Finance (No. 2) Bill

Jess Brown-Fuller Excerpts

Tuesday 16th December 2025 Commons Chamber

[Graham Stuart (Beverley and Holderness) (Con)]

It is a pleasure to take part in this debate and follow the hon. Member for Penrith and Solway (Markus Campbell-Savours), who is rare, as a Member on the Labour Benches, in feeling such commitment to maintaining and fulfilling the promises he made, not least to his farmers.

I will begin by focusing on the farming issue. Too often we look at it in an overall, structural way and make comparisons with other types of inheritance, rather than looking at the specifics of the farming industry. A third of farmers do not make any profit at all, and those who do make profit make very little. Although we do not have exact data, it would appear that well over half of farmers make a 1% return on capital employed or less.

Even if Treasury Ministers do not have any business experience—sadly, Labour Treasury Ministers typically do not—they should at least practice numeracy. If they are numerate, they can work out that if someone makes just 1% return annually on the capital value of their business, it would take 20 years of earnings to pay a 20% tax—and a third of farmers do not make anything at all. How is someone who makes 1% profit going to pay a 20% tax? This is not some freak thing that has just happened; it is consistent.

The Government, to be fair to them, seem to have woken up in one sense. They said, “We must have a new initiative”—I forget what it is called—“to increase the profitability of farmers”. Well, yippidy-doo, well done for that. But should they not increase the profitability of farmers before imposing a tax that, mathematically, arithmetically—whatever other word you want to use—they cannot pay? The truth is that farmers cannot pay it.

More than half of farmers literally do not have the profits to allow them to pay that tax. That simple truth sits at the heart of this. These businesses are prepared to do it because of their lifestyle, personal commitment and love of farming. They do it in order to put food on our plates that is among the highest quality in the world and at costs that are among the lowest in Europe.

The Government could think about this from a public policy point of view too. There are businesses that are prepared to do that—unlike any other business sector I can think of or have ever experienced, or would certainly ever have entertained being part of myself. There are businesses that would take such low returns, work all the hours God gives and bring brilliant food to the tables of people up and down this country at low cost. Why on earth would the Government want to drive the people running those businesses out so that the people they say they want to attack—namely, huge billionaires and vast trust-based businesses—can gobble up those very farms, which are currently run by decent people in our communities who do all that good and ask for very little in return?

[Jess Brown-Fuller (Chichester) (LD)]

The right hon. Member is making an impassioned speech that certainly represents the feeling of farmers in my rural constituency. Does he agree that farmers are also up in arms at these billionaire companies that are ripping small farms out of the system and building their empires? Any time the small family farms do make a profit, they reinvest it straight back into the farm so that they can farm the following year.

[Graham Stuart]

Yes, indeed—and they did. We have seen it. All the evidence is there, and it is happening now, regardless of the argument from Ministers as to what percentage of farms will be affected. We can see it in all the stats. Those stats are available—particularly, I would have hoped, to Treasury Ministers to find out what the real-world impact of this policy is. The real-world impact is that we have seen a drop in investment in the farming industry. That is a disaster.

It may be that the hon. Member for Penrith and Solway is standing alone, but let us look at the enthusiasm on the Labour Benches for the Second Reading of this major Finance Bill that is supposed to be doing such good for the country. There are more than 400 Labour Members, but they are not exactly here to cheer it on. I think they—and, I hope, the Minister—are realising just how counterproductive this is. The one thought I will try to implant above all is those numbers, which mean that it is absurd.

Madam Deputy Speaker, imagine generally being a business owner today, and not necessarily in farming. You hike your way up the mountain to get to success, wading through an eternal shower of tax rises and hacking your way through a jungle of red tape. Then, on your death bed, you are met not first by the grim reaper but by the Chancellor, armed with one final sting: a double tax bill for your children. This is the reality facing family businesses: if the Government cut business property relief next year, that will lead to a double tax bill.

I asked the Exchequer Secretary to the Treasury, who opened the debate, to comment on how that double taxation works. He was unable to respond off the top of his head to my specific numbers, which is entirely understandable, but I hope that the Economic Secretary to the Treasury, armed and perhaps refreshed by the brilliant people in the Box behind her, will be able in summing up to address the specifics of the tax reality for a business faced by the double tax bill that thousands of sons and daughters will receive when their entrepreneurial mum or dad passes away.

From April, the 100% inheritance tax relief that family businesses rely on will be capped at just £1 million; anything above that will be taxed at 20%. Take a small company worth £11 million: the inheritance tax bill alone will be £2 million. But as far as I am aware, the sons and daughters of most entrepreneurs in Beverley and Holderness do not have £2 million tucked away down the back of the sofa. To pay that bill, which is a tax not on the business but on the people who inherit the business, as they are outside the business—I am not sure whether people have focused on this enough—they will be forced to extract that money from the business itself, usually in the form of dividends, and those dividends are taxed at rates approaching 40%. So a £2 million inheritance tax bill becomes a £3.3 million hit on the business, with £2 million to pay the Chancellor and another £1.3 million to pay—oh yes—the Chancellor, simply because the money was invested in jobs, equipment or the business overall rather than left idle.