Farming and Inheritance Tax

Greg Smith Excerpts

Wednesday 4th December 2024 Commons Chamber

[Greg Smith (Mid Buckinghamshire) (Con)]

At Treasury questions yesterday, I raised with the hon. Gentleman the case of Upper Peppershill farm in Long Crendon, a small 380-acre arable farm in my constituency, which the shadow Secretary of State and the Leader of the Opposition visited a few weeks ago. The family have calculated that if they borrow the money to pay this new tax, it will take them 40 years to pay it back. What does the Minister say to the Seed family in Long Crendon about the tax bill they face?

[James Murray]

It is not appropriate for me, as a Minister, to give specific tax advice to one family, but I will talk about the general principles behind our reform. In fact, I was about to begin setting out some of the detail of our policy.

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[Tim Farron (Westmorland and Lonsdale) (LD)]

It is my utter privilege to speak on behalf of my party and 1,500 farmers in Westmorland and Lonsdale. I represent people all the way from the Yorkshire dales and the North Pennines to the Lake District and the Cartmel peninsula.

We are proud of our farmers not just because they feed us and care for our environment, but because they are the stewards of our heritage. When UNESCO awarded the Lake District world heritage site status, it gave as much credit to the farmers as it did to the glaciers that formed the landscape in which we live, which drives a tourism economy with more than 20 million visitors a year. We seriously value our farmers, and they need to hear that, because the tone of the debate—not just today, but over the last few months—has suggested that politicians do not value farmers. However, words are cheap.

[Greg Smith]

I have no doubt about the hon. Gentleman’s personal commitment, but do not the Liberal Democrats have a credibility problem? For all the rhetoric in this Chamber and outside, when they actually get their hands on power in local government, such as in Oxfordshire, they brutally attack their farmers by banning all meat and dairy?

[Tim Farron]

That is nonsense. Wherever Liberal Democrats are in control, we back and support our farmers and are proud to do so.

Talk is cheap, and most people in this House will at some time quite rightly have uttered the sentiment that British farmers are the best in the world, without actually understanding why. It is true that they really are the best in the world, and that is because the way in which our farming economy is structured is based on the family farm. Family farming makes a difference because it has close husbandry, higher environmental standards, higher welfare standards and better quality produce. It is not an accident that British farming is the best in the world.

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[Charlie Dewhirst]

My right hon. Friend is absolutely correct. Farming is a lonely existence at times, and farmers have traditionally suffered from mental health difficulties. This policy is making things far worse, and for small family farms it really is devastating.

As others in the House have said, tenants have not been taken into account in any of this. The impact of business property relief is far greater than any of us have discussed so far, because it does not just relate to farms. It relates to any unquoted business, which could be a local haulier, an abattoir or a feed merchant. All of these—the tapestry of our agricultural economy—are impacted by these measures. It really is a devastating attack on our way of life.

If we take the Treasury’s figures, which show that £500 million will be taken each year by these taxes, that is £500 million that will no longer be spent in the rural economy. For example, a farmer who wants to expand his livestock herd needs to build a new shed, and that means paying a planning consultant, a construction firm, a mechanic and an electrician. It means a greater feed bill for his new livestock, and he has to buy the livestock. All of those things are part of the wider economy. It is not just the farmers who will be hit by this policy; it is everyone in rural communities.

The Secretary of State told us at the Environment, Food and Rural Affairs Committee that it will all be fine because farms, under his tutelage, will become more profitable. The only way to make farms profitable that quickly is by greatly increasing food prices. If we are to go down the route of food inflation and of inflation more widely, then fine, but the Government are going to have to explain that to consumers in the supermarket.

[Greg Smith]

Does my hon. Friend agree that, as part of Labour Members’ total failure to understand the countryside, they probably do not get that farmers are one of the very few sectors that have to buy retail but sell wholesale?

[Charlie Dewhirst]

My hon. Friend is absolutely correct. Farmers are of course price takers, not price setters, and they have always been under great pressure from the retail chain to keep their prices to a minimum, so that we can all enjoy cheaper food. That is a fact of life, and a very difficult challenge.

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[Callum Anderson]

I would be happy to were there not too little time. These investments are about more than money. They represent a vision for a resilient and sustainable future. On the inheritance tax point, the Government’s approach is balanced and fair.

[Greg Smith]

Will the hon. Member give way?

[Callum Anderson]

I will not on this occasion. Just last night, the former Conservative Chancellor Lord Clarke agreed with our approach, saying that he was team Chancellor. He said it was

“a strange exemption…which is why so many rich people buy agricultural land”.

He is not wrong. As others have said, in 2021-22, the top 7% of wealthiest claimants accounted for 40% of the total value of APR, at a cost of £219 million to the taxpayer, as my hon. Friend the Member for Rugby (John Slinger) said. The majority of claimants will not be affected. Couples inheriting farms can still pass up to £3 million tax-free, and any additional assets will be taxed at half the standard rate, with payments spread over 10 years.

This Government are delivering a new deal—a square deal—for farmers, including measures to ensure that British produce is prioritised in Government procurement, that farmers are not undercut by low-welfare imports and that energy costs are reduced through innovative solutions. Our farmers deserve a Government who listen, support and invest in them, and this Government are committed to doing just that.

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[Joe Morris]

I thank the hon. Member for her intervention. She and I must have a slightly different view of a very long time. A few weeks ago is not a very long time for me. I am talking about years in which local farming communities were ignored.

The botched Brexit deal that the Conservative party secured did not do any farmer any favours. Labour is the only party that is genuinely serious about countryside renewal. We cannot pack communities across Northumberland in aspic and pretend that they do not need houses or services. That is why the Conservatives lost. That is why I am here.

[Greg Smith]

Will the hon. Member give way?

[Joe Morris]

I have taken plenty of interventions in a short time.

Ultimately, the Government will be judged on the success of our record and whether we can get the farming budget into the pockets of farmers. I have every faith that the Government and DEFRA will do that. I do not believe that the Conservative party could honestly say that it ever trusted its DEFRA Ministers to do the same.

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[Sam Rushworth]

I will not take any interventions, but only because other colleagues want to get in.

There are concerns, but I must say that when I met farmers in my constituency recently, they agreed with me that a bigger concern for them, as many colleagues have said, is profitability. The motion could have talked about economic stability for lower inflation and interest rates, and it could have talked about cutting rural crime, which would also cut insurance premiums. If I may say so, I welcome the Equipment Theft (Prevention) Act 2023 from the hon. Member for Mid Buckinghamshire (Greg Smith), but there needs to be secondary legislation.

[Greg Smith]

I agree.

[Sam Rushworth]

Thank you. Let us work together.

I am pleased that the Government are defending against floods and disease. I am pleased that we are committed to protecting standards in trade deals. I am pleased that we are committed to getting a veterinary agreement with the EU to cut red tape. I am pleased with the public sector procurement targets. However, we need to do something on rules about food labelling in order to prevent “farmwashing.” We also need to do more to strengthen farmers’ bargaining power with supermarkets. I am pleased with the changes to planning laws that will allow a lot of farmers to invest.

I would just say to my own party and to the Government that we need to bring these forward faster. Farming in my constituency is on life support. There is, in fact, good will towards this Government and what we are trying to do, but we cannot afford to wait another 18 months, particularly for the basic payment scheme transition. We need upland farmers to be able to access the sustainable farming incentives. I know the SFIs are in the pipeline, but they cannot wait 18 months to receive them.

Oral Answers to Questions

Greg Smith Excerpts

Tuesday 3rd December 2024 Commons Chamber

[Mr Speaker]

Order. [Interruption.] No, we are going to have a little talk now, because this is not fair; I have to get all these other Members in. I understand that these are set questions, but questions and answers should be short—it works both ways—otherwise I cannot get Members in and it makes my job impossible. Please work with me.

[Greg Smith (Mid Buckinghamshire) (Con)]

The owners of a 380-acre farm in my constituency have worked out that they would have to spend 40 years paying back the money that they would have to borrow because of the changes to agricultural property relief. When will the Chancellor start listening to farmers rather than hiding behind Treasury figures?

[James Murray]

We are taking an approach that balances significant tax relief for family farms with the need to fix the public finances in as fair a way as possible. The hon. Gentleman will have seen the data that the Treasury has put out, based on claims data from His Majesty’s Revenue and Customs. It shows how few farms will in fact be affected. The measures are a fair and balanced way to fix the public finances, which we desperately needed to do given our inheritance from the Conservative Government.

Oral Answers to Questions

Greg Smith Excerpts

Tuesday 29th October 2024 Commons Chamber

[Emma Reynolds]

The Chancellor launched the landmark pensions review in July, which I am leading and which is looking at measures to drive more UK pension investment into the UK economy, boosting growth but also improving pension savers’ outcomes. I know that there is interest in this agenda across the House.

[Greg Smith (Mid Buckinghamshire) (Con)]

Countryside Alliance research shows that rural households spend up to £800 a year more on fuel than urban households, so further to the question from my hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti), will the Chancellor protect rural communities in the Budget tomorrow?

[Emma Reynolds]

The hon. Gentleman is urging me to comment on the Budget, but he will have to wait until tomorrow.

Oral Answers to Questions

Greg Smith Excerpts

Tuesday 3rd September 2024 Commons Chamber

[Rachel Reeves]

Yes, absolutely; pension credit can be backdated by up to three months, and we will ensure that that happens. We are also working closely with Liverpool city council to ensure that the constituents in Liverpool Wavertree, and indeed in all our constituencies, are getting the support that they entitled to. The poorest pensioners, who are entitled to pension credit, should get it. It is a travesty that 800,000 missed out under the last Conservative Government. We will ensure that pensioners entitled to support get it.

[Greg Smith (Mid Buckinghamshire) (Con)]

T2. It is estimated that the Bank of England will require a further £110 billion of taxpayer subsidy to cover long bond sale losses through to 2030. So why is the Chancellor clobbering pensioners to save £1.5 billion a year when she could be challenging the Bank of England to save tens of billions of pounds a year?

[Rachel Reeves]

Before I became a Member of Parliament I was an economist at the Bank of England and I respect the independence of the Bank of England. The previous Government undermined that independence. That contributed to the economic chaos that we saw under the last Conservative Government. This Government will never go down that route.

Public Spending: Inheritance

Greg Smith Excerpts

Monday 29th July 2024 Commons Chamber

[Rachel Reeves]

I do not believe that any member of the previous Cabinet could not have been aware of the scale of this cover-up and the scale of the overspending. They should hang their heads in shame. Instead of coming to this Chamber today and issuing platitudes, they should have done the right thing and apologised to the country.

[Greg Smith (Mid Buckinghamshire) (Con)]

The Chancellor has made two key political decisions this afternoon: one, to fund extraordinarily high public sector pay increases; and two, to clobber pensioners to pay for it. Will she explain to the House and every pensioner who will lose their winter fuel allowance in the process why she did not challenge the Bank of England on the taxpayer bailouts that it requires, to the tune of tens of billions of pounds, to cover its losses from bond sales?

[Rachel Reeves]

First, it is an extraordinary omission that the previous Government did not set affordability criteria for the independent pay review bodies, which meant that they were able to come back with these recommendations. It would be almost without precedent not to accept recommendations from an independent pay review body. If the hon. Gentleman wants to go to the doctors, nurses, teachers, police officers and those in the armed forces in his constituency and say that they do not deserve a pay increase in line with private sector wages, that is up to him, but I believe that those public sector workers deserve those pay increases.

On pensions and the winter fuel payment, this is not the decision I wanted to make and it is not the decision I expected to make, but we have to make in-year savings, which is incredibly difficult to do. Without doing that, we would put our public finances at risk. We are ensuring that everybody who is entitled to pension credit—the poorest pensioners—continue to get the winter fuel payment, and we will work with the Department for Work and Pensions, local authorities and charities to boost the take-up of pension credit.