Farming Families

Baroness Northover Excerpts

Thursday 21st November 2024 Lords Chamber

Asked by

[Baroness Northover]

To ask His Majesty’s Government what steps they are taking to ensure the continuity of farming families.

[Baroness Northover (LD)]

My Lords, I am glad to have secured this debate, but I am sad that it was necessary to do so. I am the daughter of a tenant farmer. My father had always wanted to farm, though he originally trained as an engineer, mending steam engines on the railway—a skill which proved useful in due course with the maintenance of his fourth-hand and fifth-hand farm machinery. He gradually built up 350 acres on the South Downs just below Cissbury in Sussex. Ours was a full-time family farm and around us were many others—a community lying behind the coastal towns.

It was these family farmers whom I thought about when I listened to the Budget. The figure at which IHT was to be applied made no sense to me. Even I knew what seemingly the Treasury did not: small and medium-sized family farms are potentially asset-rich but cash-poor.

The Government might have wished to target those who have been buying agricultural land to avoid IHT. Those landowners will probably find ways around this. Meanwhile, the Government have ended up undermining small and medium-sized family farms—hence the absolute devastation in the farming community at the Budget. I received an email from a farmer whose widowed father, in his 90s, owns the farm. There are simply no spare resources to pay IHT should, as sadly is likely, his father die before seven years have passed. I heard so many similar stories on Tuesday when the farmers gathered in Westminster.

Two Cornish farmers whom I met almost broke down as they told me their stories, just as NFU president Tom Bradshaw did when he was speaking to us in Church House, with sustained applause allowing him to recover. One of the Cornish farmers I met owns 270 acres on the Lizard peninsula. He and his brother actively farm the land, but the farm is owned by their widowed father, who is 94. It was never thought necessary to pass on the ownership of the farm, because it was protected from IHT, as had been established years back with the very intention of preserving family farms. To pay IHT, they would need to sell land, which would make the farm unviable. In the other Cornish case, the farm of 350 acres is owned a widow of 87. Her daughter’s voice broke as she told me that her mother thought she was better off dying before the change comes into effect in April 2026. The debates over assisted dying and the elderly potentially feeling that they are a burden came horribly to mind as I listened to her.

The distress is palpable. Families may have farmed their land for generations, which is why this debate is focused on seeking continuity in farming families. I know from my own extended family how extreme financial pressures in farming can play out. My mother came from a farming family—my father did not—and vowed that she would never be a farmer’s wife. Then she met my father and paid for her engagement ring from her schoolteacher’s salary, as his milk cheque had not yet come through. But a cousin of my mother’s, facing great financial pressure on his mid-Sussex farm, went out one morning with his shotgun and took his own life. His 20 year-old son had to abandon college to come back to run the family farm.

Farmers may love their lives—my father certainly did—but they are people who work all hours, whatever the weather, every day of the year. I remember the 5 am starts to check on lambing ewes and Christmas presents that could not to be opened until my father came in from milking and had had his porridge. I cannot complain. I happily revised for my various exams in the lambing field, reluctant to miss anything. I stacked bales, was an excellent sheepdog, burned fields of straw when that was allowed and knew so much more about my parents’ work and lives than did any of my school friends. But I also recall the endless financial discussions, the loans from the bank and the visits from the bank manager. My father used to say, when we had arable, sheep and beef, that one would be making a loss, another would break even and the third might make a profit—but he would never know which one would be which.

Weather, disease blights, the prices that supermarkets are willing to pay, government policies and global events that drive up the cost of fuel and fertiliser: there are so many aspects over which the farmer has little or no control. But we depend on those farms for food security, and the farmers as custodians of the countryside. Some 60% of our food comes from the UK and Governments have pledged to increase, not reduce, that.

This Budget comes after a series of blows to British agriculture. Brexit damaged farming, undermining our ability to trade into the EU and removing its financial support. The Government promised their own scheme but that has been less, late and complex, so where are we now? I am shocked that the Chancellor has not agreed to meet the NFU. If she is so sure of what she is doing, she should have that confidence. I am shocked that the Treasury did not consult Defra. Will the Minister confirm that the Chancellor will now meet the NFU, and is Defra now fully engaged with the Treasury?

The NFU calculates that 75% of farms are affected, strongly disputing the Treasury’s claim that it is only a quarter. The NFU argues that many agricultural property relief claims would have been alongside business property relief claims, making the APR claim unrepresentative of the total worth of the farm. In addition, the Treasury’s figures are skewed by its inclusion of smallholdings. Nearly 40% of holdings for which APR is claimed in England are under 20 hectares; many of these are not really working farms. Defra’s own figures show that 66% of farms have a net value of over £1 million. If families are unable to pay IHT from their limited resources—the product of a 0.5% return on their capital—they will have to sell their land, thus breaking up farms, which may also have a devastating effect on rural communities.

I have had a sense that the Government have had their fingers in their ears. I hope that this is not true of the Minister. Can she confirm that the Government’s intended targets were not small and medium-sized working family farms? I note that a Defra Minister yesterday gave financial advice to farmers on how to avoid the implications of his own Government’s measures—the irony of that. I know that many Labour MPs now hold rural constituencies. They hear the distress that this sudden policy change is causing.

I understand that this proposal is not in the current Finance Bill. That gives time, I hope, for proper consideration of the policy to be undertaken. Will the Minister accept that a solution must be sought that does not cause further damage to this sector, which has suffered so much in recent years? Farmers may be willing to work long hours in all weathers, for little reward and for the love of that life, but it does not bode well for them, or for our food security, if we pull the rug out from under them. I look forward to the Minister’s response and the contributions of others.