Small Farms and Family Businesses
Baroness Mallalieu Excerpts(1 month, 2 weeks ago)
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Baroness Mallalieu (Lab)
My Lords, I thank the noble Earl, Lord Leicester, for initiating this debate. If last night’s Bill goes through, we may lose from this House a number of people who have first-hand knowledge of farming and whose going will leave the countryside immeasurably less well represented in this House.
I declare my interests as president of the Countryside Alliance and as a small livestock farmer on Exmoor—too small to be affected by the APR changes, which I will talk about. We are, I hope, debating the unintended consequences of a government policy that has pitched its figures for those likely to be affected by the changes proposed far too low. Also, it will affect those beyond whom the Government say are the target: tax-dodging non-farmers. In fact, it now catches farms with anything over 200 acres. The blow to them is exceptionally cruel, because it strikes not just at the pockets, as most tax rises do, but at a whole way of life, at people’s families, at their homes and at the futures that they had planned.
The Treasury cannot have intended to put one of my near neighbours, a widower in his late 80s and in poor health, in the position of having to die before April 2026 or leave his son and young family who share the farmhouse with him with a tax bill which his advisers say far exceeds any profit that the farm is likely to make over the next 10 years. There have already been suicides. Most farmers have a gun. I hope that the Treasury is listening, because this is urgent.
I believe the Government know that they have got this one wrong. The question is: how do they get out of the mess? I invite Ministers to sit down and correct me if I am wrong on any of the things that I now say.
Defra has not denied that it was not told about this change until the day before the Budget. Steve Reed, as shadow Environment Secretary, went around the farming groups reassuring them that it was not even “in contemplation”, and I believe he is an honourable man. The industry was not consulted, and it was not just Defra. Where was the rural-proofing to which this Government are committed? I hope the Minister will tell us, if he can, because so many other departments and policies are going to be adversely affected.
Net zero requires investment from the farming industry, yet this policy is a disincentive to invest. What about growth? This policy means a cutback on each owner’s death. Small farmers may be asset-rich, but the money is in the farm, not in the bank, so that means they will have to sell land, and possibly even the whole farm. Surely you do not increase productivity by selling off the means of production.
If the land has to be sold to pay, who will buy it? The noble Earl has made some suggestions. All those people who are likely to buy it will be either industrial livestock farmers, who we condemn abroad, or the environmental groups and charities that will plant trees and rewild or find better ways of using the land to make better returns. Where does that leave us on food security, given that the food strategy which the Government have embraced says we must increase our production?
What about rural unemployment, given not only the wage rises which apply to all employers—national insurance and the minimum wage—but the rampant inflation in the cost of farm inputs? This is the last straw, and a disincentive to farm for the future and take people on.
I am very much afraid that my Government—and I stress “my” Government—have underestimated public affection for family farms. When you turn on the television or the radio, it is there. It is not just Clarkson, there is the Yorkshire Shepherdess, “The Archers” and “Lambing Live”. This rightly is seen as an attack on a way of life which is held in great affection, far beyond the farming community. In the last few weeks, all those trees came down in the storm. Who cut them up and took them off the road first thing so that people could get to work? It was the small, local farmers.
Good will towards my party in the countryside was higher than I have known it for many years at the time of the general election. That is no more. There are over 100 Labour MPs representing rural seats. Good will and trust are essential for the success of any Government, even one with a large majority. It is surely time for the Government to sit down with the agricultural industry and put these figures right.
Autumn Budget 2024
Baroness Mallalieu Excerpts(2 months, 2 weeks ago)
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Baroness Mallalieu (Lab)
My Lords, I congratulate the Minister on his clarity and stamina and the noble Lord, Lord Booth-Smith, on his noteless and apt maiden speech. My five minutes will be devoted to farming and inheritance tax changes. I declare my interests as president of the Countryside Alliance and as having a small livestock farm on Exmoor. It is so small that I do not believe the APR changes will affect me, although they certainly affect a great many in the very rural community from which I come—and will affect all of us, not for the better, if they go through in this form.
On general election day, there was real good will towards the forthcoming Labour Government. Results showed that “It’s time for a change” was a universal feeling throughout the country, including in rural areas. Where there had been only 17 Labour MPs in rural seats during some of the 14 years of the Conservative Administration, there are now more than 100. That good will has, sadly, evaporated very fast. It is hard to be a Labour MP in a farming area right now. There is certainly anger but, perhaps even more, anxiety and a very real fear for the future.
My local livestock market at Cutcombe now has a drop-in centre for mental illness. Before the election, Steve Reed, then the shadow Minister, now the Environment Minister, publicly and privately assured the farming industry that this policy was not even in contemplation. I believe he was honourable in what he said, but that is an indication of how hasty and inadequate the preparation has been for this policy. Since then, there has been no consultation or impact assessment and, as we have heard, there is great confusion over the number of people who will be affected.
I understand why the Chancellor might wish to bring those who had bought farmland to shelter funds from tax with no intention of farming it themselves within the tax threshold; they pushed land prices sky-high. However, this measure pushes the genuine farming family into a position where they will have to sell land, and presumably—I ask the Minister to clarify—in addition to paying inheritance tax, pay capital gains tax on top of that.
This has simply been pitched far too low, and there are many other ways in which those investors could have contributed to the Treasury without pitchforking the very people the Prime Minister promised to protect from tax: working people. It is not just the farmers themselves; it is their employees, contractors, suppliers and customers, and even the local community, of which family farms are so often the cornerstone, who will be affected.
The word “unkind” was used. It is unkind, but I do not think it was deliberate. I think it was inadvertent, because the research had not been done, clearly the consultation had not taken place, and the results of this policy—if it were to go through—were not appreciated. Do we really want to see productive farmland transferred to companies and large-scale agri-businesses, probably to be used for carbon off-setting, greenwashing or large-scale industrial livestock production, or do we want to see that land farmed by people who know it and love it, who produce high-quality local food, and whose work has made our countryside one of our greatest assets?
Henry Dimbleby, in producing the National Food Strategy, said we need to be resilient to withstand global shocks. The next food crisis may well be one not of distribution but supply, and if we reduce our home production, we will all have very good reason to regret this proposal. From every side of the House in this debate so far, there have been calls for the Government to look at this again. How do you increase productivity by forcing people to sell off their means of production? I ask the Minister to take this back and look at it again.