Small Farms and Family Businesses

Lord Curry of Kirkharle Excerpts

Thursday 12th December 2024 Lords Chamber

[Lord Curry of Kirkharle (CB)]

My Lords, I too very much welcome this debate. Like other speakers, I am indebted to the noble Earl, Lord Leicester, for tabling it. It is a privilege to follow the noble Baroness, Lady Shephard.

I declare my interests. Until six years ago I was a tenant farmer, having started farming in 1971 with very little capital. I mention this because I know what it is like to be under serious financial pressure. I can relate to those thousands of family farms—farmers who are worried, stressed and unsure about the future of their businesses. I know what it is like to lie awake at night knowing that there is not enough cash to pay the bills, having difficult conversations with the bank manager when the overdraft limit is exceeded, having to arrange extended credit and having lots of hire-purchase agreements.

On top of all that, those farmers who demonstrated a couple of weeks ago and came to town yesterday with their tractors have had to contend with the most extreme weather events in history. Many are embracing the change in policy—the transition to ELMS—and finding it incredibly complex and difficult to access. The rules keep changing and the RPA records are unreliable, according to a friend of mine who has been a consultant on environmental schemes for 25 years. He tells me that

“there seems to be a hostile culture within Defra and the RPA to farmers causing worry and stress over tiny details. The SFI is the most complicated scheme yet designed, mostly due to rotational options and multiple schemes on the same farm”.

The previous Government promised that leaving the EU would be a great opportunity to reduce bureaucracy, red tape and complexity. The reverse has happened. In addition, the recent decision by Defra to suspend capital grant applications is causing confusion and concern. A friend of mine has embarked on an arable reversion scheme within the SFI and everything is in place—the crops sown, the field ready and the stock purchased—but he is now unable to get the grant to put the fence up to graze the field. It does not make sense.

Against this background, the Budget decision on inheritance tax has been the final straw. I applaud the Chancellor on achieving a remarkable feat. She has succeeded in completely uniting the entire farming sector: landowners, owner-occupiers, tenants, the NFU, the CLA, the TFA, the NSA, the CAAV and numerous other organisations. The decision to change the rules on APR and BPR demonstrates a complete misunderstanding of the way the countryside is managed and the crucial role of the family farm.

There is confusion about the numbers affected. To take a snapshot of one year, as the Treasury appears to have done, is far too simplistic. The CAAV is quite clear that, over a generation—and that is what we are facing here: the ability of one generation to pass on to the next—75,000 businesses will be affected. This is potentially devastating for farming families.

A lady spoke to me after the demonstration a couple of weeks ago. Her aunt, who is 86, asked whether she thought the assisted dying Bill would be in place next year, because she needs to die next year before the changes to inheritance tax take place. Otherwise, her family will have to sell the farm.

This is a big mistake. The Treasury needs to review the detail. To try to capture those who are investing in land only as a tax shelter is perfectly understandable, but to destroy thousands of family farms in the process is unacceptable. Farmers are not good at succession planning, and many have been advised not to do it. Give them more time to prepare. Raise the limit. Do something to reduce the risk of potential devastation that this Budget will cause.

Incidentally, I feel rather sorry for the Defra ministerial team, as the noble Baroness, Lady Mallalieu, stated. They worked hard before the election to build relationships with farmers and growers with significant success, and the Chancellor has chopped their legs off. Farmers feel undervalued and unsupported. This inheritance tax issue needs to be reviewed.