Small Farms

Baroness Grender Excerpts

Monday 1st December 2025 Lords Chamber

[Lord Katz (Lab)]

Of course, the Government share concern when any farming business closes, which is why we are backing farmers to be more profitable and unlocking the full potential of the rural economy, making sure there is business stability and clarity so that they can invest with confidence. That is why we very much welcome the work that the noble Baroness, Lady Batters, did on profitability. We will align that with other strategies, such as the land use strategy, as we unveil this once-in-a-generation farming road map that should cover the next 25 years of agriculture. It is important to understand that over half of England’s farmland, more than 50,000 farm businesses, are already benefiting from our investment in environmental land management schemes, not just SFI but the Countryside Stewardship and landscape recovery schemes. It is important that we get the balance right between restoring nature and having productive farming.

[Baroness Grender (LD)]

My Lords, will the Minister share with the House any analysis in advance of last week’s Budget to explain how the Government reached the conclusion that freezing income tax thresholds and raising the national living wage and national insurance costs, with only a modest tweak to inheritance tax, will avoid further existential threats to the viability of so many small family farms? If the Minister has that analysis, will he be willing to publish it?

[Lord Katz (Lab)]

I thank the noble Baroness for that question. To be clear, I do not know whether the Treasury has done precisely that analysis, but I can say that at the Budget last week, the Chancellor announced that any unused allowance for the 100% rate of agricultural property relief and business property relief will be transferable between spouses and civil partners from 6 April next year. We have taken this action after listening to feedback from many stakeholders who called strongly for the change to planned reforms to reduce complexity and remove an unfairness for widows and widowers. This change will double the tax-free allowance for agricultural business property available to estates of those widowed before 6 April 2026. It is worth pointing out that almost three-quarters of estates claiming agricultural property relief, including those that also claim business property relief, are not expected to pay more tax as a result of the changes in 2026-27, based on the latest available data.