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Carla Lockhart (Upper Bann) (DUP)
I beg to move,
That this House has considered the future of farming.
It is a privilege to serve under your chairmanship, Sir Roger, and to bring this timely and important debate to the Floor of the Chamber. I did not think that it would be being debated at the same time in the other place. However, we will progress.
Farming has long been the backbone of our nation, underpinning food security, providing jobs and delivering significant environmental benefits. The agrifood sector across the United Kingdom contributes £148 billion to the economy and employs over 4 million people, including 462,000 directly in agriculture. It is an industry worth protecting and speaking out for.
Today, I speak not just as a politician, but as someone with farming in my blood—the daughter of a farmer, the wife of a farmer, and the mum of a little boy who dreams of becoming a farmer. The future of farming is deeply personal to me, as it is to many of the 209,000 farm owners across the UK, including 26,000 in Northern Ireland. These people work 17 million hectares of land to feed the nation, and care for the countryside. Their average farm size is 82 hectares, and their contribution to the UK economy amounts to £13.7 billion annually. Yet, they now face an existential threat from the proposed changes to agricultural property relief and business property relief.
Mr Richard Holden (Basildon and Billericay) (Con)
The hon. Lady is talking about the direct impact on farmers, but in her opening comments she mentioned the broader agricultural, business and food sectors across the UK economy. Does she share my concern that, whether it is the tractor manufacturers or those who work in the farm shops in my constituency, the knock-on consequences will be huge if the Government’s proposed tax changes get through? They will impact not just the individual family farms themselves, which are the backbone of our economy, but all aspects of our rural and urban economy.
Carla Lockhart
I could not agree more: the knock-on impact will be immense.
The Budget’s decision to cap full inheritance tax relief at £1 million, with a 20% charge above that, will devastate family farms. These changes know no boundaries and will affect countless small and modest family farm businesses. Independent analysis shows that up to 75,000 farming taxpayers will be impacted over a generation—five times the Government’s initial estimate. In Northern Ireland alone, the Department of Agriculture, Environment and Rural Affairs predicts that one third of farms and 75% of dairy farms will be hit the hardest. These figures are not plucked from the sky; these are real, evidenced figures from DAERA. Farmers face the grim prospect of selling off prime agricultural land, probably to big businesses that certainly do not want to use it for food production. This death tax will erode our food security and end future generational farming.
Three weeks ago, at the Eikon centre in Lisburn, I stood in front of 6,000 farmers who had braved Storm Bert to voice their concerns. Their message was clear: stop the family farm tax grab. The Government must listen. If they proceed with this policy, it will not only destroy an industry that feeds the nation, but tarnish their legacy, with the destruction of rural communities and livelihoods. When we are asked about this Government’s legacy thus far, sadly farmers and pensioners come to mind.
Sammy Wilson (East Antrim) (DUP)
Does my hon. Friend not find it really angering that the Government justify this policy by saying that a few big landowners buy up land as a way of escaping inheritance tax? Yet, the impact is not on the big landowners; it is on ordinary landowners, such as those she has described. The impact on the countryside will be enormous.
Carla Lockhart
My right hon. Friend is exactly right: big businesses will be the ones buying over the land, and they are not interested in farming it.
I respectfully ask the Minister to heed the voices of farmers, backed by detailed analysis from the Central Association for Agricultural Valuers and others. Farmers know their industry best. This policy must be revisited to ensure the sustainability of farming for generations to come. Let us act now to protect the custodians of our land, the economic drivers of our rural areas and the hand that feeds our nation.
Our farmers face relentless challenges, and the abolition of agricultural property relief is just the latest in a long list of blatant attacks. For too long farmers have been denigrated and subjected to some of the most draconian environmental restrictions. They are blamed for polluting waterways, while raw sewage goes unaddressed. Across all four nations, farmers are held back by planning restrictions over ammonia, making it nearly impossible to replace or upgrade sheds, despite these improvements benefiting the environment. Farmers face real threats from disease, including bluetongue, tuberculosis and bird flu, with little effective support. In Northern Ireland—this is a devolved issue, but the point is still important—herds of cattle are being slaughtered because of a lack of decisive action on TB, leaving farming families devastated and unsupported.
Robin Swann (South Antrim) (UUP)
On the bovine TB agenda, does the hon. Member agree that what the recent Minister in Northern Ireland brought forward was a disappointment? There were no concrete proposals as to how to address the issue.
Carla Lockhart
I do not want to get into a devolved issue, but I will say that farmers are absolutely reeling from the lack of action by the Minister in Northern Ireland.
Farmers are increasingly being forced to adopt measures under the guise of supporting environmental goals, but many of these come with significant concerns and costs. One topical example is Bovaer, an additive aimed at reducing methane emissions from livestock. It is promoted as a solution to agriculture’s environmental impact, but it has raised serious questions in the minds of consumers about the long-term effects on animal health and consumer safety. Consumers are understandably concerned about the food chain, and farmers are left shouldering the burden of implementing often costly solutions, with little clarity on their benefits or consequences.
If we genuinely want to support sustainable farming, the Government must ensure that these measures are properly researched and justified and are accompanied by meaningful support for farmers in adopting them. Instead, what do farmers see from this Government? A raft of policies that show nothing but contempt for British farming. In the past month alone we have seen plans to abolish APR and a new tax on double cab pick-ups—the lifeline vehicle for many farmers—which will come into effect in 2025.
We have also seen the galling revelation that foreign farmers are receiving £536 million from the UK aid budget while our own farmers are left to struggle. British taxpayers’ money is being used to fund low-carbon agriculture in countries such as Brazil—the 11th richest nation in the world—and Kenya, as well as in Asia, while our own farmers face insurmountable challenges to their food security and sustainability. What good is environmental progress if we import more food from abroad, produced to lower standards and with a far greater carbon footprint than what we can grow here at home?
Our food security matters. Our British farmers matter. Yes, to this Government, it seems that they do not. I implore the Minister to reverse course. He should listen to the voice of farmers and prioritise the future of UK agriculture before it is too late. Let us support the custodians of our land, the drivers of our rural economy and the people who feed our nation.
Labour shortages are adding further pressure on an already stretched industry. Farmers are struggling to secure seasonal workers to pick and process crops. Whether it is heavy goods vehicle drivers, poultry workers, vets, butchers or abattoir staff—the workforce simply is not there. If we want a farming sector capable of meeting our needs and demands, the Government must overhaul their schemes and work directly with those who know the industry best to address these critical shortages.
At the National Farmers Union conference in 2023, the now Prime Minister said:
“losing a farm is not like losing any other business—it can’t come back...You deserve better”.
Before the election, he wanted a “genuine partnership” and said:
“We can’t have farmers struggling”.
He said they deserve “a government that listens” and “stability” and “certainty”. He wanted to roll up his sleeves and support our British farmers. Well, I call on his party, which is now in the driving seat, to pull back from this cliff edge and start to introduce policies that support our active farmers.
I want to finish where I started. When we think of the future of farming, we must think of those little welly boots at the back door of farm dwellings. We need to support our young farmers, and I call on the Government to do more, particularly on education. The very youngest in our society need to know where our food comes from. Sadly, all too often the answer is, “The supermarkets.” I therefore call on the Minister to address this issue with his counterpart in the Department for Education. We need a syllabus and an education system that teach our young people about the importance of our farmers.
As we stand on the cusp of a vote in the main Chamber, it is important to note that a recent poll demonstrated that more than half of those surveyed supported a farmers’ strike, on the basis that farmers are among the groups worst treated by the Government. I believe that those protests are coming, because farmers are at breaking point. Farmers in Northern Ireland increasingly need mental health support from Rural Support. There are reports of things getting too much for some to cope with, with people subsequently taking matters into their own hands. Farmers need our support; they need to know that their work and efforts—night and day—are appreciated, and that they are an integral part of our everyday life.
In conclusion, at the event in the Eikon centre hosted by the Ulster Farmers Union, I had the pleasure of meeting next-generation farmer and young mum, Lorraine Killen. Lorraine was inspirational as she addressed the crowd. She said that uncertainty, disappointment, apprehension, dread and heartbreak are just some of the raw emotions she felt as she reflected on the reality of an industry under immense pressure and a way of life increasingly under threat.
Let us redouble our efforts in this place and fight with every sinew to support our farmers—no farmers, no food.
Several hon. Members rose—
Sir Roger Gale (in the Chair)
Order. We have 13 Members wishing to participate and about 24 minutes. I will put on an immediate time limit of two minutes. If you do the maths, you will find that that does not work. There will be a Division at around 5 o’clock, and injury time will be added on. We will see how many Members come back after the Division, and I will reassess the situation, but for the moment, there is a two-minute time limit.
Sarah Smith (Hyndburn) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. I grew up in a rural community as well, and I know how hard farmers work. I know how long it takes for generations to pass on the expertise involved in managing and cultivating the land. It is not like any normal apprenticeship or training programme; children learn over decades how to get the most out of the land, how to get the best yield and how to manage the ever-unpredictable set of circumstances that any year on a farm may bring.
However, I suggest that the last thing farmers need right now is the scaremongering that has been undertaken by the Opposition parties; they are protecting the vested interests of wealthy landowners. It is not just a minority of these people who are buying up the land; 50% of our farmland is being bought up by them, and they are on record saying that they are seeking it to avoid inheritance tax. That is the issue we are taking on. The average farmer in my constituency in Hyndburn has nothing to fear. When we look at the numbers in detail—unfortunately, I do not have the time to offer them—they show that those farmers are protected from the tax. The average farmer, even when we look at arable land values and some of the higher-value land, will not be impacted by the tax.
We have to acknowledge the challenges that some farmers face and the rural poverty in this country—we talk about it a lot and it is very real. But that is not the fault of the current policy; it is the result of decades of failure, and particularly of what happened in recent years under the previous Government, who failed to grasp how to support farmers to be more productive, so that they can earn the money they ought to be earning.
Jim Allister (North Antrim) (TUV)
The hon. Lady says that 50% of those affected are people who invest in land not for farming; is not the answer to put 40% inheritance tax on them and 0% on the real farmers?
Sir Roger Gale (in the Chair)
Order. I should have said—I did not, but I will now—that if any Member chooses to intervene, which they are quite entitled to do, I shall treat that as a speech, so they will not get called later in the debate.
Sarah Smith
A farming survey shows that the farmers we are speaking about make an average profit of £96,000 per year, which means that even those who are impacted will not be subject to the same level of inheritance tax as many people on similar incomes. They face half the rate of inheritance tax, and through gifting they can avoid that if they undertake the necessary planning. They can of course still protect their farmhouse—that concern is sometimes raised—through the way the system operates. We have to keep coming back to the point that at least 75% of farmers will not be impacted by the measure.
Our Government have an ambitious plan for our farmers. They will invest £2.4 billion in farming next year to focus on sustainable food production and protecting nature. They are getting £60 million out the door through the farming recovery fund and have committed to providing a further £208 million to prevent the collapse of our defences against disease threats—
Alex Easton (North Down) (Ind)
It is a privilege to serve under your chairmanship, Sir Roger. Well done to the hon. Member for Upper Bann (Carla Lockhart) for securing this debate.
I should be able to set out a vision of optimism and resilience for the future of farming in Northern Ireland today, but sadly that is not the case. It appears that, with the proposed inheritance tax, the Government know neither the price that farming families will have to pay nor the value of their industry. Our UK agricultural heritage is a cornerstone of our economy, culture and communities, and it is critical for our future. The 26,000 farmers and their families in Northern Ireland deserve better. When we take into account the food and drinks processing sector, the proposed measure will affect 70,000 jobs in Northern Ireland.
Northern Ireland’s fertile lands and valuable climate have long supported diverse farming activities, ranging from dairy and beef to crops such as our world-famous potatoes. As we look to the future, the potential for growth and innovation in our agricultural sector is immense. We should be looking at enhancing cutting-edge technologies, such as precision agriculture, drones and sensors, to increase productivity and ensure environmental sustainability. Our hard-working farming community wants to enhance efficiency in order to protect our natural resources for future generations. Our farmers are the true guardians of the countryside, and sustainability is central to their vision. They are dedicated stewards of the land, committed to adopting eco-friendly practices such as crop rotation and organic farming. They are also committed to sustainability.
Farmers’ efforts not only safeguard our environment but open new markets for our produce, meeting the growing global demand for environmentally responsible products. Farming is more than an economic activity: it is the backbone of our communities. The proposed tax will place an undue burden on families, making it difficult for them to pass down their farms to the next generations—
Baggy Shanker (Derby South) (Lab/Co-op)
Thank you for allowing me to speak under your chairmanship, Sir Roger.
British farmers play a significant role in keeping the nation fed, and they are the custodians of our beautiful countryside. In recognition of their vital role, the Budget is steadfast in its commitment to supporting them. More than £5 billion will be allocated to the farming budget over the next two years to bolster sustainable food production and promote nature’s recovery.
Food security is national security, which is why supporting farmers to feed our nation remains a top priority. To achieve that goal, the Government will leverage their purchasing power to ensure that at least half the food procured for hospitals, military bases and prisons is locally sourced and certified to meet high environmental standards. We have provided £60 million through the farming recovery fund and allocated an additional £208 million to strengthen defences against disease threats. Those are clear examples of a commitment to safeguard farming in the UK. That is what tangible support for British farmers looks like.
Opposition Members can moan, but let us remember that since 2010 more than 12,000 farmers and agriculture companies have been forced out of business. Moreover, trade deals with New Zealand and Australia, brokered by the Conservatives, opened up the UK to meat imports produced to standards so low that they would be illegal in Britain. That is their legacy on British farming. Non-farming investors have dominated land purchases, with over half the farms and estates sold being acquired by non-farmers. Meanwhile, a small number of wealthy landowners have disproportionately benefited—
Jess Brown-Fuller (Chichester) (LD)
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for Upper Bann (Carla Lockhart) on securing this important debate.
Farmers are environmental stewards, custodians of our heritage and vital contributors to our local economies. Yet, under the previous Conservative Government, rural and farming communities were totally undervalued and undermined. In my constituency, more than 18,000 hectares of farmland, spread across 178 holdings, produce some of the best food in the country. I have had the pleasure of meeting some of my local farmers, who tell me that their futures are now under threat.
The Chancellor’s 2024 Budget imposes a series of damaging policies on rural communities. Cutting agricultural property relief risks the viability of family farms. In Chichester, it could affect nearly 50 farms. When farmers are faced with the choice either to be in debt or to sell off land to pay the tax, the choice will be clear and farms will be eroded. The introduction of the carbon border adjustment mechanism will add an estimated £50 per tonne to fertiliser costs. Combined with the 1.9% cut to day-to-day spending at the Department for Environment, Food and Rural Affairs, those changes will make sustainable farming practices harder to achieve.
Tom Gordon (Harrogate and Knaresborough) (LD)
I recently met a family of farmers in my constituency who mentioned the point about fertiliser. It is not just the changes to inheritance tax that are going to clobber our farmers; it is the combination of a perfect storm. Does my hon. Friend agree that this change is coming down the track after a £227 million underspend by the Conservatives, and that we need the Government to look into that and ensure that farmers get the funding they deserve?
Jess Brown-Fuller
I agree with my hon. Friend that it is a series of things, compounded on top of each other, making our farmers feel totally let down. They felt ignored by the Conservative Government for years. When Labour stood on a manifesto pledge of change, farmers did not think this would be the change they were promised.
Farmers in Chichester and across the UK deserve better. They are critical to our food supply, environment and rural way of life. I urge the Government: please stop undermining them and start supporting them. Let us work together to ensure that farming remains a thriving and sustainable pillar of our nation for generations to come. I call on the Government to look at the Liberal Democrats’ manifesto pledges, such as a £1 billion increase in the farming budget to support sustainable agriculture, the renegotiation of our trade agreements to protect British farmers from being undercut by imports failing to meet UK standards, and a reinstatement of the capital grants scheme to support environmentally friendly farming practices.
I am aware that many Members want to speak, so I will leave it there.
Dan Aldridge (Weston-super-Mare) (Lab)
I think we can all agree that food security is national security. The future of British farming deserves a stable Government with a funding strategy reflective of that significance. I and so many others welcome the Government’s £5 billion increase to the farming budget over the next two years—the largest budget for sustainable food production in our history. The size and scale of the commitment to our farming future are unprecedented and not talked about enough. The reforms and investment, all detailed online, will future-proof our domestic food production and food security. I will not go through them now because we do not have time.
When the political winds have blown the Opposition on to another topic, we will be here, in government, to work with farmers on improving the sector and its resilience.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Does my hon. Friend agree that the best thing the Government can do is give some direction and certainty to farmers with the new land use framework and the new pipeline of sustainable farming incentives, which are upcoming to balance food production, nature recovery and carbon reduction, so that they have the confidence to invest and to return to profit?
Dan Aldridge
As so often, I agree with my hon. Friend and fellow south-west MP. As she has identified, we are trying with the Budget to fix the neglect of the previous Government.
It is important to say that so many of my constituents in Weston-super-Mare are dismayed at the idea that tax relief of up to £3 million is not enough. These are finances outside the concept of the vast majority of my constituents. For people living in a community where we all work together, the rhetoric we are hearing is quite divisive. It is a hard pill to swallow when so many have little to no savings, nor any prospect of owning property to pass on to their children. Many millions of people, including farmers throughout the country, are working harder than ever to pay for the basics that their families need simply to survive. The Government are simply saying that, in any community, those who can pay more should.
Ellie Chowns (North Herefordshire) (Green)
It is a pleasure to serve under your chairmanship, Sir Roger. I will focus my comments on areas where I think we can achieve a degree of cross-party agreement. I have already heard agreement that farmers are the stewards of the land. We can agree that farming is a diverse sector, and farmers as a group are very diverse, which we need to bear in mind whenever we make policy.
I would like to discuss four issues that farmers in my North Herefordshire constituency have raised with me. First, farmers need long-term policy certainty. The hon. Member for Weston-super-Mare (Dan Aldridge) talked about record investment in farming, but in real terms it is effectively static. What we need is a significant ramping up of Government support for the farming sector. The Nature Friendly Farming Network has called for a doubling of the farming budget, which is a call that the Green party strongly supports. We need far more investment in environmental land management schemes, as well as the long-term certainty that farmers need to make decisions to put land into those schemes.
Secondly, farmers tell me that they want better regulation of the food sector, such as a more even balance of power between farmers and supermarkets. Too many of them feel under the cosh as price takers, not price makers. That is a real problem. There is also the phenomenon of farmwashing, whereby supermarkets pretend that their food is grown on lovely family farms all over the UK when, in fact, nothing could be further from the truth. We need clear Government regulation on that.
The third issue, which has already been mentioned, relates to the Government’s role in public procurement. I am glad the Government are taking some initiative on that, but there is far more that could be done, particularly to ensure that schools provide universal free school meals based on the procurement of local, sustainably grown food—
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I am delighted to serve under your chairmanship, Sir Roger. I thank the hon. Member for Upper Bann (Carla Lockhart) for securing this important debate.
Seventeen per cent of Scotland’s population is rural and it delivers some of the best agricultural produce in the world. Seventy-six per cent of the land in my constituency is used for agriculture, and farms are incredibly important to the local economy. Labour shortages have impacted farms across Aberdeenshire. Food can be left unpicked due to labour shortages, and that needs to be addressed, especially following Brexit and the associated migration changes. Even a regional visa for rural farms in Scotland would be an incredible help to farms in my constituency. Technological solutions currently cannot solve labour shortages. In the meantime, there is a risk that, without the right amount of labour at the right time, these types of farms could become unviable in Scotland.
In a discussion about the future of farming, it would be remiss of me not to mention the recent change to agricultural property relief. Many farmers in my constituency have been in touch to express their concerns about the change and the significant financial burden it will place on family farms. I am of the view that the change will be damaging for rural communities and farms across the UK, never mind Scotland, and I would like to see it reversed.
I am sure that Members here and the UK Government understand that food security is national security, and I welcome any action to secure that. It is key to get more people buying local produce, supporting local farms and, in turn, reducing emissions and supply chain issues. Finally, I am delighted to learn of the commitment today by the Scottish Government to support farmers in Scotland, including an investment of £660 million and a capital transformation scheme of £20 million in 2025-26.
Ann Davies (Caerfyrddin) (PC)
It is a privilege to serve under your chairmanship, Sir Roger. I thank the hon. Member for Upper Bann (Carla Lockhart) for securing the debate. I declare an interest as a tenant farmer.
Farmers in Wales feel threatened by the approach that this Government are taking to inheritance tax. It concerns me that that approach threatens the viability of working family farms. The UK Treasury data used to calculate the impact of the Government’s approach includes smallholdings and non-working farms, distorting the number of Welsh farms affected by inheritance tax thresholds. The Farmers Union of Wales says that had the Treasury focused its estimates specifically on the mainstream farms responsible for the bulk of agricultural outputs, the proportion affected by the changes to agricultural property relief would be revealed to be far higher than it claims.
The FUW estimates that farms responsible for nearly 90% of Welsh food production could be in scope to pay inheritance tax. That would be devastating for farmers in Wales, as the average income of different types of farms is much lower than the potential inheritance tax charge. Livestock farms predominate in Wales, making up 70% to 80% of Welsh farm holdings, and inheritance tax bills could be many times the annual income of such farms. The changes will also impact tenant farmers. With around 30% of Welsh agricultural land rented, reduced availability of rented land could lead to business closures, homelessness and a decline in new people entering the workforce.
It is clear that Wales’s needs have been ignored so far by the Treasury. Will the Government listen to the likes to the FUW and NFU Cymru, which are calling for a Wales-specific analysis of the impact of the changes to APR?
Jim Shannon (Strangford) (DUP)
I thank my hon. Friend the Member for Upper Bann (Carla Lockhart) for working so hard to keep the plight of farmers throughout the United Kingdom in the mind of this Parliament. She does her constituency credit, as always. I declare an interest as a member of the Ulster Farmers Union and as a landowner and farmer.
I have spoken on this issue so many times, yet I do not grow tired of it. The reason is clear: without small family farms there is no food sustainability or, subsequently, food safety. Most of the 25,000 farms in Northern Ireland are small family farms run by one or two farmers. They are not the massive profit-making industries that perhaps the Government have been led to believe they are. The farmers might be land rich, but they are cash poor. They love the land; they have it in their blood. They do not toil to make a massive profit, but to pay the bills and continue doing what they love.
The fact is that most farms—65% of farmers—could not survive with this inheritance tax. That does not pave the way for food security or production in Northern Ireland. We do not have large farms making millions each year. We have families who are working farms that cannot even pay a living wage. On some of the best farms in my constituency, the sons work the farm but also work privately for income, as they cannot raise a family on the farming income. That is the reality in Northern Ireland. I beseech the Minister to listen to the points I am making, because they are made with sincerity and honesty. If we add to this the inheritance tax and remove the protection from the farming grant, we are left with unprofitable farms, and sons and daughters who have no option but to sell the land and get a job.
The end of farming as we know it is not simply sad, given the history and the lifeblood that flows through farming families, but worrying, as it leaves us beholden to other nations for our food. The average farm in Northern Ireland is worth £14,000 an acre, and the average farm is 100 acres. If the Minister or his civil servants add up the figures, they will see that that means that the threshold is quickly reached. For many farms in Northern Ireland the situation can be fixed if the Government look at it honestly and come up with a different scenario and a different threshold. The quicker they do it, the better.
John Milne (Horsham) (LD)
It is a pleasure to serve under your chairmanship, Sir Roger. My constituency includes a mix of rural and urban areas, but this tax hurts both, and that is the key point that I want to make. Local farms do not exist in isolation; they are part of an ecosystem of businesses that depend on each other to thrive.
A local farmer, James, has told me about his farm, which has been in his family since all the way back in 1904. James supports his young family and elderly relatives. It is not just a full-time job, but three full-time jobs. That is because to operate the farm successfully, James now runs three businesses: a fallen stock collection business, a pet cremation business, and the farm itself. Without diversifying, he might have gone under a long time ago. Farming alone often is not enough for many farmers to keep their heads above water. Now James faces a national insurance hike, a sharp acceleration in the phasing out of direct payments under the basic payment scheme, and the removal of APR and business property relief. How many businesses do we think one farmer has to run before they simply break?
Yes, there is a problem with non-farmers investing in land to avoid tax, but this family farm tax is not the way to fix it. There is too much collateral damage. It is going to hit too many farmers like my constituent James with a family to support, a business to run on slim margins, and a community that relies on them. The tax comes on top of the pressures imposed by a botched Brexit and trade deals that threaten to bring down the high standards of British farms. The money raised by the tax will not go anywhere near plugging the Budget black hole.
We need to recognise that a strong farming community is our best ally in moving towards a sustainable food system and job-filled rural communities. I call on the Government to work with the farming community to build a national food strategy that benefits farmers in the fields and the shoppers in our supermarkets.
Richard Tice (Boston and Skegness) (Reform)
It is a great pleasure to serve under your chairmanship, Sir Roger.
Many hundreds of family farmers in the constituency of Boston and Skegness are appalled at the family farm tax. Just last week, Richard and his son Jake came to see me. Their farm has been in the family for 120 years. They went through the cost increases recently: the fertiliser tax, the reduction in basic payment scheme payments, the carbon tax, and now the increase in national insurance. They say they will not be able to afford to pay the farm tax even with the 10-year payment timeframe, and will therefore have to sell upon death. This tax will bring the exact opposite of what the Government want—what we all want—which is growth.
One farmer told me that he has cancelled a £1 million expansion to his strawberry farm. Another said that he has cancelled an order for a £300,000 piece of equipment. This tax will do the exact opposite of what the Government want. There is a very simple solution: to increase the threshold on which it is payable and increase the qualifying period threshold at which people benefit from the tax relief. With that, the Government can achieve their aims and avoid the abuse, and family farmers can continue to invest.
Jim Allister (North Antrim) (TUV)
It is a pleasure to serve under your chairmanship, Sir Roger.
In Northern Ireland, land prices are in some cases twice as high as in other parts of the United Kingdom. The consequence of that is that the farm tax threshold will be reached more quickly and the burden will be even greater. But the real cruelty of the tax is this. In many cases, when one generation take over a farm, they naturally want to grow, expand and improve their productivity. Very often, during a lifetime, extra land will be bought. That extra land is bought with money on which tax has already been paid. So this is a double taxation: people buy land with profits they have made on which they have paid their tax, then when they die, the Government come looking again. That is so unfair, particularly when it is family farms being crucified by that tax.
I understand that there are people exploiting the market who are interested not in farming, but in tax relief, and own land for that purpose. The Government should hit them with all the might they can with the 40% inheritance tax, but exempt the genuine farmers—those who have a farm business number; those who are in receipt of direct payments; those who are genuine, active farmers. If the Government exempted them and went harder after those exploiting the system, they would probably have the same return at the end of it. Would that not be far more equitable than what is being proposed?
Robin Swann (South Antrim) (UUP)
It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for Upper Bann (Carla Lockhart) for securing the debate.
I want to take exception to language used by Government MPs here today and in the debate we had in the main Chamber on 11 November, when they accused anyone who raised genuine concern for family farms of being either in the pocket of big business or alarmist. I can assure you, Sir Roger, that the Members I know who have spoken here and those who spoke in the main Chamber on this issue did so out of genuine concern and understanding of the effects that this tax grab will have on our family farms.
I was so concerned that I asked for clarity on the figures that I had used from the Northern Ireland Agriculture Minister. He responded:
“I am disappointed at the UK Government’s dismissal of the figures you quoted and the subsequent comment that our analysis that one third of farmers and up to 75% of dairy farmers will be affected by the new inheritance tax limitations as ‘alarmist’. I can assure you that these figures are based on a solid analytical basis…from data collected as part of the Northern Ireland Agricultural Census 2023.”
I may have many differences with him, but I believe the Agriculture Minister in Northern Ireland over what I have heard from the Labour Government about how the tax will impact Northern Ireland farmers.
A 2023 Irish Farmers Journal survey showed that the average price of agricultural land in Northern Ireland is £13,794 per acre. It would be reasonable to assume that by 2026, when the inheritance tax changes take effect, the average price will have increased to £15,000 an acre. Based on that information, farms in Northern Ireland with 67 acres of land will be affected by this tax grab.
Mr Lee Dillon (Newbury) (LD)
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for Upper Bann (Carla Lockhart) on securing this important debate. Farmers are the very foundation of rural communities the length and breadth of the country. They put food on our tables, steward our countryside and sustain rural communities. Farming is more than a profession; it is part of Britain’s identity and, as the hon. Member said when opening the debate, something that is worth protecting.
I have the privilege of representing many farmers in my Newbury constituency, who are vital to our local community and our way of life. Farming is a uniquely slow-moving industry, heavily influenced by seasonal uncertainties. In such an unpredictable landscape, scaling up operations becomes essential for achieving profitability. Yet, despite those mounting pressures, successive Governments have failed to support our farmers. I am sure that Labour Members—
Mr Dillon
I will not give way.
I am sure that Labour Members never expected to vote for small farms to close or to be swallowed up by large landowners, but that is what will happen as a result of this policy. In 2022-23, the Conservatives underspent the promised funding to farmers by £227 million and failed to adjust England’s farming budget to keep pace with inflation. Labour’s manifesto made no mention of the agricultural budget, signalling from the outset that this Government do not prioritise protecting our farming industry.
The changes to agricultural taxation in the recent Budget represent yet another blow, threatening the future of small-scale farms and rural communities across the country. While I understand the challenges that the Government face due to the black hole left by the previous Government, they do not excuse the recent decisions to impose such harsh tax burdens on vital industries.
The Government claim that only 27% of farms will be affected by the changes. That equates to 55 farms in Newbury, similar to the number for my hon. Friend the Member for Chichester (Jess Brown-Fuller), but that figure is based on His Majesty’s Revenue and Customs data from 2021-22 and risks significantly under-representing the true impact. The NFU warns that, in reality, around 75% of commercial family farms will exceed the £1 million threshold, making them subject to this tax change. The Liberal Democrats are deeply concerned that this will impact family-run farms, pricing out young farmers from the industry, as well as other rural businesses that rely on the farming economy.
Additionally, over the last week, the Government abruptly paused the capital grant scheme, a crucial resource for funding sustainable farming projects. It is vital to allow farmers to carry on their work, which is essential to public safety, including managing floodwater and storing slurry safely. It is incredibly concerning that the Government have decided to freeze that scheme without warning, and even more concerning given that the Government have made cuts to the basic payment scheme on the basis of expanding environmental grants to farmers. On top of those cuts, farmers have seen their input costs rise sharply in recent years, yet the price they get for their produce at the farm gate has fallen.
I too recently met with farmers in my constituency; during that meeting, one farmer shared that he has worked his land for many years and was looking forward to this year’s being the first ever where he was able to make a profit. He calculated that, effectively, his hourly wage as a farmer is just £6.22 an hour—half the national minimum wage. Another farmer shared that only 15p of every £1 spent on agricultural products actually goes back to farmers, which highlights the tight margins in which they operate. According to Riverford Organic Farmers, 61% of farmers in the United Kingdom fear that they could be out of business in the next 18 months as a result of this Labour Government’s proposal.
Farmers are at the forefront of protecting our natural environment, but it is extremely important that we provide them with the support they need to ensure that they can continue their work. We look to the future of farming; it is vital that the Government do not make the same mistakes as their predecessors and undervalue rural communities.
In conclusion, I urge the Government to raise the farming budget by £1 billion, as outlined in the Lib Dem manifesto, to renegotiate those trade agreements to protect British farmers and to strengthen the Groceries Code Adjudicator to ensure that farmers can keep farming in fair circumstances. It is essential to our country—it is vital—that we protect farmers at all costs. The Government’s proposed changes threaten the future of farming and place undue pressure on this critical industry.
I am proud to represent so many hard-working farmers in Newbury. I, and my Liberal Democrat colleagues, will continue to fight tirelessly to ensure their survival and success for generations to come.
Sir Roger Gale (in the Chair)
I call Dr Neil Hudson for the Opposition. You have five minutes.
Dr Neil Hudson (Epping Forest) (Con)
Thank you, Sir Roger. It is a privilege to serve under your chairmanship. I commend the hon. Member for Upper Bann (Carla Lockhart) for securing this important, forward-looking debate, and for highlighting the challenges facing our farming communities—not least their mental health.
In Parliament today, we have had the biosecurity debate in this Chamber, which I spoke in, the family farm tax debate that has just concluded, and this current debate. Three debates related to farming in one day show how important these issues are to this House, to our constituents and to the farmers who feed us and look after our precious environment.
Perran Moon (Camborne and Redruth) (Lab)
Will the shadow Minister give way?
Dr Hudson
I will not give way, I am afraid.
Hon. Members will all be aware of the ongoing situation with bluetongue virus, avian influenza, bovine TB and other diseases, of threats from outside the UK, from African swine fever to foot and mouth disease, and of the challenges that they pose to our livestock farmers, our economy and our national security. As I said this morning in this Chamber, biosecurity is national security. While I note that the Government have chosen to allocate £208 million for the transformation of the Animal and Plant Health Agency HQ in Weybridge, I urge the Minister to make representations to the Treasury to ensure that that HQ is funded in full. In 2020, the previous Government rightly committed £1.2 billion to start that off, but now we need the further full £1.4 billion to complete that critical national security measure.
It is vital that we also make use of new technologies to further build our national resilience against livestock disease, and to protect human, animal and plant health. The Genetic Technology (Precision Breeding) Act 2023, brought in by the Conservative Government, will help with that, in terms of disease resistance in plants and animals, and climate-resilient crop development. Likewise, wider innovation in machinery, horticulture, farming practices and sustainability are all positive processes.
The elephant in the room today is family farm tax, and we cannot have a debate in which we do not include it.
Dr Hudson
I am not going to give way, I am afraid. That tax hits at the heart of future thinking in farming, taking aim at the bond between farming parents and their sons and daughters, and punishing farming families who have worked their land for generations for acting in the best interest of their children and grandchildren, and of our country by looking after our environment and feeding our nation.
What possible incentive can there be for sustainable, thoughtful farming or for improving the productivity of a field, flock or herd when, after a farmer has passed, the farm will have to be broken up to pay that unfair inheritance tax?
There have also been, as we have heard today, worrying developments in the Government’s approach to capital grants. Those vital lifelines, which make possible the wider environmental objectives of the environmental land management schemes, have for some bizarre reason been suspended by the Labour Government, with no warning or phase-in period. Farmers want to be able to deliver food for our country in an environmentally friendly way, but that will only be possible if the Government of the day, of whatever political colour, is prepared to support them on that journey. The slashing of those grants is another hugely damaging development in relation to future impact on our farmers, which is what we are considering in this debate.
We must clear away the dark clouds of the ill-judged, short-sighted Labour Budget, in particular the heartless family farm tax, which will damage food security, hollow out rural communities and deeply impact the mental health of the people living and working in those sectors. The Government must start listening now. They must reverse this awful tax, and we must help our farmers to see some sunlight on the horizon.
In conclusion, biosecurity is national security. Food security is national security. The Government must start listening and actually look after the communities that nurture those critical factors for our country. I urge them to consider what they are doing and to do the right thing.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)
It is a pleasure to serve under your very crisp chairmanship, Sir Roger. I pay tribute to all hon. and right hon. Members for whittling down what must have been very long speeches into very short, but none the less well-received and well-delivered, speeches.
I thank the hon. Member for Upper Bann (Carla Lockhart), not just for securing this debate but for her work representing her party here in Westminster as a spokesperson on environment, food and rural affairs. She well knows that agriculture is a devolved issue, but we are committed to working closely with devolved Governments as we work to support British farmers and boost the nation’s food security. My colleague Baroness Hayman is in Northern Ireland tomorrow, meeting with large food producers, the Ulster Farmers’ Union and Northern Ireland’s Agriculture Minister.
As the granddaughter of a Fermanagh beef farmer, I too have farming in my blood. The Minister for Food Security and Rural Affairs, my hon. Friend the Member for Cambridge (Daniel Zeichner), has many talents, but he has not yet acquired the skills of cloning himself, so I am here as a pale substitute for him today.
I thank all Members for the comments they have raised. We will never forget that farmers are the beating heart of our great country, and farming and food security is the foundation of a healthy and resilient economy, local community and environment. It is the hard work of our country’s farmers that puts food on the table and stewards our beautiful countryside, which is why, despite the difficult fiscal situation, we are maintaining the total level of Government support to farmers across the UK. For the devolved Governments we are removing the ringfence to respect the devolution settlement, and we are providing the same level of funding in 2025-26 as they are receiving in 2024-25. In England, we have committed £5 billion to the farming budget over two years, including more money than ever for sustainable food production. That enables us to keep momentum on the path to a resilient and more sustainable farming sector.
Environmental land management schemes will remain at the centre of our offer to farmers and nature in England, receiving £1.8 billion in the financial year 2025-26. What is more, we have announced that we will rapidly release £60 million through the farming recovery fund, which will support farmers, including those on family farms, affected by the unprecedented extreme wet weather last winter. Roughly 13,000 farm businesses, including family farms, will receive an exceptional one-off payment to help with severe flooding.
The Government are also investing £208 million to protect the nation from disease outbreaks that threaten the farming industry, our food security and, crucially, human health. All of that is part of the Government’s new deal for farmers. On a UK-wide level, we are working to cut red tape at our borders and get British food exports moving again—protecting farmers from being undercut by shoddy trade deals done by the previous Government. We will lower energy bills for farmers by switching on GB Energy, and introduce grid reform to allow them to plug their renewable energy into the national grid.
We will use Government purchasing power to back British produce so that half of our food in hospitals, Army bases and prisons is locally produced and all certified to high environmental standards. We will introduce a land use framework that balances long-term food security with nature recovery. Critically, we will introduce the first ever cross-Government rural crime strategy to crackdown on antisocial behaviour, fly tipping and GPS theft—a subject on which I have spent many happy hours in the Chamber.
I will address the agricultural property relief changes head-on. There has been a huge range of figures and analysis quoted on all sides. The Treasury’s figures show that 500 estates a year will be affected. That is based on the hard data of actual claims, a figure that is endorsed by the independent Office for Budget Responsibility. It includes the impact of APR, business property relief, nil-rated inheritance allowances, and other capital allowance. The Government have engaged and will continue to engage with the NFU, the CLA, the Tenant Farmers Association, MPs and other stakeholders on the issue. The reforms will not be introduced until April 2026, so there is still time for farmers to plan for the changes and get professional advice on succession planning.
Jim Shannon
My hon. Friend the Member for Upper Bann (Carla Lockhart) and I have both contacted the Ulster Farmers Union in Northern Ireland. We have spoken to John McLenaghan, the legal officer, who told us clearly that 65% of farmers in Northern Ireland will be impacted. With great respect, when I hear his legal opinion and the opinion that the Minister has just referred to, there is a chasm of difference. Somebody is telling porkies—I do not know who it is.
Mary Creagh
With any fiscal change, we look at the previous year’s figures to see what the impact will be. I am not going to get into the analysis around the figures—I want to make some progress. Those figures have been verified by our independent fiscal authority, the OBR.
We know that the current-use rules have been used by wealthy landowners to avoid inheritance tax, and currently the largest estates pay a lower inheritance tax than smaller estates. That is not fair or sustainable.
Perran Moon
Does the Minister agree that it falls to this Government, following the abject failure and economic incompetence of the previous Government, to deal with the rampant speculative acquisition of farmland by closing the tax loophole that has been exploited for too long, and that if the Conservatives really cared about the future of farming, there would be more than one Conservative MP here, with the exception of the shadow Minister and the Chair?
Mary Creagh
I thank my hon. Friend for that intervention, which sets out why the Government are better targeting tax reliefs: to make them fairer and to protect the smallest family farms. We believe that that is a fair and balanced approach that safeguards small family farms, while also fixing the public services that farming families rely on. Those families will be able to pass the family farm down to their children just as previous generations have always done.
I will quickly make a couple of other points. The hon. Member for Upper Bann mentioned Bovaer, the feed additive. We know that agriculture is one of our largest emitting sectors, and we consider that methane-suppressing feed products are an essential tool in the decarbonisation of the agricultural sector. Bovaer was approved by the Food Standards Agency in April 2024 for use in the UK as a feed additive. The authorisation process assessed evidence about animal health, consumer health and environmental safety, and the evidence that was provided to demonstrate the methane reduction efficacy of the product. Bovaer is fully metabolised by the cow and is not present in milk or meat, so there is no consumer exposure to it. I hope that reassures her about Bovaer.
I will also discuss the carbon border adjustment mechanism, which was mentioned by the hon. Member for Chichester (Jess Brown-Fuller). Its introduction, including on imports of specific fertiliser products, was announced by the previous Government in December 2023, but it will not come into force until 2027. It is intended to address carbon leakage, which is the movement of production and emissions from one country to another due to different levels of decarbonisation effort. About 70% of UK agrifood imports come from the EU, and fertiliser used by EU farmers will have already faced a carbon price. Many non-EU imports cannot be produced in the UK, so the Treasury expects that the impact on UK farmers will be modest and that there will be no material impact on food prices.
On capital grants, we have seen an unprecedented demand, and we will continue to process the applications that have already been received and accept new applications for woodland tree health grants. Capital grant plans and management plans are important to help Countryside Stewardship Higher Tier arrangements, protection and—