Future of Farming

Roger Gale Excerpts

Wednesday 4th December 2024 Westminster Hall

[Several hon. Members rose—]

[Sir Roger Gale (in the Chair)]

Order. We have 13 Members wishing to participate and about 24 minutes. I will put on an immediate time limit of two minutes. If you do the maths, you will find that that does not work. There will be a Division at around 5 o’clock, and injury time will be added on. We will see how many Members come back after the Division, and I will reassess the situation, but for the moment, there is a two-minute time limit.

--- Later in debate ---

[Jim Allister (North Antrim) (TUV)]

The hon. Lady says that 50% of those affected are people who invest in land not for farming; is not the answer to put 40% inheritance tax on them and 0% on the real farmers?

[Sir Roger Gale (in the Chair)]

Order. I should have said—I did not, but I will now—that if any Member chooses to intervene, which they are quite entitled to do, I shall treat that as a speech, so they will not get called later in the debate.

[Sarah Smith]

A farming survey shows that the farmers we are speaking about make an average profit of £96,000 per year, which means that even those who are impacted will not be subject to the same level of inheritance tax as many people on similar incomes. They face half the rate of inheritance tax, and through gifting they can avoid that if they undertake the necessary planning. They can of course still protect their farmhouse—that concern is sometimes raised—through the way the system operates. We have to keep coming back to the point that at least 75% of farmers will not be impacted by the measure.

Our Government have an ambitious plan for our farmers. They will invest £2.4 billion in farming next year to focus on sustainable food production and protecting nature. They are getting £60 million out the door through the farming recovery fund and have committed to providing a further £208 million to prevent the collapse of our defences against disease threats—

[Sir Roger Gale (in the Chair)]

Order.

[Alex Easton (North Down) (Ind)]

It is a privilege to serve under your chairmanship, Sir Roger. Well done to the hon. Member for Upper Bann (Carla Lockhart) for securing this debate.

I should be able to set out a vision of optimism and resilience for the future of farming in Northern Ireland today, but sadly that is not the case. It appears that, with the proposed inheritance tax, the Government know neither the price that farming families will have to pay nor the value of their industry. Our UK agricultural heritage is a cornerstone of our economy, culture and communities, and it is critical for our future. The 26,000 farmers and their families in Northern Ireland deserve better. When we take into account the food and drinks processing sector, the proposed measure will affect 70,000 jobs in Northern Ireland.

Northern Ireland’s fertile lands and valuable climate have long supported diverse farming activities, ranging from dairy and beef to crops such as our world-famous potatoes. As we look to the future, the potential for growth and innovation in our agricultural sector is immense. We should be looking at enhancing cutting-edge technologies, such as precision agriculture, drones and sensors, to increase productivity and ensure environmental sustainability. Our hard-working farming community wants to enhance efficiency in order to protect our natural resources for future generations. Our farmers are the true guardians of the countryside, and sustainability is central to their vision. They are dedicated stewards of the land, committed to adopting eco-friendly practices such as crop rotation and organic farming. They are also committed to sustainability.

Farmers’ efforts not only safeguard our environment but open new markets for our produce, meeting the growing global demand for environmentally responsible products. Farming is more than an economic activity: it is the backbone of our communities. The proposed tax will place an undue burden on families, making it difficult for them to pass down their farms to the next generations—

[Sir Roger Gale (in the Chair)]

Order.

[Baggy Shanker (Derby South) (Lab/Co-op)]

Thank you for allowing me to speak under your chairmanship, Sir Roger.

British farmers play a significant role in keeping the nation fed, and they are the custodians of our beautiful countryside. In recognition of their vital role, the Budget is steadfast in its commitment to supporting them. More than £5 billion will be allocated to the farming budget over the next two years to bolster sustainable food production and promote nature’s recovery.

Food security is national security, which is why supporting farmers to feed our nation remains a top priority. To achieve that goal, the Government will leverage their purchasing power to ensure that at least half the food procured for hospitals, military bases and prisons is locally sourced and certified to meet high environmental standards. We have provided £60 million through the farming recovery fund and allocated an additional £208 million to strengthen defences against disease threats. Those are clear examples of a commitment to safeguard farming in the UK. That is what tangible support for British farmers looks like.

Opposition Members can moan, but let us remember that since 2010 more than 12,000 farmers and agriculture companies have been forced out of business. Moreover, trade deals with New Zealand and Australia, brokered by the Conservatives, opened up the UK to meat imports produced to standards so low that they would be illegal in Britain. That is their legacy on British farming. Non-farming investors have dominated land purchases, with over half the farms and estates sold being acquired by non-farmers. Meanwhile, a small number of wealthy landowners have disproportionately benefited—

[Sir Roger Gale (in the Chair)]

Order.

--- Later in debate ---

[Mr Dillon]

I will not give way.

I am sure that Labour Members never expected to vote for small farms to close or to be swallowed up by large landowners, but that is what will happen as a result of this policy. In 2022-23, the Conservatives underspent the promised funding to farmers by £227 million and failed to adjust England’s farming budget to keep pace with inflation. Labour’s manifesto made no mention of the agricultural budget, signalling from the outset that this Government do not prioritise protecting our farming industry.

The changes to agricultural taxation in the recent Budget represent yet another blow, threatening the future of small-scale farms and rural communities across the country. While I understand the challenges that the Government face due to the black hole left by the previous Government, they do not excuse the recent decisions to impose such harsh tax burdens on vital industries.

The Government claim that only 27% of farms will be affected by the changes. That equates to 55 farms in Newbury, similar to the number for my hon. Friend the Member for Chichester (Jess Brown-Fuller), but that figure is based on His Majesty’s Revenue and Customs data from 2021-22 and risks significantly under-representing the true impact. The NFU warns that, in reality, around 75% of commercial family farms will exceed the £1 million threshold, making them subject to this tax change. The Liberal Democrats are deeply concerned that this will impact family-run farms, pricing out young farmers from the industry, as well as other rural businesses that rely on the farming economy.

Additionally, over the last week, the Government abruptly paused the capital grant scheme, a crucial resource for funding sustainable farming projects. It is vital to allow farmers to carry on their work, which is essential to public safety, including managing floodwater and storing slurry safely. It is incredibly concerning that the Government have decided to freeze that scheme without warning, and even more concerning given that the Government have made cuts to the basic payment scheme on the basis of expanding environmental grants to farmers. On top of those cuts, farmers have seen their input costs rise sharply in recent years, yet the price they get for their produce at the farm gate has fallen.

I too recently met with farmers in my constituency; during that meeting, one farmer shared that he has worked his land for many years and was looking forward to this year’s being the first ever where he was able to make a profit. He calculated that, effectively, his hourly wage as a farmer is just £6.22 an hour—half the national minimum wage. Another farmer shared that only 15p of every £1 spent on agricultural products actually goes back to farmers, which highlights the tight margins in which they operate. According to Riverford Organic Farmers, 61% of farmers in the United Kingdom fear that they could be out of business in the next 18 months as a result of this Labour Government’s proposal.

Farmers are at the forefront of protecting our natural environment, but it is extremely important that we provide them with the support they need to ensure that they can continue their work. We look to the future of farming; it is vital that the Government do not make the same mistakes as their predecessors and undervalue rural communities.

In conclusion, I urge the Government to raise the farming budget by £1 billion, as outlined in the Lib Dem manifesto, to renegotiate those trade agreements to protect British farmers and to strengthen the Groceries Code Adjudicator to ensure that farmers can keep farming in fair circumstances. It is essential to our country—it is vital—that we protect farmers at all costs. The Government’s proposed changes threaten the future of farming and place undue pressure on this critical industry.

I am proud to represent so many hard-working farmers in Newbury. I, and my Liberal Democrat colleagues, will continue to fight tirelessly to ensure their survival and success for generations to come.

[Sir Roger Gale (in the Chair)]

I call Dr Neil Hudson for the Opposition. You have five minutes.