Property Taxes

Tim Farron Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Sir Mel Stride]

If the right hon. Lady wants to make the rules, she should live by them. That message will go out to businesses and families up and down the country. There is no way that they can avoid the juggernaut of taxes that are coming down the track.

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

In return for the right hon. Member’s generosity in giving way, I will say something pleasant about the last Conservative Government. [Interruption.] I know—wait for it! It will be just one thing.

The last Government allowed councils like Westmorland and Furness, run by the Liberal Democrats, to double council tax on second homes. It is right to do that because excessive second-home ownership annihilates communities in the lakes and the dales, the west country and elsewhere. But can I encourage the Conservatives and the party in government now to do something that would do much more to limit the number of second homes than that: bring in a new planning category of use, so that national parks and councils can manage the numbers and save communities?

[Sir Mel Stride]

I thank the hon. Gentleman for his kind words about the Conservative party—I am sure that they are deeply felt and very genuine. What the Deputy Prime Minister should be doing is delivering more homes. It is quite clear that the target of 1.5 million homes, which the Government claim they will deliver at the rate of 300,000 a year, will not be met. I am quite happy to be proven wrong, but I very much suspect that I will not be, unfortunately.

We have ended up in a situation in which a huge black hole is looming. The National Institute of Economic and Social Research puts it at possibly as much as £40 billion. The economic mismanagement of the Labour party is a recurrent theme. In the October Budget—the Government’s first—there was headroom of about £10 billion against the fiscal rules. That, plus £4 billion more, was blown by the time of the spring statement—the emergency Budget. Once again, it appears that considerably more has been blown all over again.

That is no surprise. The U-turns on winter fuel payments and on welfare reform, which we have already discussed in this debate, led to unfunded commitments of around £6 billion—unfunded commitments after the Chancellor had said that the Labour party would never find itself in that position. What she said has simply not happened. What signal does it send to the markets when the Government cannot control spending? In the long-term, it will be interesting to see what the Office for Budget Responsibility has to say about its forecasts for growth. In recent times, 30-year bond yields have hit a 27-year high. We are paying more to borrow than Greece. There is a potential debt crisis looming, and this country could be on the brink—all on Labour’s watch.

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

Will the Minister give way?

[James Murray]

I am going to make some progress, because a few moments ago I said I would do so. I have been gently reminded by Madam Deputy Speaker that I really must live up to my promise on that front.

The right hon. Member for Central Devon asked me questions in his opening remarks—indeed, his colleagues have their sheets from the Whips, and they have been dutifully following up in their comments—but they are on matters that we cannot talk about today. There are of course other important facts that the right hon. Gentleman does not want to talk about, but the British people have not forgotten them. There is the £22 billion black hole in our public finances, which the previous Government hid from the light. There is the disastrous mini-Budget, which caused damage to households across the country and to our reputation around the world. We had stalled housing, unfinished infrastructure and public services brought to their knees by under-investment and disinterest. The Conservatives do not want to talk about those things because that is the legacy of the last Government. We found out just today that the right hon. Gentleman does not even want to talk about things happening in Conservative councils, as my hon. Friend the Member for Basingstoke (Luke Murphy) raised so importantly in his contribution earlier.

Now that the Conservatives are in opposition, the right hon. Gentleman’s party and Reform Members are talking Britain down. They want to claim that Britain is broken, but I believe that Britain is unbreakable. Our country is full of potential. It is home to hard-working people, brilliant businesses, world-leading universities and research institutions, cultural giants and the promise that if people work hard and contribute to the country, it will be a place where they can succeed. Yet undeniably, after 14 years of Tory mismanagement, far too many working people feel that the economy is stuck.

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[James Murray]

My hon. Friend is absolutely right; economic growth is of course critical to our plans. She points to the trade deals that we secured. She and other hon. Members will know that the UK was the fastest-growing G7 economy in the first half of this year. There is much more for us to do, but we are showing that because of the right decisions that we have taken we are starting to move in the right direction.

[Tim Farron]

Will the Minister give way?

[James Murray]

I probably should. I will give way one more time.

[Tim Farron]

I do not want the Minister to speculate, but I want him to consider something. We talked about people not paying taxes. A significant minority of owners of second homes in my constituency let their property out for just a few days a year; as a result, they can claim to be a small business and pay no council tax or business rates. People on the minimum wage in my constituency are subsidising those people who pay no council tax at all. Will he change that situation to protect our communities?

[James Murray]

I congratulate the hon. Gentleman on an inventive way of encouraging me to speculate on tax measures. I am aware of the issue that he points to, and I thank him for raising it in this context, but I am not able to make any decisions on taxation at the Dispatch Box today.

Let me go back briefly to the broader context. It is absolutely crystal clear from the opening remarks of the right hon. Member for Central Devon, and from what all his colleagues have said so far, that Conservative Members are still in total denial about any responsibility they have for the situation that the country finds itself in. They act as if being behind the wheel for 14 years is irrelevant to where we find ourselves now. It may be that they think that if they do not talk about it, the British people may forget the last Government’s responsibility for getting us into the current situation, but the British people know that the Conservatives did this to our country. That is why the British people put their faith in us at the last election.

While there is clearly more to do to bring down inflation and the cost of borrowing, it is clear that we have turned a corner by taking the right decisions for our country. We have taken the decisions to address the black hole in the public finances, fix our foundations and clear up the mess that we inherited from the previous Government. As a consequence, as I mentioned a moment ago, in the first half of this year we were the fastest-growing economy in the G7; we outpaced France, Germany, Japan and the United States.

Since taking office, this Government have welcomed around £100 billion in investment into the UK, with 384,000 jobs being created over the same period. We have cut red tape and changed planning regulations to deliver 1.5 million new homes over the course of this Parliament. We already have nearly 100,000 new homes on large developments that were previously stuck in the planning system or simply not progressing as fast as they should be; they are now being given the support that they need to make that progress quickly. In just over a year, the Bank of England has cut interest rates five times, which means that someone on a tracker mortgage of just over £200,000 will be better off by around £100 a month. Crucially, real wages have risen more in the time since the last election than they did in the first 10 years of the previous Government.

The choice at the next Budget is clear. Over 14 years, the last Government made wrong choices time and again. They, their many Prime Ministers and many Chancellors all embraced the cycle of austerity, debt and decline, and we will never repeat that. We will continue to invest in Britain’s renewal, using every power at our disposal to drive forward an economy that works for working people. As I said, the Government do not respond to speculation, especially ahead of a Budget, and in any case we are not writing a Budget this far out.

The Budget that the Chancellor delivers in November will be carefully considered and designed to get the balance right between making working people better off and raising enough money to fund our public services and getting the country moving once again through investment and growth. Of course, it will also undergo proper scrutiny by the OBR. I was going briefly to address the taxes mentioned in the motion, but I suspect that I should skip over that part of my speech. [Interruption.] I am getting a gentle indication from you, Madam Deputy Speaker, that I have come to the right conclusion.

If we are to get this country moving again, investment from both businesses and Government is essential. We must therefore strike the right balance in our tax system, so that we can put more money in the pockets of working people while supporting the private sector to invest and grow and funding our public services. Members on both sides of the House will have their own views on what the right balance is, and I look forward to hearing those views today. I thank all hon. and right hon. Members in advance for their contributions.

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[Daisy Cooper]

I could not agree more with my hon. Friend. I would love to see that registration programme, although we Liberal Democrats have repeatedly said that it is only the first step. Registration is something that the Airbnb-type platforms actually want, because it enables them to pinch properties from other platforms. It does not solve the problem we have of lots of additional homes being used as Airbnbs, not by young people—or, in fact, by anybody who wants to be able to rent a property in their area. It is important that local authorities have the power to strike the right balance between tourism and enabling the people they need in their local area to afford to live there.

[Tim Farron]

My hon. Friend makes an extremely good point. In my constituency, we have seen a collapse in the long-term private rented sector, which has pushed hundreds of people out of our communities—they are not able to contribute, to be part of the workforce, or to send their children to our schools. Surely, an answer would be the ability to create short-term lets as a separate category of planning use, just as we are calling for with second homes. That would allow councils and national parks to make sure there are enough homes for local people to live in.

[Daisy Cooper]

Again, I absolutely agree with my hon. Friend. I recall—as I am sure he does—that in the previous Parliament, we Liberal Democrats tabled a number of amendments to legislation introduced by the Conservatives, to try to make that happen. Unfortunately, those amendments were not accepted by the now official Opposition.

In principle, a land value tax could help address land banking. All of us in this House say that we want to build on brownfield first, but of course, part of the problem is that big developers can land bank. We Liberal Democrats have repeatedly tried to table amendments to ensure that local authorities could buy that land at land value, rather than hope value. In principle, there are some merits to at least considering a land value tax, but the devil will be in the detail. If the Government bring forward any such proposals, we will scrutinise them closely.

There are a couple of major omissions from the official Opposition’s motion, one of which—as I have already outlined—is business rates. Business rates are a property tax facing small businesses, and the business rates system is broken. We have heard repeated promises, both from the previous Government and this one, that business rates will be fixed, so it is incredibly disappointing that as yet, we have not seen an ambition to replace the business rates system. Instead, we have seen tinkering around the edges, and the Government’s proposals will potentially make business rates a little bit worse, particularly as they will target hospitality. There is another major omission: the motion should refer to giving local authorities real power to regulate the location and number of short-term lets, particularly in the south-west and Cumbria, but also in many other areas.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 1st July 2025 Commons Chamber

[Rachel Reeves]

My hon. Friend will know that nobody currently receiving personal independence payments will see any reduction in the support they get. In terms of supporting women into work, recognising some of the intersectionalities she mentioned, the Government have increased the national living wage by 6.7%—sadly, it is still too often women who are paid the lowest wages—and our Employment Rights Bill will offer more security and dignity in work. We are also rolling out more childcare, including new nurseries at primary schools, and my right hon. Friend the Business and Trade Secretary will today make a statement announcing the launch of a review of parental leave, which could benefit all working parents, but particularly mums.

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

Does the Chancellor accept that cancer is a major driver of poverty? That is not only because people who are ill cannot work during their treatment, but because sometimes people who are happily cured find that they have collateral damage that means they cannot work at a full level throughout the rest of their life. Does she recognise that radiotherapy plays a huge part in making sure that people are cured and then able to be productive in society? Given that the international average for people with cancer having radiotherapy is 53%, while in the UK it is only 36%, will she look at the economic advantages of investing in radiotherapy?

[Rachel Reeves]

In the spending review, we invested an additional £29 billion every year for day-to-day spending in the national health service, as well as a record uplift in capital spending in the NHS so that there is more money for the equipment to do that vital work, including in cancer treatments, which the hon. Gentleman mentioned. In our first year in office we have delivered 4 million additional appointments in the NHS and reduced waiting lists by 250,000. That is only possible because of the decisions we took in the Budget last year—those included increasing taxes on non-doms, as well as the increase in national insurance contributions—which have gone into funding our national health service.

UK Infrastructure: 10-year Strategy

Tim Farron Excerpts

Thursday 19th June 2025 Commons Chamber

[Darren Jones]

I agree with my hon. Friend on our extremely ambitious plans for council houses—or social and affordable houses, as we call them now. He will know that I, too, grew up in a council flat. I now represent the constituency of Bristol North West, and over 20,000 people in the city of Bristol are waiting for secure housing. I am very confident that our £39 billion commitment on building affordable and social housing will make a huge difference to the lives of people across the whole country.

My hon. Friend asks about unlocking private capital. The good news is that plenty of investors want to invest private capital in the UK, but they have told us through the British infrastructure taskforce and other vehicles that they did not invest for many years because they thought that we had lost the plot in this country, whereas we now have a clear strategy. We have stability both politically and economically, and we will now work with those investors to provide opportunities across the country to bring money to communities that have missed out for too long.

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

I welcome the Chief Secretary’s comments on maintenance. He may be aware that a huge maintenance project is about to begin on the most beautiful stretch of motorway in the country, the M6 at Lune Gorge. Eight bridges under and over that motorway will need replacing in the coming years. Will he have a look at the resource that is being made available to mitigate the impact on the local community? The plan is to close the northbound exit and the southbound exit consecutively for three years, and to close the A685 bridge connecting Kendal to Tebay. Will he make sure that there is resource to ensure that there are temporary slip roads, so that local communities are not cut off?

[Darren Jones]

I am sure that the hon. Gentleman makes a very good case, which Ministers in the Department for Transport will need to answer, but I am pleased to know that the Liberal Democrats think maintenance is sexy after all.

Spending Review 2025

Tim Farron Excerpts

Wednesday 11th June 2025 Commons Chamber

[Rachel Reeves]

I hope that my hon. Friend can already see the impact of our changed attitude and our changed perspective at the Treasury with our putting this record investment of £15.6 billion, which we announced last week, into eight mayoral combined authorities to better connect towns and cities. Because of the changes we have made, we have been able to put more money into the trans-Pennine route upgrade and the midlands hub, as well as significant investment in trains in Wales.

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

My communities in Westmorland will be outraged by a 17% reduction in farm funding. We are perplexed, because we were told to expect a decision today on the vital scheme to dual the A66 from Penrith to Scotch Corner. That is crucial to east-west connectivity, to the northern economy and to saving lives. There was no mention in the statement or in the accompanying documents at all. Will the Chancellor confirm that the A66 upgrade will take place?

[Rachel Reeves]

The allocation has now been made to the Department for Transport. We have not set out every project that that will fund, but I am sure the Transport Secretary will come to this House or the relevant Select Committee in due course.

Regional Growth

Tim Farron Excerpts

Wednesday 4th June 2025 Commons Chamber

[Darren Jones]

I congratulate my hon. Friend on securing this investment in his constituency. The key difference of course being that when he started campaigning for it, we were under a Conservative Government, and now, under a Labour Government, we are delivering. On his question about working with combined authority mayors, he is right to point out that the most effective combined authority mayors in England are those who work in partnership with their local Members of Parliament to ensure that every part of their authority area is heard and involved in decision making, and I encourage the Mayor of Teesside to do just that.

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

People in Cumbria, North Yorkshire and Durham are deeply concerned to see no mention at all in the Chancellor’s announcement of the A66 dualling project, which is vital to boosting the economy of the north and, more importantly, to saving lives. There is not a penny for the northern two thirds of the north-west of England, so will the Chief Secretary to the Treasury allay Cumbria’s fears and commit now to the A66 upgrade?

[Darren Jones]

I think the hon. Member is slightly confused. The statement today is about devolved transport funding to mayors for intra-city transport. He is asking me questions on the broader spending in the Department for Transport, which will be announced in the spending review next Wednesday.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 20th May 2025 Commons Chamber

[Rachel Reeves]

My hon. Friend is a proud champion of the towns and villages of Rossendale and Darwen. We will make sure that we use our Green Book review to properly assess the benefit of all this Government’s investments. On top of that capital investment, the people of Rossendale and Darwen are benefiting from the 3 million additional appointments that we have delivered, which have led to reductions in NHS waiting lists, and also the increase in the national living wage, which will make working people in his constituency and across the country better off.

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

The towns and villages of the lakes and the dales in Cumbria are proud to host 20 million visitors every single year—we are the UK’s biggest visitor destination outside of London—yet we get almost no support whatsoever for the costs incurred by those visitors on our highways and other infrastructure, health services and police. Will the Chancellor look at funding allocations to make sure that those services that support the residents and the visitors are properly funded?

[Rachel Reeves]

The Green Book reforms will ensure that we properly assess the benefits of investments in different parts of the UK, but the people of Cumbria and the lakes will benefit from the record investment in the NHS, the roll-out of nurseries and free breakfast clubs at primary schools, as well as the increase in the national living wage, from which many workers in sectors such as hospitality and retail in the hon. Member’s constituency will directly benefit.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 8th April 2025 Commons Chamber

[Rachel Reeves]

It is incredibly important to retain cool heads at this moment. The tariffs have been imposed, and we are working closely with our friends and counterparts in the United States to reduce the impact from those, not just in the UK but around the world as well. As I said in my opening remarks, at the same time we are looking to secure better trading relationships with some of our biggest trading partners around the world. Of course, as we did yesterday, we are looking at some of the sectoral responses, including on life sciences, automotives and steel, but the fiscal rules are very important for giving our country the stability it needs. We saw what happened when the previous Government lost control of the public finances: it resulted in interest rates going through the roof, meaning higher costs for businesses and for working families. We will not make those mistakes. That is why the fiscal rules are non-negotiable and stability for this Government is sacrosanct.

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

Is now not the right time to start trying to make our own luck? In that light, would it not also be the right time for the Chancellor to give the green light to the upgrade of the A66 between Penrith and Scotch Corner? Some 25% of traffic on that A road is freight, which is twice the average for A roads across the country, and it is outrageous that so much of the road is single carriageway. Would it not be great for the economy, as well as save lives, if the Chancellor gave the upgrade the green light today?

[Rachel Reeves]

Impressive. We will be considering all such schemes as part of the spending review, but I agree with the hon. Gentleman that we need to go further and faster to grow our economy. That is why we are spending £113 billion more on capital investment in this Parliament, compared to the plans that we inherited, which means that we can upgrade more roads, rail lines and energy infrastructure, and build the 1.5 million homes our country needs too.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 4th March 2025 Commons Chamber

[James Murray]

As my hon. Friend rightly points out, £100 million is being made available for hospices—£25 million in 2024-25 and £75 million from April 2025. That capital funding is intended to help charitable hospices in his constituency and elsewhere across the country to improve and modernise their facilities and physical estate.

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

Britain is only 55% food secure. In these deeply uncertain times internationally, is it not time to change policy when it comes to agriculture? Is this not the day to get rid of the family farm tax, undo the 76% cut in basic payments and invest in the people who keep us food secure?

[James Murray]

As I have made clear to other hon. Members, the changes to agricultural property relief are a fair way to raise the money necessary to balance the public finances. Britain has excellent food security, and that is a priority for the Government.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 21st January 2025 Commons Chamber

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

My hon. Friend is a powerful advocate for his constituents, and particularly for those who have suffered in recent weeks, including others across Greater Manchester. As I set out earlier, the Government have put in £2.4 billion to ensure flood resilience over the next two years; as he will be aware, future decisions on flood defence funding will be taken in the spending review in the normal way. I know that he will continue to be a powerful advocate for his constituents.

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

Schools in Westmorland have been told that they will have to meet the costs of teacher pay rises next year, at least in part, from existing funds and by making efficiencies. Does the Chancellor not understand that all that is available to schools in my constituency is sacking teachers and merging classes? Will she instead commit to fully funding the teachers’ pay rise and other cost increases, so that our schools can do the job that they are meant to do?

[Darren Jones]

The hon. Gentleman knows that in order for us to restore public finances and put them on a firm foundation, departmental settlements have to reflect the cost of the civil servants they employ; that is how the Departments are working. As the Chancellor has previously confirmed, the Department for Education has received money to cover the cost of running the education system, and the details will be provided to schools in the normal way in due course.

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.

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[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—]