Agricultural and Business Property Reliefs: OBR Costing

Lord Whitty Excerpts

Monday 27th January 2025 Lords Chamber

[Lord Livermore (Lab)]

They have been costed jointly at £0.5 billion, as the noble Baroness, Lady McIntosh of Pickering, said.

[Lord Whitty (Lab)]

My Lords, while I am not entirely happy about this policy, I recognise that it has been done and that it will stand. However, I suggest to the Treasury and Defra that, if they are looking for taxation from landowners, they should look at the companies, individuals and institutions buying agricultural land to set against their profits elsewhere—or indeed to greenwash their carbon-creating activities elsewhere—and at those who make a killing from a change of use, rather than directing their tax increases at small family farms.

[Lord Livermore (Lab)]

Just to be clear with my noble friend, we are not doing what he says at the end of his question. I think it is worth revisiting the rationale for this policy in the first place. Of course, the Government recognise the role that reliefs play in supporting farms and small businesses. Importantly, the reliefs will continue to play that role, but the reality is that the full, unlimited exemption, which was introduced in 1992, has become unsustainable. Under the current system, the 100% relief on business and agricultural assets is heavily skewed towards the wealthiest landowners and business owners. According to the latest data from HMRC, 40% of agricultural property relief is claimed by just 7% of estates—that is just 117 estates claiming £219 million of relief. It is neither fair nor sustainable to maintain such a large tax break for such a small number of claimants.