(3 days, 14 hours ago)
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It is a pleasure to serve under your chairmanship, Dr Murrison. I thank my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) for securing this important debate. We have had valuable contributions from Members across the House. I thank everyone for contributing to this debate on land use and food security, which matters to many of our constituents. May I also use this opportunity to welcome the Minister to her place? I think this is the first time that the two of us have been opposite one another. I would like to work constructively with her as we go forward, to ensure that food security is at the heart of Government policy.
As we all know, land is a finite resource—no one is making any more land—so a national conversation about how we use our land and what use we put it to is crucial. Most importantly, we must ensure that food security is at the heart of that conversation. Right now, as we speak in this Chamber, farmers outside are protesting against the direction in which this Labour Government are taking our food security agenda—most pressingly because of the Budget next week and the issue of the family farm tax, which I will come to. As a result of the choices that the Government have made over the last 16 or so months, we are, quite simply, in a food and farming emergency.
The sustainable farming incentive has been mentioned, but I want to talk to the challenges that many of our farmers are facing to do with cash flow and the cash-flow pressures on our farming businesses. These are the result of the sustainable farming incentive being chopped and the implications of the delinked payments being dramatically reduced to an annual payment of £600 in years six and seven of the transition period. Those dramatically reduced payment rates are having an impact on cash flow. The stopping of capital grants is also having an impact on many of our farming businesses. The end of the fruit and vegetables scheme—it was disbanded with no announcement beyond the end of this calendar year—is also impacting many of our horticultural businesses and has created huge uncertainty for our many farming businesses.
Then there are the taxes announced by the Chancellor, including the dramatic increase in employers’ national insurance and the increase in the minimum wage. That has created a disparity between those on the minimum wage and those wanting to get a bit more, and has imposed a huge additional burden on many of our farming businesses. Business rates relief has been significantly reduced, while the fertiliser tax and the double cab pickup tax have been implemented. Those are all decisions that the Chancellor has made in the last 16 months or so, and which have impacted the cash flow of many of our farming businesses. Banks are now speaking to our farming businesses and wanting certainty that they will be able to service their debt. Why? Because many of our farming businesses have an average rate of return of 1%, if not less—sometimes they do not even break even. They are now therefore struggling to provide certainty to the banks that they will be able to service the debt that they hold.
All that is before we start talking about the family farm tax. Simply reducing a 100% relief on agricultural and business property to a threshold of £1 million will impact every farming or family business across the country. The average size of a farm is about 200 acres. Once we take into account the value of the farm land, the cottage, the growing crops, the stocks in store and the machinery, the value will be well above the £1 million threshold, thereby exposing every farming business to an inheritance tax liability of over 20%—one that they simply will not be able to pay. That is the elephant in the room, which not one of the Labour Members spoke about in their speech, despite this being a debate about food security.
Chris Hinchliff
My constituents have raised many of the concerns that the hon. Member has just described about the proposed changes to agricultural property relief, which I recognise. However, will he say whether his party recognises any of the points that the Government are making about that? Do they accept that some improvement could be made to the previous agricultural property relief? Or would the hon. Member just return it to how it was and not make any changes whatsoever?
Our position on the family farm tax is absolutely clear: the 100% relief on APR and business property relief needs to remain in place. That is why, as the Conservative party, we are absolutely clear that the family farm tax needs to be axed. When we come to the vote on the Finance Bill, I hope that the hon Member will join us on this side of the House and put his words into action by voting against this disastrous tax policy that this Labour Government are bringing about.
It is disappointing that the hon. Member for Cannock Chase (Josh Newbury), despite being the chair of the all-party parliamentary group on UK food security, did not mention the inheritance tax changes once in his contribution.