Farming and Inheritance Tax

Tim Farron Excerpts

Wednesday 4th December 2024 Commons Chamber

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is my utter privilege to speak on behalf of my party and 1,500 farmers in Westmorland and Lonsdale. I represent people all the way from the Yorkshire dales and the North Pennines to the Lake District and the Cartmel peninsula.

We are proud of our farmers not just because they feed us and care for our environment, but because they are the stewards of our heritage. When UNESCO awarded the Lake District world heritage site status, it gave as much credit to the farmers as it did to the glaciers that formed the landscape in which we live, which drives a tourism economy with more than 20 million visitors a year. We seriously value our farmers, and they need to hear that, because the tone of the debate—not just today, but over the last few months—has suggested that politicians do not value farmers. However, words are cheap.

[Greg Smith]

I have no doubt about the hon. Gentleman’s personal commitment, but do not the Liberal Democrats have a credibility problem? For all the rhetoric in this Chamber and outside, when they actually get their hands on power in local government, such as in Oxfordshire, they brutally attack their farmers by banning all meat and dairy?

[Tim Farron]

That is nonsense. Wherever Liberal Democrats are in control, we back and support our farmers and are proud to do so.

Talk is cheap, and most people in this House will at some time quite rightly have uttered the sentiment that British farmers are the best in the world, without actually understanding why. It is true that they really are the best in the world, and that is because the way in which our farming economy is structured is based on the family farm. Family farming makes a difference because it has close husbandry, higher environmental standards, higher welfare standards and better quality produce. It is not an accident that British farming is the best in the world.

[Pete Wishart]

Does the hon. Gentleman think that the difficulty with the Labour party is that it just does not understand farmers, because they do not fit neatly into its clumsy definition of what a working person is? These are people who work 12 hours a day, outside in the toughest environment, and who work into their old age, but they do not get into the Labour club.

[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.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

If land prices were to go down, as has been described by the Minister—I am not sure I believe that—and a farmer had borrowed heavily from the bank, the bank might look at the value of their asset and could possibly call in the loan, which would put the farmer out of business right away.

--- Later in debate ---

[Tim Farron]

I have heard that from land agents in my own constituency, and my hon. Friend makes a really interesting point. We obviously do not know what will happen unless and until it happens, but that could be exactly what happens, in which case there would be no money to invest in businesses and people would end up not being able to pay back their loans. Also, the Government would not make anything like the amount of money that they think they are going to, so whatever the outcome, it is bad news for farmers and also for the Exchequer.

It is also worth bearing in mind where the money that the last Government spent has gone. It has gone on landscape recovery and other schemes mostly taken up by very, very large estates, where either smaller farmers got nothing or tenant farmers had to do exactly are they were told. In my part of the world, we have seen something akin to lakeland clearances over the last three or four years as a result of all this. So let us not forget that before 4 July, the farming economy was under enormous threat and in enormous danger, either by accident or design, due to the failures of the previous Government, and the Conservatives need to take that on the chin.

[Anna Dixon]

The hon. Gentleman mentioned tenant farmers, and I know that he will have some in his constituency, as I do in mine in Shipley. Nationwide, a third of all farmland is managed by tenant farmers. Last month, the Department announced the appointment of a new commissioner for the tenant farming sector in England, which I hope that the hon. Gentleman will welcome. Does he agree that the last Government were operating much more in the interests of large landowners than of tenant farmers?

[Tim Farron]

The hon. Lady makes a good reference to the outcome of the Rock review, which took place under the last Government, although they took too long to put those things into practice. I am pleased that this Government have said that they will implement the recommendations of the Rock review. Baroness Rock deserves enormous thanks and praise from all of us for her work defending tenant farmers, and the fact that she has not been replaced is very regrettable. We are talking today about farming and the consequences of the inheritance tax issue. It would have made so much more sense, given the impact on tenants, if the commissioner and their framework had been put in place before this policy was brought into practice. This feels like putting it the wrong way around.

[Several hon. Members rose—]

[Tim Farron]

I am going to crack on now and not take any more interventions because, with help from Members on either side, I have already taken up nine minutes of this place’s time.

I want to give the House a final run-through of some of the consequences of the terrible failure of the Conservative Government on farming. In the last five years alone, livestock farm incomes have dropped by 41%. Year on year, there has been a drop in sheep numbers of over 4%, and a 6% annual drop in the number of dairy farms. We lost 440 dairy farms last year alone. So that is where we are, and that is before we get into trade deals or the attack on rural services, healthcare and dentistry. I am also going to quickly make a reference to Brexit because, without a doubt, our leaving the European Union and the terrible deal that the Conservative Government signed us up to have had the biggest impact of all on agriculture.

Madam Deputy Speaker, you would think that the new Labour Government had a massive open goal in front of them, given what they inherited from the Conservatives. They had a massive open goal, with no goalkeeper between the posts, but somehow the ball ended up in row Z. I find it almost impossible to countenance how they have managed to fluff that opportunity.

I want to talk about two people in my constituency who gave me a really useful insight into the family farm tax in the last couple of days. Both of them gave me four separate case studies. The first was a land adviser who talked to me about four farms. Their story was about shrinking businesses as a result of the family farm tax, and about the potential reduction in the value of land, which would mean that they would not be able to invest in their businesses and there would not be the tax yield that the Government were banking on. Another, a local accountant, gave me four anonymised case studies of local family farms in my communities. Of those family farms, only one was earning above the minimum wage, and three were earning significantly below the minimum wage. In those four cases, two would have to sell parts of their farm and two would have to sell their entire farm to pay the inheritance tax.

The next question is: who would those farms be sold to? The hon. Member for Shipley (Anna Dixon) spoke a moment or two ago about the proportion of farmland being sold into private hands, into private equity and so on. Farms will go into those hands even more—as if a neighbouring farmer is going to buy that land when they are in the same predicament.

We are seeing hard-working farmers, on less than the minimum wage, having to sell off their land to private equity. Is that a very Labour thing to do? The hon. Member for Perth and Kinross-shire (Pete Wishart) spoke about Labour not getting the working class in the countryside, and this is a perfect example. It is not too late for Labour to learn.

[Ben Maguire (North Cornwall) (LD)]

It seems clear that, as with the winter fuel allowance changes, the Government have missed their target here. As my hon. Friend rightly says, it seems obvious that large landowners will have the ways and means to avoid this tax. Does he agree that there should be some form of working farm test?

[Tim Farron]

Yes, and the Government should have been thinking about these things. We heard from the Minister that lots of planning and diligence went into this before it came out of the Chancellor’s mouth on Budget day, but it does not feel like it, because there is a whole range of issues that could have been considered in advance.

There is something that will do more immediate harm to farming than even the inheritance tax changes, and that is the Government’s decision to summarily reduce basic payments by 76% in a single year. This will have a direct impact, in particular, on tenant farmers who rely on that money and will end up missing their rent payments. We will see evictions as a consequence.

The Government have trumpeted the £5 billion over two years, which my basic maths tells me is £2.5 billion a year. I am always careful, or nervous, about making confident predictions, particularly in this place, but my confident prediction is that they will not spend that budget. If the basic payments are cut by 76% without the new schemes being up and running to replace them, the Government will not spend that money. By underspending, this Government will end up in the same mess as the last one.

[Sam Rushworth (Bishop Auckland) (Lab)]

I have huge respect for the hon. Gentleman, my constituency neighbour, but I have a question. I think the hon. Member for North Cornwall (Ben Maguire) suggested a working farm tax, and it was not clear to me whether the hon. Gentleman accepted or rejected that suggestion. We have heard Liberal Democrats talk in recent weeks about land taxes and wealth taxes as alternatives to raise the revenue to fund their many, many spending commitments. Could the hon. Gentleman clarify that point?

[Tim Farron]

To clarify my response to my hon. Friend the Member for North Cornwall (Ben Maguire), the Government could have looked at a working farm exemption so that these people will never have to pay this inheritance tax. Who knows, the Government might consider putting people who are not active farmers under the HMRC microscope instead. That would be far preferable to what we have.

Grant payments are a significant issue. With the cut to basic payments and the Government’s failure to be as quick as they should have been on the new payments, I am pretty confident that we will see an underspend from this Government, just as we did from the last one.

In recent days we have seen the Government’s decision to pause capital grant payments, which will be a huge blow to our farmers. The areas that will end up being cut or paused include: hedging, walling and fencing; countryside stewardship grants to allow nature-friendly farming; work to prevent pollution of waterways; slurry storage; covered yards to clean up our rivers; peatland restoration; carbon storage; and being the cornerstone of natural flood management.

My constituent Matthew, who farms in Eden valley, explained yesterday that he has just finished installing 10,000 metres of fencing for a nature-friendly farming project. The pause in the grant funding means that he will not be able to buy any hedge plants to finish the work, and nor will he get the mid-tier countryside stewardship annual payment. He says:

“Some say it could be paused until June…this is a business-breaking issue.”

On top of that, the higher-level payment has not increased since I entered this House in 2005. It was £40 per hectare for moorland restoration in 2005, and it is £40 per hectare today. That is a brutal attack on hill farmers and those who farm our common land. Again, some of the sustainable farming incentive options on common land are good, and they should be applauded because doing more for nature is a good thing, but the SFI moorland options are currently closed to all common land because of technical issues online. We can see those consequences very clearly.

Among all this, farmers are struggling, often with their mental health. The isolation that people feel when their family have farmed a valley for generations and they might be the one who ends up losing the family farm is utterly devastating. However, farmers just crack on with the job, so our job is to be their voice.

Farming is a glorious vocation. Farmers work to protect our towns and villages from flooding, to promote biodiversity, to back the tourism economy, to tackle climate change, to underpin landscape heritage and to produce our food. The fundamental failure of both the last Government and this one is that they have brought together agricultural policies that actively disincentivise the production of food. That is criminal, and it is foolish. The first thing the Liberal Democrats would put right is a food strategy and an additional £1 billion a year for ELMs to back our family farmers.

It is time we listened to farmers such as Liz and Matthew Staley from near Kirkby Stephen, and their sons Luke and Lewis. I regularly talk to Liz, and she says:

“There is so much anguish out there for farmers.”

On the new schemes, she says:

“They aren’t working and there isn’t that crossover just yet… They’re just making it harder to make a living.”

I want to encourage people on all sides, especially in government, to listen to Liz. It is the vocation of farmers to save our planet and to feed our country. The least we can do is give them the value and the future they deserve.

[Several hon. Members rose—]

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 3rd December 2024 Commons Chamber

[Emma Reynolds]

My hon. Friend has been a tireless campaigner on this issue. We are reforming buy now, pay later, as the Economic Secretary recently stated in answer to my hon. Friend in the House. The Government recognise the gap between those who need debt and those accessing it, which is why the Money and Pensions Service is exploring ways to improve accessibility, including through outreach initiatives. We continue to keep a close eye on its funding levels to ensure that they reflect demand.

[Tim Farron (Westmorland and Lonsdale) (LD)]

The Money and Pensions Service does tremendous work to support people in my constituency who come to surgeries in desperate need—particularly those facing crippling debt—as do organisations such as Christians Against Poverty. Would the Government consider putting more money behind the Money and Pensions Service, not just for staffing but for visibility and presence in local communities? Would they consider the proposal that others have made to make our post offices a shop window for Government services in our communities, including such advice?

[Emma Reynolds]

As the hon. Gentleman knows, the Money and Pensions Service commissions other charities, particularly to work with hard-to-reach vulnerable people. We continue to review its funding and we keep a close eye on the evolving demand and need for its services.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 29th October 2024 Commons Chamber

[Darren Jones]

I thank my hon. Friend for her question. I can confirm that the Budget tomorrow will be an honest assessment of the mess left to this country by the Conservative party, but crucially our plans for clearing up the mess and then delivering the change we promised.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Given that, I assume, everyone in the Chamber has eaten at some point today, do we think that backing Britain’s farmers is a good use of public money, and given that there is a £2.4 billion budget for British farming, which the last Government underspent foolishly, recklessly and carelessly, will the Chief Secretary guarantee that at the very least the farming budget will be protected so that our farmers can carry on looking after our nature and feeding us?

[Darren Jones]

Actually, I did not have breakfast today, so I am looking forward to lunch, and I therefore welcome that short question from the hon. Member. This Government are committed to farming and rural affairs, and to the production of the food that they provide for us, which is important for security of supply as well as, in due course, for my lunch.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 3rd September 2024 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend for her question and welcome her to her place. The regeneration of Stratford after the Olympic games is truly phenomenal, and I know that she will be a strong voice for her constituency and help to deliver the growth mission, which is the No. 1 priority of this new Government. The success of London’s economy will be integral to delivering that mission, and we will work with the Mayor of London, Sadiq Khan, and with our MPs to ensure that economic growth benefits people in the capital and across the country, ensuring that we narrow the gap between rich and poor and also showcase the huge opportunities that London has on the international stage. We will be hosting an international investment summit in London on 14 October, bringing together some of the biggest global investors in the world, to showcase everything our great country has to offer.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Investment in our rural economy must focus heavily on rewarding our farmers for the food they produce and the environment they protect. The last Government ringfenced £2.4 billion a year for England to support our farming sector. Through indifference or incompetence, they underspent by £100 million last year and betrayed our farmers in doing so. Will the Chancellor confirm to me, my farmers and this House that she will not bake in that underspend, which was the fault of the last Conservative Government, and that she will at least commit to ringfencing what is already invested in farming? If not, hopefully she will back the Liberal Democrats’ call to back £1 billion extra into farming so that we can feed our—

[Mr Speaker]

Order. Mr Farron, please do not take complete advantage. I think you have slightly strayed from the original question. Chancellor, if you want to have a go at it, by all means do so, but I will understand if you do not.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 19th March 2024 Commons Chamber

[Jeremy Hunt]

No one knows more about high-end TV than my hon. Friend. Whoever said that politics is showbusiness for ugly people was absolutely wrong in his case. I will take away what he says and consider high-end television as a potential future Budget measure.

[Tim Farron (Westmorland and Lonsdale) (LD)]

The Chancellor will be aware of the award-winning film “The Windermere Children”, which talks about the legacy of those Jewish children who survived the death camps in central Europe and made a new life for themselves on the banks of Lake Windermere at Troutbeck Bridge. For the last several years, there has been an ongoing exhibition on their legacy at Windermere library, and now we look to build a lasting memorial alongside a rebuilt Lakes School at Troutbeck Bridge.

Will the Chancellor be interested in meeting the families of the Windermere children, and those behind the new build and the provision of a new lasting memorial to their legacy, at Windermere at some point in the foreseeable future?

Budget Resolutions

Tim Farron Excerpts

Tuesday 12th March 2024 Commons Chamber

[Laura Trott]

I am going to make a bit of progress.

Sadly, the Labour party is putting this in jeopardy. Labour Members have no plan to cut taxes, and cannot name a single one that they would cut. Instead, they are trying to pull the wool over the public’s eyes by pretending that they have refinanced their £28 billion a year plan to decarbonise. They themselves have said that their pledge costs £28 billion a year, and they are apparently not scaling their promises down. We all know what that means: more taxes for hard-working families. What the public and the House need to know is this: which tax will they raise to pay for the plan, and, if they are in government after the general election, will they stick to our spending plans as set out in the Budget? The British public deserve to know.

During this Parliament, total departmental spending has increased by 3.2% a year in real terms, and day-to-day departmental spending will grow at an average of 1% a year in real terms beyond the current spending review period. The Government are protecting the record increase in capital spending over this Parliament, which will deliver about £600 billion of public sector investment over the next five years. As announced in the Budget, we are also committing an additional £2.5 billion for the NHS in England in 2024-25, protecting day-to-day funding levels in real terms.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Is the Minister aware that thousands of people in this country would love to work and be productive, but cannot because they are living with cancer? Cancer is not only a threat to people’s life, but it also limits their ability to earn a living. I am sure that she is aware that a third of people diagnosed with cancer wait two months for their first intervention that will help to cure them. Is there any room in the capital spending that she set out for large-scale investment in radiotherapy, as suggested by the all-party parliamentary group for radiotherapy? That would help to cure people more quickly and in a more targeted way, so that there is no collateral damage, and people can go back to work much sooner.

[Laura Trott]

I praise the hon. Gentleman for the work that he has done on this very important issue, and I know that the capital we are providing will help with issues such as the one he has highlighted.

We cannot just put more money into public services and hope for the best. I was delighted to read that the hon. Member for Bristol North West (Darren Jones) said recently that he was in favour of reforming public services, not splurging on them. Well, here’s hoping that the Labour party breaks the habit of a lifetime. I genuinely hope that he will agree with some of the measures on productivity that we have set out today, because outcomes are determined by how things are done. By focusing on outcomes, not funding, we can deliver real value for the taxpayer. It is a trap to think that simply spending more buys us better public services. Simply spending more is also not sustainable.

--- Later in debate ---

[Darren Jones]

I thank my hon. Friend for her intervention, which I think reflects the mood of the public. When Conservative Ministers stand up and say that we have never had it so good, people at home look at their payslip and their bank balance and realise that is not the case.

Let us now turn to the delusion of this Budget being a so-called long-term plan for growth. The independent evidence is clear: this will be the worst Parliament on record for living standards. It is the only Parliament where living standards have fallen instead of risen, with real pay having gone up by only £17 a week under the Conservatives, compared with £183 a week under the last Labour Government, as my hon. Friend has just pointed out. The Chancellor could not bring himself to say the R-word, but the Budget documents confirm that, despite 22 Budgets or statements from successive Conservative Chancellors over these past 14 years in which they promised they would get the economy growing, we are now in recession—a recession that for working people has been felt for some time.

We have had seven quarters of downgraded growth per person extended by a further downgrade in the Budget last week. That is the longest period of stagnation since the 1950s, with an economy that has shrunk on a per capita basis since the Prime Minister took office and overall GDP forecast to increase only because of a dependence on migrant labour. That is quite the record for a Conservative party that promised to reduce migration and get the economy growing.

[Tim Farron]

The issue in rural communities such as mine is that growth is being hampered, despite there being demand, because hospitality and tourism businesses do not have a big enough workforce to support it. In the Lakes, 63% of hospitality businesses are not at capacity because they do not have the staff. Part of that is a result of silly visa rules, so will he look at those again? The other reason is the lack of affordable housing for local families. Would he allow local authorities, and give them the finance, to once again build social rented homes, so that we have enough homes to enable people to work in communities such as ours?

[Darren Jones]

The hon. Member is right. What we need is a country that creates the opportunities and jobs for people who need them in the areas in which they live, whether that is about affordable housing, delivering transport infrastructure on time and on budget—something the Conservative party seems unable to do—or ensuring workers have access to skills and training so that they can take the jobs available in their local communities. The Conservatives have consistently failed on those measures, which is why they are so dependent on migrant labour to keep the economy above a recessionary level in the Budget forecasts.

Turning to the denial of the Conservative party, its £46 billion a year plan to abolish national insurance contributions altogether is an irresponsible, unfunded, massive spending commitment without a plan to pay for it. The public rightly look to their national insurance contributions as the bedrock of our welfare state, where working people and their employers all contribute towards funding our national health service and the state pension. It was originally designed as an insurance to give people the financial help they needed during illness and unemployment.

Given the Conservatives’ pledge—confirmed again across the Dispatch Box today—to abolish national insurance altogether, without a plan to pay for the £46 billion annual cost, what do they propose to cut? Will it be funding for our GPs, driving patients to pay for private health care? Will it be the right to be seen in the local hospital? Maybe they will cut support towards the cost of social care, or end incapacity benefit or jobseeker’s allowance. Maybe there would even be a reduction in the state pension itself. What is it? The public have a right to know—[Interruption.] I will happily give way to an intervention from Ministers if they can tell us how they are going to fund their £46 billion tax cut. There are no interventions.

The Conservatives must answer this question. After their previous Prime Minister and their previous Chancellor crashed the economy through a £45 billion tax cut, they are now celebrating the latest form of a £46 billion tax cut. How will it be funded? Surely not through higher taxes or higher borrowing, given that both are at record highs already.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 6th February 2024 Commons Chamber

[Tim Farron (Westmorland and Lonsdale) (LD)]

The original Treasury impact statement for the loan charge stated that it would have no material impact on

“family formation, stability or breakdown”,

yet there have been countless divorces, family break-ups, mental health breakdowns and bankruptcies, and at least 10 suicides. That impact statement was grossly wrong, but also surely negligent. We now need a full investigation, including how and why Parliament was so misled over the dangerous and unfair loan charge.

[Nigel Huddleston]

I hear the House’s concern about this issue, on which we had a debate not so long ago. Of course, the suicides the hon. Gentleman mentions concern us, and independent reviews have taken place. However, I want to provide the House and anybody listening with reassurance that the best thing to do if people have concerns is to engage with HMRC, because very generous and long-term plans can be put in place to help people to repay. As I said, there are fears out there—there is a bit of scaremongering—that homes are being taken over or people are having to give up pensions. That is not the case. Engagement with HMRC to establish reasonable time to pay would therefore be reassuring for many of the people who fear much worse consequences. My appeal is to engage with HMRC.

Hospitality Sector: Fiscal Support

Tim Farron Excerpts

Wednesday 31st January 2024 Westminster Hall

[Tim Farron (Westmorland and Lonsdale) (LD)]

I will see whether I can follow that! I am grateful to serve under your guidance, Ms Bardell. The hon. Member for Stirling (Alyn Smith) has done this place a great service by introducing this hugely significant issue.

One of the privileges of living among the lakes and dales of Westmorland is that we get to share our breathtaking landscapes with the world. We are a world heritage site and are Britain’s biggest visitor destination after London. We are the place where 20 million people each year come to spend their leisure time, actively or passively absorbing creation in the raw. Those 20 million visitors create a tourism and hospitality economy with a value getting on for £4 billion a year. With 60,000 people working in it, the sector is Cumbria’s biggest employer—across the UK it is the fourth biggest—yet it is so often overlooked. Because its interests are never closely tied to a single Department, it tends to fall between the gaps, and so do its interests.

This is a time when we cannot afford to overlook our tourism and hospitality sector or ignore its voice. Although domestic visitor numbers have not been bad over the past year or so, those visitors are not spending as much as they used to, on the whole, because of the obvious impact of the cost of living crisis. To put it bluntly, as people are now paying £400 a month more on mortgage payments thanks to the 2022 Budget, they do not have spare money to spend in the pubs and restaurants of the Lake district. There is a real need to support our hospitality and tourism economy in Cumbria through prudent and effective measures.

VAT rates for hospitality are significantly higher in this country than in the rest of Europe. The nature of tourism and hospitality is that our competitors are overseas, so this unfair playing field is a self-imposed penalty on our economy. Even a small reduction in VAT to 12.5% for tourism and hospitality would give the Treasury a net fiscal gain of £4.6 billion over 10 years. The Government are desperately thrashing around for even the merest whiff of a Brexit benefit, and here is one staring us in the face. The question is: will the Government do it? How about looking at a tax-free shopping scheme for international visitors? According to UKinbound, launching a new VAT reclaim scheme would generate £4.4 billion over two years for the UK economy, with a net benefit to the Treasury of £1.3 billion.

To support our visitors, to continue to be an attractive destination and to ensure we are fair to our local communities, we also need funding for our local infrastructure. The fact is that our councils, our health service and our police service are not fairly funded to take account of the impact of our huge visitor numbers. Some 85% of our visitors come by car, adding to the wear and tear on our roads, yet it is local people who have to bear the brunt through council tax. The Government should amend their funding formula to end that unfairness. There would be no need for any talk of tourism taxes if the Government funded us properly.

One thing the Government did that we are very grateful for, as we campaigned for it for many years, was allowing our councils to double the council tax on second homes. Indeed, I think I mentioned it in my maiden speech. Yet the Government’s lack of urgency and failure to get their act together has meant that councils are not allowed to do so until 2025, even though it was expected to happen this April. That will cost Westmorland and Furness Council £10 million and will hit our spending power and our local communities. I add my voice to those that say that business rates, temporary cuts and short-term reductions are all welcome, but they do not help our businesses to plan in the long term. There needs to be radical, long-term action, and it needs to happen now.

We have talked about several parts of the hospitality industry, including our pubs, which are so important. For many lakes and dales villages, the pub is the only community asset left. It has been a pleasure to work alongside the community in Orton recently to try to ensure a long-term future for the George hotel. We want our communities to have more power to retain their pubs, and we need to support publicans by reducing their costs and their taxes, so that their pubs can continue to be the hub and the centre of our local communities.

I mentioned that 85% of our visitors come by car. It does not need to be that way. If we introduced the possibility of a passing loop at Burneside to the Lakes line to Windermere, we would effectively double the capacity of that line and could bring so many more people to the lakes by rail.

The No. 1 issue that businesses throughout Cumbria face in hospitality and tourism is that our workforce is far too small. I am told by 63% of hospitality businesses in Cumbria that they are operating below capacity because they do not have a big enough workforce to meet demand. There are two fundamental reasons for that.

First, the Government have failed to act to counter the collapse of the long-term rented market into Airbnb properties. We have seen an eviction—a Lakeland clearance—of local people who could work not just in hospitality and tourism but in care, education, health and other sectors. The Government promised to bring in a separate category of planning use for short-term lets, but they have failed to do so and have let my community down in the process.

Secondly, our visa rules are ludicrous, short-sighted and impractical. We need to put chefs on the long-term shortage occupation list. Some 80% of the workforce living in the Lake district are already working in hospitality and tourism. We have lakes, yes, but no overwhelming reservoir of untapped talent. What we need is homes for local people, a local workforce and a visa scheme that allows us to bring in the people we need to serve our 20 million visitors.

I really hope that the Minister will listen and bring in the action we need. All we ask is that he back a sector that will boost our economy to the tune of billions, if we only have the ambition to listen to and back our local businesses.

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[John Nicolson]

And that would certainly have been repetition; we all know the rules of “Just a Minute”—in fact, some of us have even been invited to be on it. If I may continue, I was about to highlight the new Labour policy of allowing bankers to keep tens of millions in bonuses.

The one subject that everybody in the hospitality sector wants to talk about is Brexit, and what a disaster it has been. The Gleneagles Hotel in my constituency is world famous, but it cannot get enough staff post-Brexit and so cannot operate at full capacity. Harvesters cannot get enough people to pick fruit and other crops. A cheese manufacturer in my constituency fears that they will have to lay off staff because one of their ingredient suppliers in France does not want to do the mountains of post-Brexit paperwork; it is simply not cost-effective.

The Glenturret distillery has stopped exporting to several European Union countries because the post-Brexit labelling rules are too cumbersome and expensive. It has told me that it sometimes now takes longer to get whisky to Paris than to Japan. This is the Tories’ Brexit dividend. And what of Labour? Well, it is now up to its oxters in Brexit Kool-Aid, too. The Labour leader tells us there is “no case” for rejoining the EU. Try telling that to young Scottish voters or to businesses in my constituency.

I am glad that this debate has been brought forward by my SNP friend and colleague, my hon. Friend the Member for Stirling (Alyn Smith). I am glad that Humza Yousaf spent so much time with entrepreneurs in my constituency. I thank all the businesses in Alloa and elsewhere for giving me their thoughts so that I could bring them here to the Westminster Parliament. The Minister, a friend of mine from our days on the Digital, Culture, Media and Sport Committee, is an expert in this field. He cares deeply about it, is knowledgeable about it and was passionately anti-Brexit; he warned wisely and accurately of its dangers, and I know that he will be listening carefully.

[Tim Farron]

It will be no surprise to the hon. Gentleman that I kind of agree with him on the whole Brexit situation but, being practical in consideration of where we are now, would he press the Minister to consider the UK reaching out to other European countries for youth mobility visa schemes? We have arrangements with a number of countries around the world, but to badly paraphrase “Father Ted”, their populations are small and far away. The only European country we have such a scheme with is Andorra. We could have arrangements with Poland, Spain and France, which could open up a source of labour for both his community and mine.

[John Nicolson]

I thank the hon. Gentleman for that contribution. I lament the days when the Lib Dems were with us as an anti-Brexit party. That ship has sailed, and we are the only party now that is anti-Brexit and wants Scotland to rejoin as an independent country.

I fear that negotiations with the European Union are going to be tough on any accommodation whatsoever— I mean, Westminster has few friends in Brussels these days. I have great faith in the Minister on this particular issue, though I doubt his pro-Brexit Labour and Tory colleagues—trembling before the power of Mr Murdoch and his press baron Brexit chums—are much in a mood to listen with such an open mind.

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[Nigel Huddleston]

In this debate we have heard an ongoing request for simplification in recognition of these challenging times—we did, of course, spend £350 billion on the pandemic—and a series of requests for additional relief here, there and everywhere. Everybody recognises—the Welsh and Scottish Governments are also struggling with this—that financial times are tight and that every single one of those requests comes at a cost: either other people would pay more tax or spending would be reduced somewhere else.

We absolutely hear the requests, but as my hon. Friend the Member for St Austell and Newquay (Steve Double) pointed out, over the past few years—certainly during the pandemic—the Government have recognised how vital the sector is and have been absolutely committed to it. It rightly received the immense support that it needed during the pandemic, including through the culture recovery fund to help music and heritage. So many sectors contribute to our tourism and hospitality offering. If we had not made those interventions during the pandemic, many businesses that are here today would otherwise not be. Ongoing asks during the period of recovery, when we need to start paying back that £350 billion, are very difficult because there would be massive consequences for taxpayers and the whole of the economy. I understand the challenges, but I think everybody recognises that every one of those asks comes at a cost.

[Tim Farron]

We obviously have to be careful with the nation’s finances and act within the envelope available to us, but what does the Minister make of the fact that UKinbound, Cumbria Tourism and others say that a variation of VAT levels would be of net benefit to the Treasury? Has he analysed those assessments? I am sure he has met those outfits personally.

[Nigel Huddleston]

I suspect I could spend the whole of this debate answering Members’ questions rather than going through my speech, much to the chagrin of my officials. Again, I understand the request. Many hon. Members pointed out that I was the one making these requests to the Treasury not so very long ago, for all the reasons they outlined, but we all recognise that we have to find the balance.

The point about dynamic modelling is really important. I will come on to VAT in a moment, but we must recognise that one of the biggest challenges of all requests for VAT relief is whether it will be passed on. There is not a 100% fantastic record of that happening in the hospitality and tourism sector or across the board, for understandable reasons. Cash flow was key during the pandemic, so not everybody was able to pass on the VAT reductions. When it comes to future requests for VAT reductions, we must be absolutely confident that they will be passed on, and that applies to multiple sectors.

--- Later in debate ---

[Nigel Huddleston]

I am yet to see the beans being counted, although I am sure that it happens somewhere. My hon. Friend is building on a very clear message that I have received from right hon. and hon. Members today.

The hon. Member for Westmorland and Lonsdale (Tim Farron) and I have had ongoing conversations over multiple years. I do not doubt his passion and support for the sector, or how important the sector is for his constituents. He was right to raise the issue of holiday lettings. I understand that he is disappointed with some of the measures that we have brought in, although some of those measures will make a real difference, including the ability to charge more for some rental properties. All I can say is that we are well aware of some of the additional lobbying for proposed changes and, again, that we are always open to further ideas.

[Tim Farron]

Although we need labour from outside, we also need to be able to grow our own talent domestically; that is the specific thing that will make a difference. The real problem is the collapse of residential properties for long-term occupation. The answer to that is a separate category of planning use for short-term lets and a separate category for second homes. Will his Government choose to do either of those things? They promised to do at least the first one.

[Nigel Huddleston]

All I can say to the hon. Gentleman is that we are listening. Some measures are being put in place that local authorities will have powers to implement, but I understand that a lot of people are not happy with the situation. I completely understand the challenges at a local level, particularly when it comes to employment and the unaffordable cost of housing in many parts of the country, as many Members have mentioned.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 19th December 2023 Commons Chamber

[Nigel Huddleston]

I thank my hon. Friend for her continued interest in this area on behalf of her constituents. The Government want to ensure a diverse and sustainable visitor accommodation offer while protecting local communities, including ensuring the availability of affordable housing to rent or to buy. That is why we are introducing a registration scheme for short-term lets in England, which will be a vital step towards achieving that aim. The Government keep the tax treatment of property landlords under review, but I would be happy to meet her to discuss these issues further.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Throughout Westmorland and Lonsdale we see people, particularly in social care, hospitality and tourism, ejected from their communities because of the collapse in the long-term rental market into a short-term rental market, principally through Airbnb. Will the Minister go further on fiscal controls to make sure that we keep homes available for local people to live in? Will he put pressure on ministerial colleagues to change planning law to make short-term lets a separate category of planning use, so that communities in the lakes and the dales can prevent the collapse of their communities into places only for those who can afford to visit?

[Nigel Huddleston]

I thank the hon. Gentleman for his comments. We have talked about this topic in my previous roles over many years. He is aware that the Department for Levelling Up, Housing and Communities has published a consultation on the introduction of a planning use class for short-term lets. He will also be aware that, through the Levelling Up and Regeneration Act 2023, the Government have introduced a new power to allow councils to apply a council tax premium on second homes. There is progress in this area, but we are always open to new ideas.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 14th November 2023 Commons Chamber

[Tim Farron (Westmorland and Lonsdale) (LD)]

There is encouraging news in that the Pension Insurance Corporation has recently announced that it is going to invest in helping to support the building of 1,200 new affordable homes in this city. Does the Chancellor agree that pension funds could be a very important source of capital for developing social rented housing around the country—Eden Housing Association, South Lakes Housing, and Westmorland and Furness Council, for example? Will he look at the rules and bring in greater incentives for pension investment funds to invest in affordable housing across the country?

[Jeremy Hunt]

We are already working on proposals in that very area. Broadly speaking, we have one of the most robust and resilient pension fund sectors in the world, but we are doing a lot of work to remove the barriers to investing back into the UK. Things such as affordable housing, infrastructure and our growth businesses are areas of great potential.