Autumn Budget 2024
Duke of Wellington Excerpts(1 week, 3 days ago)
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The Duke of Wellington (CB)
My Lords, I declare my agricultural interests as detailed in the register. My concern about the Budget is the effect it will have on small businesses and small farmers. The Budget has put a cap for inheritance tax relief of £1 million for both agriculture and small businesses, or, if the business or the farm is owned by a couple, the cap is effectively £2 million.
The new Secretary of State for Environment, Food and Rural Affairs announced when he was appointed a list of five priorities. The first, which received much approval in this House, was to clean up rivers, lakes and seas. The third priority was to support farmers to boost Britain’s food security. Last Tuesday, on “Farming Today” on Radio 4—I listened again to the clip this morning—he said:
“The wealthiest landowners and the wealthiest people in the sector can afford to contribute more”.
Earlier in the same interview, he said that the new cap was intended to catch the “wealthiest people” buying up land to avoid paying inheritance tax. Everyone will understand that policy, but the question which I hope the Treasury Minister will address when winding up the debate is whether a farmer owning 50 hectares, or a couple owning 100 hectares, are, in the Government’s opinion, sufficiently wealthy to have to pay inheritance tax. By the way, the figures for the 50 and 100 hectares are calculated by the CLA.
During the passage of the Agriculture Bill in 2020, I and others expressed our concerns about the small family farms not receiving enough taxpayer support. Anyone knowing anything about agriculture in this country will understand that farms of 50 or 100 hectares, unless possibly they are horticultural holdings, are difficult to make a living from, although the underlying value of the asset may, on paper, be considerable. This new tax may have the effect of lowering the price of land—which, of course, would be a good thing—but the number of farms bought by investors wishing to reduce their inheritance tax liabilities is, according to the industry, a very small proportion indeed.
So, while the Government through this measure are aiming at relatively wealthy people trying to pay less inheritance tax, in fact they are catching in the net many small to medium-sized farmers who are “strivers”—to use the Chancellor’s word—and hard-working people who do not deserve to be treated in this way by the tax system. Perhaps I might gently suggest to the Minister that he and his colleagues in the Treasury should seriously consider raising the bar from £1 million to possibly £2 million or £3 million. This would, I respectfully advise the Minister, help to achieve greater growth in the rural economy. The removal of tax relief at so low a level can only discourage the investment that is a certain necessity to achieve growth.
To conclude, I hope that the Minister when he winds up can explain how putting a cap on business and agricultural property relief will encourage growth, and how this new tax is falling on the broadest shoulders.
King’s Speech
Duke of Wellington Excerpts(1 year ago)
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The Duke of Wellington (CB)
My Lords, in this very wide-ranging debate this afternoon, I wish to speak about the environment, and in particular the aquatic environment. I had hoped that there might have been a reference in the gracious Speech to the regulation of water companies. Almost every day we read in the newspapers of yet more revolting discharges of sewage into our rivers and on to our beaches. The Environment Act 2021 placed new obligations on water companies to limit such discharges. The Water Services Regulation Authority, Ofwat, and the Environment Agency are taking this matter a great deal more seriously than they did before the passing of that Act, and public awareness and concern have continued to rise. In the local elections last May, it became an important political issue—but the continuing level of discharges is an embarrassment to this country.
Many people rightly question how we could have got ourselves into this shameful situation. There have been suggestions that the water companies should be renationalised. I am personally not in favour of that, but I think we must now accept that, when these regional public service monopolies were privatised, the regulatory structure then created has been found to be inadequate. Any monopoly, particularly of a public service, must necessarily be methodically regulated. Unfortunately, for the water industry this responsibility is split between Ofwat, the financial regulator, and the Environment Agency, the environmental regulator.
The Environment Agency has many responsibilities and monitoring sewage discharges has not in the past been a high priority. I therefore propose to Ministers—and I realise that the noble Baroness, Lady Penn, is a Treasury Minister, and I hope that she will pass this on to her colleagues in Defra—and to the Opposition—I am pleased to see the noble Baroness, Lady Hayman, in her place—that whoever is drafting the next King’s Speech should include an undertaking by His Majesty’s Ministers to introduce legislation to Parliament to place all regulation of water companies in one regulator. I am not aware of any other regulated industry where the responsibility is divided.
In trying to analyse the causes of this dire situation, we see a number of possible reasons. Ofwat may not have been aware of the level of investment required to cope with the enormous increase in wastewater being generated by housebuilding and home improvements. It may not have been aware of the increasing volumes of rainwater being channelled into the sewerage system. Equally, the Environment Agency had not been aware for years of the level of illegal discharges and the degree of investment required to rectify it. I sympathise with officials at both regulators, who are trying to do their jobs. At Ofwat, one hand was tied behind their back, and at the Environment Agency they have been more concerned with other matters, such as floods and flood management.
My request, perhaps to the new Secretary of State, is to allow officials at the Department for Environment, Food and Rural Affairs to study the possible restructuring of water company regulation so as to place it unambiguously with a single regulator. This will probably lead to higher investment, which is absolutely necessary; to lower dividends to water company shareholders, which with hindsight have been too high; and to lower bonuses for management, which have clearly been too high. This is not a glamorous subject. In this green and pleasant land—a phrase used earlier in the excellent maiden speech by the noble Lord, Lord Gascoigne, but worth repeating—we simply cannot go on polluting our rivers and beaches.