Farming Families

Baroness Bakewell of Hardington Mandeville Excerpts

Thursday 21st November 2024 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

I congratulate my noble friend Lady Northover on her excellent speech. I have a Riverford box of organic vegetables once a week, including a leaflet with thoughts on farming and the countryside. I have permission to quote from Guy Singh-Watson of Riverford. On 11 November, Guy wrote:

“Should James Dyson (who owns 36,000 acres of land) or Jeremy Clarkson (1000 acres) be the beneficiaries of a tax break designed to help working family farms?


In her budget, Rachel Reeves announced that Agricultural Property Relief (APR) is changing ... Under the new rules, assets above £1m will be taxed at 20% (half the general rate of inheritance tax). This may sound generous – but £1m will buy you about 100 acres, which is far short of a viable farm. If … Reeves’ aim was to close the loophole whereby rich tax dodgers buy up land primarily as a way of passing wealth, tax free, to their children”,


which may result in small farmers going out of business.

“As a second-generation farmer”,


Guy understands,

“the impact of this change. Farming is a long-term business requiring substantial assets that … earn meagre returns. Introducing inheritance tax to our work and planning is a big deal … If Reeves, quite rightly, wants to extract from wealthy landowners some of the £40 billion we need to rebuild our country, here would be a fairer approach. Firstly, a higher threshold on the APR change. In most cases, the smallest commercially viable farm is 300 acres. Taking an average land price of £10k per acre, that would suggest a threshold of £3m before inheritance should be taxed. I can see little reason why those owning land worth more than, say, £7m should not pay the standard rate of 40%. Secondly, where planning permission is granted, land value can increase 10- to 1000-fold – and as long as the owners reinvest in more land, they pay no tax. Reeves could target these capital gains, where the landowner has added no value … Finally, APR is given to all landowners, without differentiating between working farmers and those who are buying up our country mostly to avoid tax. The unintended consequence … has been to inflate land prices, and … exclude new entrants … from farming. Taxation to encourage the sale of such estates could create opportunities for new farmers to buy land and revitalize farming rather than adding to its decline”.

We have had some excellent contributions this afternoon, and I look forward to the Minister’s response.