Clause 1

Roz Savage Excerpts

Monday 12th January 2026 Commons Chamber

It is not just the family farm tax that the Government have beaten up our farmers with; it is also the sudden and unheralded removal of SFI payments last March. Almost a year later, there is still no news of a replacement scheme. Please will the Government move faster to provide a new plan? Farmers urgently need this information as it drives key decisions, and the seasons do not wait.

[Dr Roz Savage (South Cotswolds) (LD)]

The farmers of the South Cotswolds warmly welcome this increase in the threshold—better late than never—but does my hon. Friend agree that this Government need to move beyond not punishing our farmers and instead actively support them in being the stewards of our countryside and protecting our future food security?

[Charlie Maynard]

I very much agree with my hon. Friend.

The Lib Dems welcome the U-turn by the Government in December raising the allowance to £2.5 million and welcome the change announced in the Budget permitting the allowance to be transferable between spouses and civil partners. But as the Chair of the Environment, Food and Rural Affairs Committee, my right hon. Friend the Member for Orkney and Shetland, put it,

“These changes make the policy better, but that is not the same as saying that they make it good.” —[Official Report, 5 January 2026; Vol. 778, c. 30.]

We ask the Government to think again in the following areas. The Treasury estimates that the tax will now raise £300 million by 2029-30, down from £520 million. If the same pro rata reductions applied, less than £100 million will be raised in 2026-27—minuscule against the estimated total tax receipts this year of £1.23 trillion. Professional bodies, such as the Institute of Chartered Accountants in England and Wales, has expressed concern at how administratively burdensome it will be to value assets and calculate potential liabilities, even if there is no tax to pay. How does the revenue forecast to be raised compare with the cost of administering this new policy?

When the Government originally announced the planned changes to APR last year, the Chartered Institute of Taxation also suggested introducing transitional gifting rules to support older farmers who have done the logical thing of hanging on to their land, but who are now faced with penalties for doing so. Can Ministers please look at ways of alleviating some of that burden for older farmers who have not been able to plan ahead for this change? We will be voting against clause 62 because we as a party have consistently voted against the family farm tax and want it scrapped in its entirety.

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[Sarah Dyke (Glastonbury and Somerton) (LD)]

Clause 62 shows that this Labour Government simply do not understand farming communities. Persevering with an ill-thought-through family farm tax that treats business assets as personal wealth, even with the recent concession, will continue to harm investment in food security and rural growth. At the very least, it should be paused entirely until the publication of an independent impact assessment identifying the true extent of the changes to farming livelihoods. I therefore support amendments 42, 43, 44, 45, 46 and 47, the combination of which would ensure that the full inheritance tax relief remained in place for family farms.

It is time that the farming sector moved away from survival mode to become a thriving industry once more, but, against a background of huge cost pressures, farmers are being asked to do more with less. They face input costs that are 30% higher this year than they were in 2020, while the £2.4 billion farming budget has barely changed since 2007. That alone has presented difficult business conditions, but in addition, during 2025 farmers were forced into making plans towards a gloomy future surrounded by all the family farm tax uncertainties. As a result, many have delayed making any investment in their businesses. Farmers such as those in Glastonbury and Somerton are the catalysts of growth in rural areas, but they now need confidence to make the investments that they have put off after 14 months of angst and frustration.

[Dr Savage]

I thank my hon. Friend for her determined and dedicated advocacy on behalf of the farming community, especially around mental health. Although my farmers and I welcome this U-turn, I wonder how much damage has been done, not just to the farming sector directly but to the many businesses that surround the farming sector—the suppliers of equipment, grain and so on. I wonder how much damage has been done to the economy of our country, and how many irrevocable decisions have been made about the future by farmers and others in the farming industry. Does my hon. Friend agree that the Government must get it right this time around?