Rural Affairs Debate
Full Debate: Read Full DebateDepartment: Department for Environment, Food and Rural Affairs
Steve Reed
Main Page: Steve Reed (Labour (Co-op) - Streatham and Croydon North)Department Debates - View all Steve Reed's debates with the Department for Environment, Food and Rural Affairs
Rural Affairs
Steve Reed Excerpts(2 days, 8 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
I beg to move,
That this House has considered rural affairs.
I am delighted that the House has this opportunity to discuss the impact of the Budget on rural communities. Let me begin by addressing what the Budget means for farming in the round. We can all agree that food security is national security, which is why we have secured the biggest budget in our country’s history for sustainable food production and nature’s recovery. It commits £5 billion to the agricultural budget over the next two years. We are continuing all the environmental land management schemes, and investing £1.8 billion into them from 2025-26, which gives farmers the stability they need and lays the foundations for sustainable food production, to protect farmers and the environment for years to come.
Sir Desmond Swayne (New Forest West) (Con)
What estimate has the right hon. Gentleman made of the impact on capital investment, which will be reduced as farmers consider the inheritance tax implications of those investments and adjust their plans accordingly?
Steve Reed
The changes have been signed off by the Office for Budget Responsibility and the full impact assessment will be available when the Finance Bill is published, before they come into force in 2026.
Dr Andrew Murrison (South West Wiltshire) (Con)
Does the Secretary of State understand that a farmer coming towards the end of his career is hardly likely to invest either in improving his land or in the hundreds of thousands of pounds that a piece of agricultural plant costs these days, knowing that there will be a surcharge when, sadly, he deceases?
Steve Reed
The vast majority of farmers will be unaffected by the changes, so that point will not apply.
We are also rapidly releasing £60 million to support farmers whose farms have been devastated by severe flooding. That is £10 million more than the previous Government were offering and, unlike their fantasy figures, we have shown where the money to be paid out will come from. Flooding is just one of the many challenges that farmers have faced over the past year.
Simon Hoare
The Secretary of State has painted the most rosy picture. Why does he think that no one in the farming community can see it or share it?
Steve Reed
I have not had time to paint much of a rosy picture yet, because I have only just started and I am taking quite a lot of interventions, but I hope I can allay the concerns of some farmers in the comments that I hope to make during my speech.
Sir Roger Gale
The right hon. Gentleman referred to the amount of money being made available for flooding. The devastation caused by flooding pales into insignificance compared with the damage that will be done by inheritance tax. This weekend a farmer in my constituency has cancelled the building of a new barn because of it. Park home owners in my area are in despair as a result of what the Budget is doing to them. Does the right hon. Gentleman not understand that?
Steve Reed
The vast majority of farmers will not be affected by the changes to inheritance tax, and I implore the right hon. Gentleman not to underplay the damage caused by flooding. Many farms were absolutely devastated last year, and it will be immensely welcome that we have released £60 million to help farmers to deal with that problem, as well as setting up a flood resilience taskforce to ensure far better co-ordination between the centre and the agencies on the ground, to protect farmers from the devastation of flooding in years to come.
Steve Reed
I said that I had taken my last intervention, but since it is the hon. Gentleman I am happy to give way.
Jim Shannon
I have been inundated with messages from farmers back home. I am a member of the Ulster Farmers’ Union, so I understand the issues clearly. The National Farmers Union here on the mainland has the same point of view. Every one of my neighbours will be impacted, and the Ulster Farmers’ Union estimates that almost every farmer in Northern Ireland will be impacted by the inheritance tax changes. Is the Secretary of State prepared to meet Ulster Farmers’ Union representatives to discuss this matter and understand much better—I say that respectfully—the issue of inheritance tax and what it means to family farms in Northern Ireland? It will destroy them.
Steve Reed
It is very important that we all listen to farmers and farmers’ representatives. Either I, or one of my ministerial colleagues, will make sure that we meet the representatives the hon. Gentleman mentions. I hope that I can allay some of those concerns if I am able to continue my speech, in which I will directly address the issues to which he referred.
As I was saying, flooding is just one of the many challenges that farmers have faced over the last past year. In recent weeks I have met farmers who have been hit by bluetongue in their herds, and I am sorry to say that we have the first recorded case of avian influenza this autumn. Biosecurity threats are real and their impacts even more so, which is why we are investing over £200 million to protect the nation from potential disease outbreaks, including by fixing the defences at our world-leading Weybridge facility that the Conservatives left to fall into disrepair.
Matt Rodda (Reading Central) (Lab)
I commend the Secretary of State’s broad approach. In my constituency there is a serious issue with precious flood plains being speculatively bought by developers, which is causing a huge amount of concern to local residents. It is also an issue in terms of the potential threat to wildlife habitats and of the impact on flooding. Will the Secretary of State consider meeting me and local residents to discuss this important matter?
Steve Reed
My hon. Friend is a great champion for his community. I am of course more than happy to meet him and people from his community to discuss those important issues.
The measures in the Budget will enable us to build a stronger, more sustainable future for British agriculture and put in place our new deal for farmers, which includes making the supply chain fairer so that producers are no longer forced to sell their food below the price of production; speeding up planning decisions to help farmers to diversify into new forms of income; seeking a new veterinary agreement—
Harriet Cross (Gordon and Buchan) (Con)
Will the Secretary of State give way?
Steve Reed
If the hon. Lady will forgive me, I want to make a little progress.
The new deal for farmers includes seeking a new veterinary agreement with the EU to tear down the export barriers that the previous Government erected in the first place; backing British produce by using the Government’s purchasing power to buy British; and protecting our farmers from ever again being undercut by low welfare and low standards in trade deals like the disastrous one the previous Government signed with Australia and New Zealand.
The House is aware that the Government inherited a catastrophic £22 billion black hole in the nation’s finances, meaning we have had to take tough decisions on tax, welfare and spending to protect the payslips of working people. This has required reforms to agricultural property relief. I recognise that many farmers are feeling anxious about the changes; I urge them not to believe every alarming claim or headline and I reassure them that the Government are listening to them. We are committed to ensuring the future of family farms. The vast majority of farmers will not be affected at all by the changes. Let us look at the detail.
Steve Reed
If the hon. Gentleman will give me a little time, it is important that I make these points.
Currently, 73% of agricultural property relief claims are less than £1 million. An individual farm owner can pass on up to £1.5 million and a couple can pass on up to £3 million between them to a direct descendant, free of inheritance tax. If a couple who own a farm want to pass it on to a younger relative and one partner predeceases the other, each of them has a £1 million APR threshold that they can pass on. Add those together and that is £2 million, plus the £1 million that a couple with a property can pass on to their children. For most people, that is an effective threshold of up to £3 million to pass on without incurring inheritance tax. Any liability beyond that will be charged at only half the standard inheritance tax rate and payment can be phased over 10 years to make it more affordable. Farmers will be able to pass down their family farm to future generations, just as they always have done.
Harriet Cross
Will the Secretary of State tell us where he obtained those figures?
Steve Reed
They are from the Treasury and His Majesty’s Revenue and Customs.
Under the previous system, 40% of the value of agricultural property relief went to just 7% of claimants. That is not fair and it is not sustainable. Our reforms will put a stop to wealthy individuals buying up agricultural land to avoid inheritance tax and, in the process of doing that, pricing younger farmers out of buying land for themselves and for their families. As a Farmers Weekly correspondent pointed out,
“prices have been artificially inflated by non-agricultural buyers purchasing land for inheritance tax purposes”,
thereby making it hard for young farmers to set up a family farm. That is correct.
The reforms will protect family farms by closing the loopholes, but they will also help to provide funding for the public services on which families in rural and farming communities rely just as much as anyone else. When Opposition Members say that they would go back to the unfair old system, they also need to tell us which part of the new NHS investment they would cut to pay for it. Like everyone else, farmers and rural communities need a better NHS, affordable housing, good local schools and reliable public transport.
The last Government’s economic failure left Britain with a flatlining economy, broken public services and the worst decade for wage growth since the great depression of the 1930s. Poor public transport meant that people could not get to work, the GP or the hospital when they needed to. Home ownership was out of reach for too many in rural areas. Too few new homes were built, and even fewer that were genuinely affordable. Digital connectivity in rural areas lags behind connectivity in urban areas.
We have to kick-start the economy to build the public services that rural communities need, and to help with that we have secured the biggest budget for sustainable farming and nature in our country’s history. It will help to change farming practices so that we can clean up our rivers, lakes and seas, which the last Government left in such a filthy, polluted state.
Ben Lake (Ceredigion Preseli) (PC)
The Secretary of State mentioned the new set-up for the funding of agriculture and fisheries across the UK. He may be aware of the concern expressed by the Farmers’ Union of Wales, which fears that processing the extra funds through the Barnett formula—as opposed to the previous arrangement, which was a ringfenced addition for the devolved Governments—might bring about a severe reduction in agricultural funding in Wales. Will the Secretary of State please give some reassurance that that is not the case?
Steve Reed
As I have said, the consequentials will work in the way in which they always work. Devolved Administrations have some discretion as to how they will spend the money that is made available to them, but of course I, along with my right hon. Friend the Secretary of State for Northern Ireland, am more than happy to engage with, for instance, the Northern Ireland Department of Agriculture, Environment and Rural Affairs to discuss those points.
The huge investment we have secured in the sustainable farming budget will also help us to move to a zero-waste economy, as we end the throwaway society and reuse materials rather than sending them to landfill.
Steve Reed
No. The hon. Gentleman has already had his chance to ask a question.
The investment will help us to boost food production as we move to models of farming that are not only more environmentally sustainable but more financially sustainable, and it will help nature to recover—here, in what has become one of the most nature-depleted countries on earth, with nearly half our bird species and a quarter of our mammal species now at risk of extinction.
Our plans to upgrade our crumbling water infrastructure will help to bring in tens of billions of pounds of private investment, and will create tens of thousands of well-paid jobs in rural communities throughout the country. We will reform the planning system to build the affordable homes that our rural communities so desperately need, while also protecting our green spaces and precious natural environments. We are investing £2.4 billion over the next two years in the flood defences that the last Government left in such an unacceptable state of decay and disrepair.
Layla Moran (Oxford West and Abingdon) (LD)
I am extremely grateful to the Secretary of State for giving way on the issue of flooding. Anyone would welcome more money, which is desperately needed, but will he comment on the flooding formula? Many inland communities flood, but the Environment Agency continues to say that there is nothing it can do, because the flooding formula says it is not worth doing anything. Frequent flooding of smaller communities matters, too. Is the Department looking at that?
Steve Reed
We are looking at that, and we will be able to make proposals in due course. I know that the hon. Lady will be interested in taking part in a conversation about them when we do.
I am talking about the changes we are making more widely for rural communities. We will open new specialist colleges and reform the apprenticeships levy to help agricultural businesses and farms to upskill their workforce, and we will recruit 8,500 more mental health professionals across the NHS, with a mental health hub in every community to tackle the scourge of mental ill health in our farming and rural communities.
John Glen (Salisbury) (Con)
I welcome what the right hon. Gentleman is saying about mental health, but may I take him back to what he said about the Environment Agency? There is concern about the arbitration over whether Natural England or the Environment Agency has authority. South of Salisbury, in the Avon valley, there is a massive issue. The Environment Agency has done a great deal of work, but there is always a concern that Natural England will come in and overrule it. The arbitration over who is sovereign in such circumstances is a massive issue across the country, and I would be grateful if he could turn his attention to it.
Steve Reed
I am grateful to the right hon. Gentleman for raising that point. I have appointed Dan Corry to lead a review of regulation across the Department for Environment, Food and Rural Affairs, precisely so that we can iron out such anomalies.
I am keen to ensure that we crack down on antisocial behaviour, fly-tipping and GPS theft through the first ever cross-Government rural crime strategy, and we will improve public transport by allowing authorities to take back control of their buses to meet the needs of their communities.
Greg Smith (Mid Buckinghamshire) (Con)
The Secretary of State mentions rural crime, and I do not underestimate the scale of the challenge. In the last Parliament, with Labour’s support, my private Member’s Bill got Royal Assent. It just needs a statutory instrument to be laid before the House to bring in the definition of “forensic marking”, which the police say will be a big power for them in combating rural crime. Will he talk to the Home Secretary to ensure that my Act starts to help him to deliver his rural crime strategy?
Steve Reed
I will convey the hon. Gentleman’s views to my right hon. Friend the Home Secretary.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Will the right hon. Gentleman give way?
Steve Reed
If the right hon. Lady will forgive me, I will conclude my speech, because I have taken an awful lot of time and Members will want to have their say.
Rural communities are at the heart of this Government’s No. 1 mission: to grow the economy. Everyone, regardless of where they grow up, should have the same opportunities to succeed in life. We have had to take tough decisions to fix the broken foundations of our economy, but they are part of a Budget that will restore economic stability and begin a decade of national renewal for everyone, everywhere. I welcome this opportunity to set out the facts and figures, and to show why this Budget offers a better future for our rural and farming communities, as we fix the foundations and rebuild Britain.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.