Autumn Budget 2024

Lord Berkeley of Knighton Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Berkeley of Knighton (CB)]

My Lords, I start with a few notes of welcome to the noble Lord, Lord Booth-Smith.

On the Budget, I was very pleased that the Government have put aside money for the compensation of victims of those outrageous goings-on at the Post Office and to do with infected blood. In fact, to be honest, I felt ashamed to be part of, if you like, the establishment—an establishment that failed to pick up these bills while these poor people suffered so appallingly. I am very pleased that this will be put right.

I am pleased that there will be more teachers, and I hope that will be very much in the arts and music. I am delighted that the Prime Minister plays the flute. But—here is the first but—VAT on specialist schools is going to be a real problem. I ask the Government to look at that particular part of education again. If we have the teachers to create aspirations in things such as the arts, then we need to look to small venues and museums, which at the moment are about to fall by the wayside if they are outside London.

I agree with the Labour Party that the wealthy must do their bit to help those who are less fortunate, but sometimes I think there is a misunderstanding. I could not agree more with my noble friend the Duke of Wellington, who so pointedly showed how the Treasury has a fundamental misunderstanding about the economics of small and medium-sized agriculture. I declare an interest, as I have built up over 40 years, field by field, a farm with a local family, all of whom have to go out and do contract work to make ends meet.

Farms of the kind of size that my noble friend the Duke of Wellington mentioned do not make much money; they hardly make any. What I think has not been understood is that, if you have to sell something like 30 to 50 acres to pay the inheritance tax on a farm of 250 or 300 acres, you are making that farm less viable. It is impossible to make a living off, for example, 100 or 150 acres. You need these bigger farms. Therefore, my noble friend the Duke of Wellington is quite right to ask the Minister to think about raising that cap, because otherwise he will be punishing precisely those he wants to help—those who have less.

We have heard the Opposition Benches agreeing with the Government that it is people that create growth. If we want to help people to create growth, we must not cut the ground from under them. What could happen with this tax, unless this is changed, is that it could kick-start a vicious circle where, in order to pay inheritance tax, part of the farm is sold; the farm then becomes unviable and therefore bigger landowners will snap it up if they can. One farmer said to me, “How much is this going to raise?” I said, “On the Government’s figures, £500 million”. He said, “Well, why don’t they put a penny or two on petrol?” That would solve the problem, without completely ruining a whole level of farming in this country, which is vital.

I can understand why the Government would want to stop people putting millions into land to save inheritance tax. Like my noble friend the Duke of Wellington, I agree that you want to stop that. But surely, as with the winter fuel allowance, the Treasury must be able to come up with formulas that actually mean that the top strata pay but the lower strata do not. I cannot believe it is beyond the wit of man, or woman, in the Treasury to come up with a formula which would tax those who were seeking just to avoid inheritance tax, without punishing those who are working hard every day on the land to provide food for this country. Do we dare risk that?