Budget: Implications for Farming Communities

Alistair Carmichael Excerpts

Monday 4th November 2024 Commons Chamber

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs if he will make a statement on the implications of the Budget for farming communities.

[The Minister for Food Security and Rural Affairs (Daniel Zeichner)]

I welcome the right hon. Gentleman to his place—he will make an excellent Chair of the Select Committee on Environment, Food and Rural Affairs—and thank him for the opportunity to talk about this important issue.

As the Minister for Food Security, I can assure the House that food security is national security. The Government’s commitment to supporting farmers and rural communities is unwavering. We have committed £5 billion in the agricultural budget over the next two years—the biggest ever budget for sustainable food production and nature recovery in our country’s history. We are also releasing £60 million to support farmers whose farms have been devastated by severe flooding, and investing £208 million to protect the nation from potential disease outbreaks that threaten our farming industry, food security and human health.

However, as we are all only too aware, the Conservatives left behind a £22 billion black hole in our nation’s finances—[Interruption.] Yes, you did. And this Government have had to take tough decisions on tax, welfare and spending to fix the foundations and deliver change, including a series of decisions on tax to protect the payslips of working people. That is possible only by making changes to other taxes, such as agricultural property relief, which was previously available to all agricultural property at a rate of 100%. Currently, small farms can find themselves facing the same levels of tax bills as much larger farms, despite having a much smaller asset. Twenty per cent of agricultural property relief is claimed by the top 2%; 40% is claimed by the top 7%. That is not fair, it is not sustainable, and sadly, it has been used in some cases by wealthy landowners to avoid inheritance tax. That is why the Government have announced plans to reform agricultural property relief.

The Secretary of State met National Farmers Union president Tom Bradshaw this morning. We absolutely understand—[Interruption.]

--- Later in debate ---

[Mr Speaker]

I call the Chair of the Environment, Food and Rural Affairs Committee.

[Mr Carmichael]

I remind the House of my entry in the Register of Members’ Financial Interests.

Thank you, Mr Speaker, for allowing this urgent question. I also thank the Minister for his statement, but I fear that it illustrates rather well some of the lack of understanding that has brought us to this point. More than any other industry, farming relies on stability and long-term planning. That is why many people in the industry relied on undertakings given by the Secretary of State when in opposition that the Labour party in government would not change inheritance tax reliefs for farming.

Every farming business is capital-rich but revenue-poor. Those businesses also trade in a market that has been more heavily influenced by government intervention than any other. Agricultural property relief is not a loophole; it has been a deliberate policy of successive Governments for the past 40 years, designed to avoid the sale and break-up of family farms. Is that still a goal to which this Government adhere? As the NFU put it, the Government have seemingly failed to grasp

“that family farms are not just small farms, and that just because a farm is a valuable asset it doesn’t mean those who work it are wealthy.”

As the Minister will be aware, some of the figures he has just given the House have been vigorously challenged over the past few days, particularly the assertion that only one in four British farms will be affected. Will the Minister and his Treasury colleagues publish the data behind those figures? In particular, does the figure that 73% of farms will not be affected rely on the inclusion of very small holdings?

These changes will have a ripple effect across the whole rural community. Will the Government publish their impact assessment for other rural businesses? Can the Minister also explain why the Treasury has removed the ringfence around farm support to be spent in Scotland, Wales and Northern Ireland? That ringfence was introduced after the Bew review. If it needed a review to introduce it, how can it just be abolished now out of the blue?

The Prime Minister has said in the past, and the Minister has repeated today, that food security is national security. Can the Minister point to one measure in this Budget that makes achieving that aim easier, rather than harder?

[Daniel Zeichner]

I thank the right hon. Member for his questions, which are serious and important, as one would expect. Let me start by pointing out that until 1992, this relief did not exist. The system has existed before and people have operated differently, although I accept it has been different for the past 30 years.

Turning to the figures, I encourage people to reach for the detail—to look at the actual figures. The only thing we can go on is the claims, and the figures coming from the Treasury on claims for the last year available absolutely reflect that 73% figure. The right hon. Gentleman raises an important point about the ringfence; that point is under discussion, but I have made assurances that the devolved Administrations will be closely informed about, and involved in, what happens. These are important points, and they should be treated seriously.

Independent Water Commission

Alistair Carmichael Excerpts

Wednesday 23rd October 2024 Commons Chamber

[Mr Speaker]

We come to the Chair of the Select Committee.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

The Secretary of State is quite right to point to the role of the payment of bonuses and dividends in bringing us to this point, but he must surely acknowledge that that is far from being the whole story. There are a number of business and accounting practices in companies such as Thames Water that have brought us to the stage we are at today. If he is serious about having a water system that is fit for the future, he has to understand properly what has gone on before. Will he therefore confirm that the commission will be properly resourced with the necessary forensic accounting resource, so that those who have been responsible for the most egregious practices in the past and who now seem to be appearing in other water companies around the country will not be allowed to do the same thing there?

[Steve Reed]

I thank the Chair of the Select Committee for the points that he makes. Of course, he is right. The Water (Special Measures) Bill, with its ban on bonuses, will not be sufficient to reset the sector, although it is an ask that the public are rightly making because of the unfairness of people who are overseeing failure being richly rewarded for that failure. That should not have been allowed to go on under the previous Government, and it will not go on under this new Government.

The reason we have set up the commission is to address the very points the right hon. Gentleman makes about financial and environmental sustainability and viability. I look forward to working with him and his Committee as the commission carries out its work, as we review its findings in the summer of next year, and as we then shape what will be significant new legislation to reset the sector—a reformed sector—in a new partnership with Government to bring in the investment that will finally clean up our waterways.

Oral Answers to Questions

Alistair Carmichael Excerpts

Thursday 12th September 2024 Commons Chamber

[Mr Speaker]

I call the Chair of the Environment, Food and Rural Affairs Committee.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Arguably, and in the view of some of us, ours is the finest Select Committee in the House.

The problems with the uptake of ELMS have been at the heart of a significant departmental underspend. No fair-minded individual would blame the current Government for that, but if that money disappears back into the Treasury, never to be seen again on farms, that blame will be attached to the current Government. In opposition, they said that any underspend should be rolled over into future years. Is that still their position in government, and how will they do it?

[Mary Creagh]

I congratulate the right hon. Gentleman on his election to the second best Committee in the House of Commons. We will have to sort that out outside.

There was about a £350 million underspend in the farm budget under the previous Government, who failed on their manifesto pledge to spend £2.4 billion a year on farmers. We are looking at everything as part of the spending review and decisions will be announced in due course.

Sheep Farming

Alistair Carmichael Excerpts

Wednesday 4th September 2024 Westminster Hall

[Joe Morris]

The hon. Member makes a valid point, which takes me back to a conversation about rural crime that I had near Byrness in my constituency. A local farmer told me that when criminals came out, she had to wait 45 to 50 minutes for the police to arrive. I hope that the Government will look carefully at sheep worrying as part of a broader rural crime strategy and I look forward to the Minister’s answer on that.

On trade deals, we must look at the lack of basic oversight and scrutiny in our trade negotiation processes. I know that is not the Minister’s responsibility, but I hope that he will energetically lobby his colleagues at the Department for Business and Trade to make sure that decisions are made with the security of our farmers in mind.

I spoke to farmers who were consistently worried about rising input costs, with the rise in the cost of energy and the rate of inflation biting away at their takings. More than most, farmers have been hit by the chaos inflicted on the country by the mini-Budget and the previous 14 years. They saw their income drop because of the playing field being rigged in favour of producers from other countries who did not have to meet the same welfare and production standards. They also saw big business whittling away at small farmers and able to continually—

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Will the hon. Member give way?

[Joe Morris]

I will finish my sentence and then give way. Farmers saw larger businesses able to continually dictate terms to tenant farmers when it came to selling their produce.

[Mr Carmichael]

I thank the hon. Gentleman for giving way and remind the House of my entry in the Register of Members’ Financial Interests as an owner and operator of farmland on Islay. On the imbalance between the small operators—as people are predominantly in the sheep sector—and the bigger players, one thing that the public sector could do to add a bit of value would be to support the reconstruction of a network of local abattoirs. That is a genuine opportunity to put in place meaningful and direct support for the small farmers and small units that he is talking about.