Farming and Inheritance Tax

Debate between John Hayes and Tim Farron

Wednesday 4th December 2024 Commons Chamber

[Tim Farron]

There is something in that, and I will come to that in a moment when I talk about poverty in our countryside, when it just does not look the way people in urban communities think it ought to look.

There is no doubt that family farms are under attack, but this did not start on 4 July, and I want to go through why we have ended up where we are now. The botched transition from the old farm payment scheme to the new one is the principal source of hardship among our farmers. Let us start with the fact that the environmental land management scheme—ELMS—budget saw a £350 million underspend under the last Government, and that was not an accident. It was blindingly obvious that that was going to happen. One hill farmer I spoke to just last month told me that, as a consequence of the transition, he will lose £40,000 a year in basic payment. To replace it, he will gain £14,000 under the sustainable farming incentive. By the way, it cost him £6,000 to go through a land agent in order to get in in the first place.

[Sir John Hayes]

The hon. Gentleman is making a profoundly important point. Not for the first time he is speaking as a Liberal Democrat, but also in a way that belies the fact that he is a Liberal Democrat, because he is genuinely committed to the countryside. He has made a point about family farms; the important thing about them is not only the arguments that he has already advanced, but the sense that they represent a continuum—an investment for the future. The reason this policy is so detrimental is because it impacts on that sense that farmers are investing now for generations to come.

[Tim Farron]

I am going to get to that, but the right hon. Gentleman will have to tolerate me accurately pinning blame on his side before I do so.

We were told by the last Government that they would maintain the amount of funding that we used to spend when we were in the European Union. In England, that was £2.4 billion. In one sense, and one sense only, they kind of kept that promise because it was £2.4 billion throughout that five years. However, they did not spend it, because they phased out the old scheme very rapidly, causing a great hardship, particularly to small family farms, and they brought in the new schemes far too slowly and made it very difficult for people to get into them. By the way, the people who were able to get into the new schemes were the big farmers. They were the landowners who had land agents to help them get into the schemes. So the large landowners with the bigger estates managed to get into those schemes. They are all right, broadly speaking. It is the smaller family farms—the farmers who own their own farms and the tenants—who have struggled.

It is also worth bearing in mind that there has been a little bit of inflation since 2019. The cost of running a farm has gone through the roof when it comes to feed, energy, fuel and all sorts of input costs. So the fact that we are at just £2.4 billion now, as we were five and a bit years ago, is absolute nonsense. It is important also to recognise that the grants that were available under the last Government, and now, are in reality often only available to those who have the cash flow to be able to get them in the first place.