers need to
do to receive this financial support.”
But Bradshaw sees a much bigger
issue: “There is no government strategy
for food production. Elms is about man-
aging the environment and helping the
UK reduce carbon emissions — that surely
requires farmers to adopt policies that
will remove land from food production?”
Smaller harvests suggest lower earn-
ings for farmers and so higher food prices
for all of us. Defra will provide much
greater detail on all three elements of
Elms in the coming days, with specific
information about what farmers will have
to do and how much they will earn.
Why so little detail so far? A senior
Defra source said that civil servants are
striving to consult very closely with farm-
ers about the new scheme. They said this
collaborative process will take time, but
should lead to a better subsidy system
that is easier for farmers to use. But why
reduce the existing subsidies before themake the first payments of a new, post-
Brexit regime.
Annual BPS payments will continue,
albeit funded by British, rather than EU
taxpayers. But they will be phased out
until they are finally axed in 2028. In their
place will be a new environmental land
management scheme, Elms for short.
Controversially, the BPS payment
begins to taper this week even though
fewer than 1000 farms have been asked
to participate in trials of the new ELMS
scheme. That will leave most of the
85,000 BPS recipients seriously out of
pocket.
“We expect to receive £4,000 less
[through BPS] this year,” said Christine
Thompson, 60. “But that’s just the start:
by 2024, we will get only 50 per cent of
what we received before. Even once Elms
has been introduced, we won’t get more
than 55 per cent.
“This is a very worrying time for many
of us in rural communities. Farms are
businesses, just like any other. What busi-
ness wouldn’t be hit by such a loss of
income? Yes, we are resilient people, but
many smaller farms will not survive these
changes — that’s inevitable.”
Research suggests 52.6 per cent of
farmers voted for Brexit, rising to over 60
per cent in the West Midlands, East of
England, North West and Scotland.
Now, the revolution it has brought to
UK agriculture has enormous ramifica-
tions, and not just for the UK’s 149,000
farms. Tens of millions of us will also have
to pay more for our food due to the gov-
ernment’s shake-up of subsidies.
There are also concerns that ministers
are creating a new regime too focused on
cutting carbon emissions and helping
nature — and less interested in encourag-
ing food production. After all, importing
more food by air and truck to compen-
sate for leaner yields from British agricul-
ture makes scant environmental sense.
So what do we know about how the
government’s new system will differ from
the one it replaces?
Payments handed out under the old
BPS are largely determined by the size of
a farm and handed out once a year. Elms,
by contrast, will make more regular pay-
ments to those farmers who can demon-
strate through the year that they are
delivering at least one of six “public
goods”.
Defra identifies these as “clean air;
clean and plentiful water; thriving plants
and wildlife; reduction in and protectionReaping what they sow?
85,000
FARMING IN NUMBERS
Number of farmers receiving
subsidies under the old “BPS” systemhalf
,
ILLUSTRATION: JAMES COWENPM’s ally behind failed firm with £3m debt