Rural Affairs

Harriet Cross Excerpts

Monday 11th November 2024 Commons Chamber

[Steve Reed]

My hon. Friend is a great champion for his community. I am of course more than happy to meet him and people from his community to discuss those important issues.

The measures in the Budget will enable us to build a stronger, more sustainable future for British agriculture and put in place our new deal for farmers, which includes making the supply chain fairer so that producers are no longer forced to sell their food below the price of production; speeding up planning decisions to help farmers to diversify into new forms of income; seeking a new veterinary agreement—

[Harriet Cross (Gordon and Buchan) (Con)]

Will the Secretary of State give way?

[Steve Reed]

If the hon. Lady will forgive me, I want to make a little progress.

The new deal for farmers includes seeking a new veterinary agreement with the EU to tear down the export barriers that the previous Government erected in the first place; backing British produce by using the Government’s purchasing power to buy British; and protecting our farmers from ever again being undercut by low welfare and low standards in trade deals like the disastrous one the previous Government signed with Australia and New Zealand.

The House is aware that the Government inherited a catastrophic £22 billion black hole in the nation’s finances, meaning we have had to take tough decisions on tax, welfare and spending to protect the payslips of working people. This has required reforms to agricultural property relief. I recognise that many farmers are feeling anxious about the changes; I urge them not to believe every alarming claim or headline and I reassure them that the Government are listening to them. We are committed to ensuring the future of family farms. The vast majority of farmers will not be affected at all by the changes. Let us look at the detail.

[Steve Reed]

If the hon. Gentleman will give me a little time, it is important that I make these points.

Currently, 73% of agricultural property relief claims are less than £1 million. An individual farm owner can pass on up to £1.5 million and a couple can pass on up to £3 million between them to a direct descendant, free of inheritance tax. If a couple who own a farm want to pass it on to a younger relative and one partner predeceases the other, each of them has a £1 million APR threshold that they can pass on. Add those together and that is £2 million, plus the £1 million that a couple with a property can pass on to their children. For most people, that is an effective threshold of up to £3 million to pass on without incurring inheritance tax. Any liability beyond that will be charged at only half the standard inheritance tax rate and payment can be phased over 10 years to make it more affordable. Farmers will be able to pass down their family farm to future generations, just as they always have done.

[Harriet Cross]

Will the Secretary of State tell us where he obtained those figures?

[Steve Reed]

They are from the Treasury and His Majesty’s Revenue and Customs.

Under the previous system, 40% of the value of agricultural property relief went to just 7% of claimants. That is not fair and it is not sustainable. Our reforms will put a stop to wealthy individuals buying up agricultural land to avoid inheritance tax and, in the process of doing that, pricing younger farmers out of buying land for themselves and for their families. As a Farmers Weekly correspondent pointed out,

“prices have been artificially inflated by non-agricultural buyers purchasing land for inheritance tax purposes”,

thereby making it hard for young farmers to set up a family farm. That is correct.

The reforms will protect family farms by closing the loopholes, but they will also help to provide funding for the public services on which families in rural and farming communities rely just as much as anyone else. When Opposition Members say that they would go back to the unfair old system, they also need to tell us which part of the new NHS investment they would cut to pay for it. Like everyone else, farmers and rural communities need a better NHS, affordable housing, good local schools and reliable public transport.

The last Government’s economic failure left Britain with a flatlining economy, broken public services and the worst decade for wage growth since the great depression of the 1930s. Poor public transport meant that people could not get to work, the GP or the hospital when they needed to. Home ownership was out of reach for too many in rural areas. Too few new homes were built, and even fewer that were genuinely affordable. Digital connectivity in rural areas lags behind connectivity in urban areas.

We have to kick-start the economy to build the public services that rural communities need, and to help with that we have secured the biggest budget for sustainable farming and nature in our country’s history. It will help to change farming practices so that we can clean up our rivers, lakes and seas, which the last Government left in such a filthy, polluted state.

--- Later in debate ---

[Harriet Cross (Gordon and Buchan) (Con)]

In my constituency and across the country, family farmers are the custodians of our countryside. For generations, they have contributed to our nation’s food security and land stewardship, provided employment, supported local supply chains, and brought rural communities together. The changes to agricultural property relief—this family farm tax—is the wrong tax aimed at the wrong targets. As we have heard many times, farms, while asset rich, are cash poor. Most farmers do not have hundreds of thousands of pounds of cash available to pay an inheritance tax bill, so they will have to sell the very assets that they use to farm to raise capital.

[The Minister for Food Security and Rural Affairs (Daniel Zeichner)]

indicated dissent.

[Harriet Cross]

The Minister shakes his head, and he has been shaking his head throughout the debate. The issue is this: the Government are not listening to farmers the length and breadth of the country. They are not listening to the National Farmers Union, and they are not listening to the CLA. People who speak for the farming community, people who represent the farming community, are not being listened to, and that is why they are in this position. It does not matter, it seems, how much we say to the Minister, or how much we say what our constituents are saying. The Government are not listening, and they are not willing to listen.

Last Friday, I met members of NFU Scotland’s north-east region. Perhaps the Minister will not listen to this either, but they told me about some matters that they had been concerned about. One was a farmer whose father, aged 90, still owns the land and still farms it. He said to me, “I will have to sell. I thought I had a lifetime of farming ahead of me, but now it turns out that I only have what is left of my father's lifetime.” He did not sound angry; he just sounded broken. Another put it like this: “It is just a waste. Do they”—the Government—“not understand the resource that we have invested into family farms for generations—the skills, health and safety, teaching about husbandry and agronomy? We invest so much more than just money into farms, and this will all be lost. It is just such a waste.”

In their manifesto the Government said that

“food security is national security.”

They reiterated that last week, adding:

“The Government’s commitment to supporting farmers and rural communities is unwavering.”—[Official Report, 4 November 2024; Vol. 756, c. 23.]

However, in the few months since the election, the Government have done nothing to justify those claims. Granting solar farms on prime land, taxing fertiliser, removing the ringfence from the agricultural budgets for Scotland, Wales and Northern Ireland, and making changes to inheritance tax will impact family farms for generations. The Government have missed a key point: it is not words that impress or satisfy our farming communities; it is action, and so far this Government’s actions have let our farmers down.