Farming and Inheritance Tax

David Smith Excerpts

Wednesday 4th December 2024 Commons Chamber

[David Smith (North Northumberland) (Lab)]

I welcome the opportunity to speak in this debate, and I am grateful that the Conservatives, after many years of ignoring farmers, have finally decided to pay attention to farming and food security.

Farming plays a vital role in the past, present and future of North Northumberland. There are almost 2,000 farms across Northumberland, in my constituency and that of my hon. Friend the Member for Hexham (Joe Morris); each of them proudly and patiently shaped the landscape that we view as quintessentially British, and they play a crucial role in sustaining local communities.

Farmers are good for North Northumberland. Since becoming a Member of Parliament, I have spent a great deal of time meeting them and representing their concerns in Parliament. In fact, my first non-maiden speech was on the virtues and challenges of sheep farming. I have done that because I understand, as the Government do, that farming is central both to the communities I represent and to our way of life in the UK. Put simply, our country cannot flourish without a flourishing farming sector.

Farming has been battered for 14 years under previous Governments. As I was preparing for this debate, I read a recent letter from a farming constituent about a range of difficulties he faces:

“For many years government intervention has always dominated the top of my risk register, due to inconsistent policy and its oft re-enforced reputation as a poor payer.”

It would be convenient for the Conservatives if farmers across the UK were to forget about the past 14 years and blame all the current difficulties on a Government who have been in office for just six months. However, creating a reputation for Government as a “poor payer” and having inconsistent policy takes years, not months.

In July 2023, the Competition and Markets Authority found that the post-2020 squeeze inflicted on our food supply chain was a combination of significant rises in energy, commodity and labour costs, made worse in some cases by adverse movements in the exchange rate. In other words, farmers have been squeezed for years by energy prices, labour costs and a depreciation of the pound, and the previous Government bear some responsibility for all those factors.

In April 2024, the Energy and Climate Intelligence Unit found that since Russia’s invasion of Ukraine, the Government had enacted only three out of 10 policies necessary to improve energy security and bring prices down in the long term, which speaks to years of failure on energy, whether that is selling off gas storage capacity, dodging tough decisions on nuclear or going cool on the urgency of global warming by banning onshore wind. When global energy fluctuated, the lack of long-term preparation left our farmers exposed to rocketing prices.

Another matter I would like to raise is the issue of large retailers at times letting down our farmers. They are able to dominate negotiations around own-label products, and, with 90% of farm-produced vegetables being sold by supermarkets, farmers are stuck in a monopoly position that threatens their business. I urge the Government to do what they can to ensure reliable pricing and supply arrangements can be set between farmers and retailers that benefit our national food security.

There is also the issue of subsidy. We need to get the money out the door to farmers, and make sure they can actually get the funding that they did not get under the previous Government.

I will finish by mentioning another of the issues we have talked about today on APR. There is a need for continued constructive engagement around the recently announced proposed reforms. While every farmer I have spoken to welcomes the proposal to end taxpayer subsidies for the super-wealthy buying up land in order to avoid inheritance tax, I am aware that the Government are facing two competing responsibilities. The first managing the national finances, and the second is ensuring that every community can follow its traditions and dreams. As a farmer recently wrote to me:

“Despite all that was thrown at my father over the years, all he ever wanted to do was farm and he LOVED it. Somehow, it was in his blood.”

I know the Government understand this. I urge the Minister to continue to keep that front and centre as we support the contribution of farmers to our national life. After many years of ineptitude, neglect and the doling out of crumbs by the Conservatives, it must be Labour that truly becomes the party of farming and rural life.