Autumn Budget 2024

Duke of Wellington Excerpts

Monday 11th November 2024 Lords Chamber

[The Duke of Wellington (CB)]

My Lords, I declare my agricultural interests as detailed in the register. My concern about the Budget is the effect it will have on small businesses and small farmers. The Budget has put a cap for inheritance tax relief of £1 million for both agriculture and small businesses, or, if the business or the farm is owned by a couple, the cap is effectively £2 million.

The new Secretary of State for Environment, Food and Rural Affairs announced when he was appointed a list of five priorities. The first, which received much approval in this House, was to clean up rivers, lakes and seas. The third priority was to support farmers to boost Britain’s food security. Last Tuesday, on “Farming Today” on Radio 4—I listened again to the clip this morning—he said:

“The wealthiest landowners and the wealthiest people in the sector can afford to contribute more”.


Earlier in the same interview, he said that the new cap was intended to catch the “wealthiest people” buying up land to avoid paying inheritance tax. Everyone will understand that policy, but the question which I hope the Treasury Minister will address when winding up the debate is whether a farmer owning 50 hectares, or a couple owning 100 hectares, are, in the Government’s opinion, sufficiently wealthy to have to pay inheritance tax. By the way, the figures for the 50 and 100 hectares are calculated by the CLA.

During the passage of the Agriculture Bill in 2020, I and others expressed our concerns about the small family farms not receiving enough taxpayer support. Anyone knowing anything about agriculture in this country will understand that farms of 50 or 100 hectares, unless possibly they are horticultural holdings, are difficult to make a living from, although the underlying value of the asset may, on paper, be considerable. This new tax may have the effect of lowering the price of land—which, of course, would be a good thing—but the number of farms bought by investors wishing to reduce their inheritance tax liabilities is, according to the industry, a very small proportion indeed.

So, while the Government through this measure are aiming at relatively wealthy people trying to pay less inheritance tax, in fact they are catching in the net many small to medium-sized farmers who are “strivers”—to use the Chancellor’s word—and hard-working people who do not deserve to be treated in this way by the tax system. Perhaps I might gently suggest to the Minister that he and his colleagues in the Treasury should seriously consider raising the bar from £1 million to possibly £2 million or £3 million. This would, I respectfully advise the Minister, help to achieve greater growth in the rural economy. The removal of tax relief at so low a level can only discourage the investment that is a certain necessity to achieve growth.

To conclude, I hope that the Minister when he winds up can explain how putting a cap on business and agricultural property relief will encourage growth, and how this new tax is falling on the broadest shoulders.