Truss-favoured thinktank attacks ‘massive transfer of wealth’ to landowners

One of Liz Truss’s favourite rightwing thinktanks has criticised the government for considering ditching a much-vaunted new funding structure for farmers, calling the existing subsidy system “a massive transfer of wealth from taxpayers to landowners”.

Truss has announced plans to review the environmental land management scheme (Elms), where farmers would be paid for environmental protection, in order, potentially, to go back to largely area-based payments. The plans were criticised as being “deeply economically inefficient” and for encouraging “laziness” by the Institute of Economic Affairs.

The IEA is a libertarian thinktank credited with coming up with many of the free-market policies pursued by Truss and the chancellor, Kwasi Kwarteng. Some of Truss’s staff have worked at the IEA, and she founded its political wing, Freer. Truss, according to the head of the IEA, has spoken at more of its events than “any other politician over the past 12 years”.

Related: Government poised to scrap nature ‘Brexit bonus’ for farmers

The IEA has been criticised for its policy of refusing to identify its donors, saying to do so would breach their privacy and expose them to harassment.

Matthew Lesh, head of public policy at the IEA, said the body would advise the government that if farmers were to be paid taxpayer money, it should be for public goods, such as environmental protections. He said the current scheme, which pays farmers for each acre of land they use, “is a massive transfer of wealth from taxpayers to landowners. In the end it also hurts agricultural productivity, as it encourages laziness if you give people money without them having to invest in modern techniques and just for having the land.”

Lesh added that the idea of subsidising landowners with no public benefit was “inconsistent with the rest of the government’s growth agenda – it is inconsistent with what Liz Truss was doing as trade secretary in boosting trade deals”.

Farmers should be welcoming the idea of being paid for public goods, he suggested, as it would be hard to justify paying them to produce food when consumers are already buying food from them at the supermarket.

Lesh said: “A system of environmental goods sounds like a far more reasonable approach if the government is going to keep subsidising the agriculture industry. From the farmers’ perspective it would make more sense to have a popular system, producing public goods. There is some justification for some level of subsidy for environmental purposes if properly targeted and set at a level that makes sense for taxpayers. We already give farmers money by buying products from them, it’s what any other industry does to survive.”

Criticising the National Farmers’ Union, which welcomed the review of Elms, he added: “It’s the classic story of a very loud and effective lobby group which is making a claim in their own interest for subsidies from the taxpayer.”

The former environment minister Rebecca Pow, who worked on Elms, also expressed alarm at the government’s plans. She said: “We must keep up all pressure to ensure we don’t back-track on all the incredible progress we have made on the environment. Nature is in freefall, we are the most nature-depleted country in Europe and we must address this; and there isn’t a conflict with food production – it only helps it, for example having healthy soils, clean water and pollinators.”

The government also faces opposition from the Church of England, which is mobilising its bishops to block attempts to scrap environmental regulation and water down Elms.

Graham Usher, the bishop of Norwich, who leads the bishops on environmental issues, said: “I will be making representations to the government, and I will be advising those bishops in the House of Lords on how to act as well, so they are well briefed.

“I believe that there is a clear biblical mandate to care for God’s creation. We will be speaking about aspects of the chancellor’s statement last week – we have a duty to protect our nature in a broader sense so we have a duty to speak out about policies that are not going to protect and enhance nature.

“We treasure the great artworks of our nation, our historic buildings, we treasure them as, if they are destroyed, you can’t recreate them. That applies too to our habitats and species.”