Agricultural Property Relief

David Chadwick Excerpts

Tuesday 28th January 2025 Westminster Hall

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank the hon. Member for Caerfyrddin (Ann Davies) for securing this important debate, and I applaud the cross-party work she is doing to ensure that Welsh farmers have a strong voice in this place. We also heard from my hon. Friend the Member for Tiverton and Minehead (Rachel Gilmour), who pointed out the holes in the proposed policy change. I welcome the contribution from my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael), whose voice is so valued by the agricultural community across these isles. He pointed out that there is still time for the Government to engage properly with the sector, and that it is in the public interest to preserve these farms.

Last weekend, a group of farmers came to Llandrindod Wells to show me their accounts. What they wanted to show me was not how much they were making, but how little. Their figures were corroborated by statistics released this month by the Welsh Government, which show that farming incomes have fallen by a staggering 34% across Wales in the last year. The average income now sits at just £22,000, which is perhaps not surprising considering what farmers have had to cope with recently: rising energy costs, runaway fertiliser inflation, supermarkets forcing unfair prices on producers, the transition away from the EU customs union, disastrous Conservative trade deals with Australia and New Zealand, and extra regulations from the Welsh Government. Those are just a few of the issues they are coping with, and we can now add to that the rise in national insurance and the changes to APR and BPR announced in the autumn Budget. Family farms are on the brink.

The people working on our farms in Wales deserve a decent living. Farming is already a tough business, but those figures and challenges highlight how unsustainable the situation is for many families. The Government’s proposed changes to agricultural property relief make things worse by forcing farmers either to sell parts of their land or to make repayments that will wipe out any annual profit. The Government are relying on outdated APR claim figures from 2021-22 and including non-commercial holdings in their calculations, which downplays the policy’s impact. According to NFU Cymru, the number of farms in Wales that will be affected is closer to 75% than the 27% claimed by the Government. If the Government are so confident in their numbers, why will not they release a full impact assessment that includes national breakdowns for Wales and Scotland?

When speaking to people in the sector, it is clear that they know what the impact will be: a further contraction in the rural economy. More young people will be forced to leave farming, placing our food security at risk, driving up food prices and damaging the wider rural economy. The process of rural depopulation will continue, making it harder for local councils to provide services. In Wales, the policy could have a calamitous impact on the Welsh language.

Recently, I visited Llanelwedd primary school, and a nine-year-old pupil asked me about the rising cost of fertiliser. I asked him whether he was going to farm when he grew up, and he looked me in the eye and said, “I am a farmer already.” Yet, under these new policies, this young man may inherit a smaller farm with little profit and fewer opportunities.

Farming is not a typical business, but it is an essential one. In Wales, we have already seen the decline of many industries as a result of political decisions, and I fear that the proposed changes to APR could have the same devastating effect on farming. Who will farm the Welsh countryside? Will it be Welsh farming families who have worked the land for generations, or will it be the super-rich? It is reported that the Government plan to soften the blow for non-doms, but they seem unwilling to listen to the farmers who are the backbone of our rural economy. Our farmers are patriots and servants of the land. Who will feed us when they are gone?

Surely, Ministers must now look again at this policy. It is not just Opposition parties and farming unions that are criticising it, but the Office for Budget Responsibility, supermarkets and even, as of this weekend, the Labour First Minister of Wales. Rural Labour MPs need to stand with them and to pressure the Government to reconsider, and I applaud the hon. Member for Montgomeryshire and Glyndŵr (Steve Witherden) for doing exactly that in this debate.

There are alternatives. Many in my constituency are already asking why Labour is targeting family farms, small businesses and charities for tax rises, while letting big banks, oil companies and tech giants off the hook. That is where the full troughs lie.

APR is not a loophole. As has been mentioned, it was purposefully introduced to protect family farms and safeguard our food security. If the Government want to stop tax evasion, they must work with the farming sector to find a solution that does not punish struggling farmers, because Welsh farmland belongs in Welsh farming hands.