Rural Communities

Sarah Dyke Excerpts

Wednesday 7th January 2026 Commons Chamber

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

It is a pleasure to speak for the Liberal Democrats on this motion. Around 10 million people live in rural areas, and the rural population has been growing faster than the population in urban areas since mid-2020. However, under successive Governments rural communities have largely been viewed as an afterthought in policy, yet rural areas present a wealth of opportunities that need to be optimised. If the Government really want growth, rural areas should and can play their part.

After more than a year of uncertainty and anguish since the 2024 Budget, which threatened to wreck family farms across the country, the Government have partially climbed down on the family farm tax. That concession is down to the sustained campaigning of the thousands of farmers who did not give up and made their voices heard. I know those voices because they are my family members, friends and neighbours. I have stood in solidarity with them as they took precious time away from their farms to attend Westminster rallies in protest at this ill-thought-through policy. For them, this is not a triumph; it has been a hard-fought fight to save their livelihoods, their homes and their futures.

This fight is about justice and security. If we undermine British farmers, we undermine our ability to provide food to feed the nation and to keep us secure in a volatile and uncertain world. Britain is not secure unless food supply is secure.

[Sir John Hayes]

I entirely endorse what the hon. Lady said about the family farm tax and the campaign that was waged against it, which crossed a number of political parties. Will she go further and join the campaign that is raging among the Opposition against the imposition of huge solar plants, pylons and substations on prime agricultural land? Thirty-five per cent of the land in this country is not of that kind; surely those things should go there.

--- Later in debate ---

[Sarah Dyke]

Renewable energy is vital for the future of this country. However, we must ensure that it is put in the right place and is fit for the future. Putting renewable energy on our best and most versatile land certainly is certainly not the way the Liberal Democrats would go about it. However, there are places for renewable energy. I endorse a lot more solar on rooftops. That is certainly something that we can do for the future. I thank the right hon. Gentleman for his intervention.

The impact of the family farm tax has already been felt. Chris, who farms at Wheatlawn farm near Babcary, wrote to me recently. He is a fifth generation farmer with terminal prostate cancer, and he described the family farm tax as a dark “shadow” that has been hanging over him for the past year. He was terrified of leaving his son with a huge, unpayable tax bill. Although the financial burden might be avoided for now, Chris was still keen to point out that what little trust he may have had in the Labour Government has been lost because, in his words, the Labour party simply does not “understand the countryside”. Ministers are fond of saying that British farming is the best in the world, and they are right, but too many of them do not know why. The reason is farmers like Chris and the tradition of family farming in the UK.

Although common sense has finally prevailed, does the Chancellor recognise the damage that this whole dreadful episode has done to the rural economy? When will the Treasury publish an assessment of the impact of this policy on the agricultural sector? While the partial climbdown has limited the damage to the industry, it does not eradicate it entirely. Many farmers will still find themselves facing huge tax bills while operating on narrow profit margins. We Liberal Democrats were the first party to call out and oppose the unfair family farm tax after the disastrous 2024 Budget, and we will continue to stand alongside the farming community and demand that the Government scrap this unfair tax in full. If they refuse, we will submit amendments to the Finance Bill to bring it down.

Alongside producing food, farmers are the guardians of the countryside, but they cannot be green if they are in the red. They are critical to meeting DEFRA’s legally binding targets to reverse nature’s decline, so they need time to adapt and clarity on what to aim for to achieve profitable and nature-friendly farming.

As the Government prepare their new farming road map, we Liberal Democrats encourage them to make it practical, not theoretical. The UK should align with our partners in the EU, who are maintaining direct common agricultural policy payments to farmers until at least 2035. We must ensure that English agriculture is not an outlier, especially given that Scotland, Wales and Northern Ireland are also maintaining an element of direct support. Farmers in England are left with agri-environmental schemes that, under the Labour Government, are no longer comprehensively open to farmers.

This is the first time in 80 years that a Government have not provided support to produce food. That is a Tory policy being continued by Labour. It is absolute madness to disincentivise food production. I hope that today is an opportunity for the Conservatives to apologise for failing to treat food as a public good. We must ensure that British farmers have a fair deal. We can do so by adding an extra £1 billion to the farming budget, guaranteeing high standards in all future trade deals, renegotiating the Australia and New Zealand trade deals, enforcing point-of-origin and point-of-production labelling on animal-derived products, giving the Groceries Code Adjudicator the teeth it needs to protect both customers and producers, and securing frictionless trade with Europe through new veterinary and plant health agreements.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I think it is great that, rather than just criticising the Government, the hon. Lady is outlining a set of policies that the Lib Dems would take forward to support farming communities. What is not clear, however, is how it would all be funded. How much would that list of policies cost, how would it be funded, and what would be the impact on the economy?

[Sarah Dyke]

The Liberal Democrats have set out a number of different policies to help shape that £1 billion investment. Being part of the customs union would certainly be part of that, and it would bring in billions extra, as the hon. Gentleman well knows. There is much more we can do.

Nothing has done more to increase the cost of living and of farming and to reduce farm incomes than the Conservatives’ botched Brexit, which made it more expensive and burdensome for British farmers and fishers to export to their main markets in the EU, beleaguering their workforces and undermining their protections for animal welfare and the environment. The Conservative Government set a dangerous precedent for future trade agreements, given what they negotiated and how they went about it. They stripped away parliamentary scrutiny and forced terrible deals through, which gave unfair advantage to imports from countries with poorer standards over the higher-quality standards of British farmers.

[Cameron Thomas (Tewkesbury) (LD)]

We have heard an awful lot of criticism of the Government’s policies on farming from the Conservatives, but very little mention of the trade deals that they secured with Australia and New Zealand, which have made things so much harder for farmers—we will undoubtedly hear a lot about those from Labour Members. Will my hon. Friend join me in asking the Government to commit to rejecting chlorinated chicken and hormone-treated beef from the United States?

[Sarah Dyke]

As my hon. Friend would expect, I totally agree with him.

The Liberal Democrats want to ensure that British farmers operate on a level playing field and can succeed. That is why last year I introduced the Dairy Products and Dairy Farming Bill. Farm-gate milk prices have plummeted over the past few months; now, cereal prices are also under serious pressure. The Liberal Democrats are clear: we need fairness in the supply chain. When farming businesses fail, there is a knock-on impact on local hospitality—pubs, cafés, restaurants and hotels.

Somerset is a tourism region. It supports nearly 10% of all jobs and contributes more than £1 billion to the regional economy. Many of the fantastic hospitality businesses in Glastonbury and Somerton are under immense pressure as they face huge rates increases from April. Miranda contacted me today. She manages the White Hart pub in Castle Cary, and faces her rateable value going from around £19,000 a year to over £30,000 a year. Meanwhile, the British Institute of Innkeeping states that only one in three pubs are profitable, and warns that that could drop to one in 10 by April.

The hospitality sector already faces £4.5 billion in additional taxes due to increased national insurance contributions in the 2024 Budget. The Liberal Democrats have been calling for an emergency 5% VAT cut for hospitality, accommodation and attraction businesses until April 2027, funded by a new windfall tax on big banks. Combined with our policy to reduce people’s energy bills by removing the main renewables levy, we could put £270 back into people’s pockets, making it more affordable for them to heat their home, and allowing them to spend more on occasional extras. That would help to drive economic growth in rural areas, restore our high streets, and give the country a much-needed morale boost. It would also help rural areas to grow the economy.

[Simon Hoare (North Dorset) (Con)]

Will the hon. Lady give way?

[Sarah Dyke]

I will give way to my honourable neighbour.

[Simon Hoare]

I am grateful to my neighbour for giving way. I share her support for a reduction in VAT for our rural hospitality sector, but does she get the irony that such a reduction would be illegal if we were still a member of the European Union?

[Sarah Dyke]

There are many ironies, but the benefit of being in the European Union far outweighs that cost.

Moving on to homes, to help grow the economy we must ensure that rural areas have places for people to live in. In Somerset, newly built homes make up just 3% of all properties recently sold, with an average price 20% more expensive than the UK average. Rural house prices have increased by 57% since 2013, while wages simply stagnate, creating an affordability gap and contributing to a higher need for affordable housing in rural areas than in urban settings. As a result, many first-time buyers and key workers simply cannot afford to live in rural areas, making it increasingly difficult for rural local businesses to retain staff, reducing local spending power, and threatening the viability of our rural communities.

The Liberal Democrats are clear that both the private and social housing markets are too expensive and insecure, with current provision simply not sufficient to meet demand. People in holiday destinations should not have to face higher rents and housing shortages, especially when they are among the hardest hit by the cost of living crisis. The Tories would offer tax cuts on second homes, making it harder for people who want to live in an area where they work, or where their family is from, to own their own home. That evidences their failure to understand what life is really like in rural areas. As part of a fairer housing system, the Liberal Democrats would allow councils to increase council tax on second homes by up to 500% if there are housing shortages in their area.

The Liberal Democrats believe that the Government must recognise the pressure that they have put on rural communities over the past 18 months, whether it is through the family farm tax, the broken agri-environmental schemes, the lack of support for hospitality or the failure to provide affordable rural homes. We must remember, however, that these are not new problems. The Conservatives failed to make improvements for rural communities, and that is why they were kicked out of huge swathes of the rural south-west.

[Several hon. Members rose—]