Small Farms and Family Businesses

Earl of Devon Excerpts

Thursday 12th December 2024 Lords Chamber

[The Earl of Devon (CB)]

My Lords, it is always a privilege to follow the noble Lord, Lord Taylor. It is the season, so I will try to lighten the mood by offering some congratulations. The first is to the noble Baroness, Lady Cumberlege, for her amazing valedictory speech and remarkable career. I live on the west bank of the River Exe and grew up in the shadow of Exminster’s Starcross and Langdon hospitals—mental institutions that she described. She really transformed our community with that work, so I am hugely grateful. I also congratulate the noble Earl, Lord Leicester, for calling such an important debate and gathering such a wise group of heads to address this important issue; and the Minister and the Government, for they have managed to convert London into Paris or the Thames into the Seine. We have Monet at the Courtauld and revolting farmers across the boulevards of our fair city.

I note my interests: I am a farmer in Devon and inherited farmland and a local long-owned family business relatively trouble-free under the previous rules. I am also a lawyer at a law firm, based in the south-west of England and London, that advises numerous rural businesses. I congratulate my partners, who will have an awful lot of work over the next few years advising these poor rural businesses on how to deal with this terrible and very surprising change in the tax regime for rural family businesses. I also congratulate the Government, who achieved something quite notable: the urban population, who do not really know how rural businesses work, were surprised that farmers are so wealthy in assets and did not pay any inheritance tax. This has cast a fresh light upon how our farming and rural businesses work.

There are some good things about this policy. I remember, as a relatively young man, being incredibly disappointed when my father discovered that he could own the family business until death and that that was to his and my benefit. It meant I would not get my hands on the business until very late in life. Speaking seriously, there is a good thing in this policy—I will give the Labour Party some credence here—which is that we will get farms and family businesses into the younger generation’s hands sooner. We have complained for years about flatlining productivity in the rural economy and farming. If we can get these businesses into younger and more ambitious hands sooner, that may be a good thing. However, the way the Government have done it is so cruel.

We have heard from the noble Baroness, Lady Mallalieu, the right reverend Prelate the Bishop of Norwich, and the noble Lord, Lord Curry, about how individual farmers—those in their 70s and 80s, who have planned their lives and their inheritance based on these reliefs—are in an incredibly cruel spot right now. I implore the Government please to think again: they do not need to change the policy, but please soften the impact, as some people are really suffering.

Many other aspects of this Budget are challenging for rural businesses and farmers. The inheritance tax burden is apparently payable over 10 years, but delinked payments for BPS have decreased to £7,600 a year without any notice. No one has mentioned the carbon border tax. Importing fertiliser, which impacts every single piece of food produced in this country, will have £50 a tonne added by 2027. That will impact all of our food production. The increased cost of employment in rural businesses is incredibly cruel too. So please think again. I look forward to the rest of this debate.