Farming Families

Lord Colgrain Excerpts

Thursday 21st November 2024 Lords Chamber

[Lord Colgrain (Con)]

My Lords, I also thank the noble Baroness, Lady Northover, for bringing this debate. I declare my interests as set out in the register.

The Minister will know that there was no consultation about how the Budget would affect farmers. It is said that the Treasury told Defra only the day before about the APR/BPR changes, which partly explains why they cannot agree between themselves on the figures for affected farms. Both their sets of figures differ from those of the Institute for Fiscal Studies, a more reliable commentator in this instance. In the run-up to the election, the then shadow Minister Steve Reed said consistently that there would be no change to APR. His discomfort was clear when interviewed on television two nights ago after the march, and indeed at the NFU conference this morning.

Those farms that have diversified their holdings, to endeavour to create new income streams away from traditional sources of farming, now find they will be liable for BPR as well as APR reductions. This will be found all the way down the feed chain, from seed and fertiliser suppliers to hauliers and abattoirs—a significant additional burden on an already beleaguered section of the agricultural economy. The capping of BPS for the next year at £7,200 has thrown the cash flows of many farms into disarray. With no indication of how future payments will be calculated for the next two years, it is now impossible for them to realistically forward plan. Self-evidently, both these measures will discourage investment.

Most importantly of all, with reduced investment will come reduced food production. We produce only 60% of foodstuffs in this country as it is, and this will reduce further. With an inflationary budget, interest rates that will stay higher for longer—so the gilt market is telling us—and additional NI and minimum wage costs further curtailing investment, it is difficult to see how this will reflect the Government’s desire to see increased productivity. It will do precisely the opposite.

Mitigations are said to be that the price of land will fall, thus making it easier for new entrants. But what will this do for farmers whose land is collateral for mortgages or bank loans? If land is sold off in small parcels to pay IHT, with the current environmental and woodland schemes in place, it will be bought at enhanced values and taken out of food production. We must ensure that we have a productive, secure and profitable agricultural economy, and this Budget looks designed to undermine all three of these objectives.

Lastly, there has been little mention of the state of our woodlands and how the Budget will bear down on an asset class which, by its very nature, can mean that, for decades, no income will derive from it. Can the Minister please confirm today that the Government will be providing the Forestry Commission with the budgetary resources it needs to meet the targets that it has been set for tree planting by 2025?

I also ask the Minister to take back to the Treasury some suggestions: to apply 100% capital allowances and partnerships to farm buildings, extend the £1 million limit to £3 million, and exempt those farmers who are over 80 on the day of the Budget from the BPR and APR taxes.