Farming and Inheritance Tax

Ben Maguire Excerpts

Wednesday 4th December 2024 Commons Chamber

[Tim Farron]

I am going to crack on now and not take any more interventions because, with help from Members on either side, I have already taken up nine minutes of this place’s time.

I want to give the House a final run-through of some of the consequences of the terrible failure of the Conservative Government on farming. In the last five years alone, livestock farm incomes have dropped by 41%. Year on year, there has been a drop in sheep numbers of over 4%, and a 6% annual drop in the number of dairy farms. We lost 440 dairy farms last year alone. So that is where we are, and that is before we get into trade deals or the attack on rural services, healthcare and dentistry. I am also going to quickly make a reference to Brexit because, without a doubt, our leaving the European Union and the terrible deal that the Conservative Government signed us up to have had the biggest impact of all on agriculture.

Madam Deputy Speaker, you would think that the new Labour Government had a massive open goal in front of them, given what they inherited from the Conservatives. They had a massive open goal, with no goalkeeper between the posts, but somehow the ball ended up in row Z. I find it almost impossible to countenance how they have managed to fluff that opportunity.

I want to talk about two people in my constituency who gave me a really useful insight into the family farm tax in the last couple of days. Both of them gave me four separate case studies. The first was a land adviser who talked to me about four farms. Their story was about shrinking businesses as a result of the family farm tax, and about the potential reduction in the value of land, which would mean that they would not be able to invest in their businesses and there would not be the tax yield that the Government were banking on. Another, a local accountant, gave me four anonymised case studies of local family farms in my communities. Of those family farms, only one was earning above the minimum wage, and three were earning significantly below the minimum wage. In those four cases, two would have to sell parts of their farm and two would have to sell their entire farm to pay the inheritance tax.

The next question is: who would those farms be sold to? The hon. Member for Shipley (Anna Dixon) spoke a moment or two ago about the proportion of farmland being sold into private hands, into private equity and so on. Farms will go into those hands even more—as if a neighbouring farmer is going to buy that land when they are in the same predicament.

We are seeing hard-working farmers, on less than the minimum wage, having to sell off their land to private equity. Is that a very Labour thing to do? The hon. Member for Perth and Kinross-shire (Pete Wishart) spoke about Labour not getting the working class in the countryside, and this is a perfect example. It is not too late for Labour to learn.

[Ben Maguire (North Cornwall) (LD)]

It seems clear that, as with the winter fuel allowance changes, the Government have missed their target here. As my hon. Friend rightly says, it seems obvious that large landowners will have the ways and means to avoid this tax. Does he agree that there should be some form of working farm test?

[Tim Farron]

Yes, and the Government should have been thinking about these things. We heard from the Minister that lots of planning and diligence went into this before it came out of the Chancellor’s mouth on Budget day, but it does not feel like it, because there is a whole range of issues that could have been considered in advance.

There is something that will do more immediate harm to farming than even the inheritance tax changes, and that is the Government’s decision to summarily reduce basic payments by 76% in a single year. This will have a direct impact, in particular, on tenant farmers who rely on that money and will end up missing their rent payments. We will see evictions as a consequence.

The Government have trumpeted the £5 billion over two years, which my basic maths tells me is £2.5 billion a year. I am always careful, or nervous, about making confident predictions, particularly in this place, but my confident prediction is that they will not spend that budget. If the basic payments are cut by 76% without the new schemes being up and running to replace them, the Government will not spend that money. By underspending, this Government will end up in the same mess as the last one.