Small Farms and Family Businesses

Lord Rogan Excerpts

Thursday 12th December 2024 Lords Chamber

[Lord Rogan (UUP)]

My Lords, I too congratulate the noble Earl, Lord Leicester, on securing this most timely of debates. It is sometimes said that that the two most important responsibilities of any Government are to keep the nation safe and to ensure that the population is fed. I am sorry to say that the previous Conservative Government failed to properly invest in our Armed Forces over the past 14 years, with the consequences now being laid bare in an increasingly dangerous world. I wish the Labour Government well in their efforts to paper over these cracks.

However, the new Government now stand accused of placing their duty to provide proper food supplies for the nation at risk by seeking to implement a tax rise with what I suspect are unintentional consequences. The Chancellor’s decision to propose an inheritance tax on farms worth over £1 million will affect a small minority of families in rural England, Scotland and Wales, and a significant number in Northern Ireland.

Northern Ireland is a part of the United Kingdom that is particularly resilient, and reliant on farming. Agriculture provides £6 billion to the local Ulster economy. Given the well-documented problems with the Irish Sea border which the Windsor Framework has created—an agreement negotiated by the previous Government but fully supported by the new crop of Ministers—local farmers’ produce is arguably more important to people in Northern Ireland now than ever before. In light of these plain facts, the Government’s ill-advised—and, it would appear, ill-informed—Budget measure has the potential to decimate the Province’s agriculture sector.

UK Ministers have been wheeling statistics over the past few weeks which they claim indicate that the inheritance tax changes will affect only a tiny proportion of farms. However, earlier this week, the Department of Agriculture, Environment and Rural Affairs in Northern Ireland published the results of its own analysis, which the Minister may or may not be aware of. Either way, I will welcome his response when he winds up the debate.

This analysis, which took into account residential property, farm buildings, machinery, livestock and land, found that around half of the 26,000 farms in Northern Ireland could be impacted by the inheritance tax changes that the Government seem determined to drive through. To put that into perspective, as the noble Baroness, Lady Foster, has mentioned, this would account for 80% of farmed land across the province, including 40% to 45% of cattle and sheep farms and around 87% of dairy farms. I pose a simple and straight question to the Minister: based on those official figures from a Northern Ireland executive department, how much damage are this Government prepared to inflict on the Northern Ireland farmers before they accept that they have got this wrong?

Whatever the Chancellor may be trying to achieve, her decisions have badly backfired. Respectfully, I suspect that most in government, particularly those forced to defend the Chancellor’s move, including the noble Lord, Lord Livermore, agree. This Government are still in their early moments of office, and mistakes may inevitably be made while they get to grips with the realities of power. Sadly, the farming tax is one of their biggest mistakes. The correct approach should be to acknowledge the error, scrap the tax and move on. They will get credit for doing so, not least from the beleaguered agricultural community in Northern Ireland.