PARLIAMENTARY DEBATE
Budget: Implications for Farming Communities - 4 November 2024 (Commons/Commons Chamber)

(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs if he will make a statement on the implications of the Budget for farming communities.

I welcome the right hon. Gentleman to his place—he will make an excellent Chair of the Select Committee on Environment, Food and Rural Affairs—and thank him for the opportunity to talk about this important issue.

As the Minister for Food Security, I can assure the House that food security is national security. The Government’s commitment to supporting farmers and rural communities is unwavering. We have committed £5 billion in the agricultural budget over the next two years—the biggest ever budget for sustainable food production and nature recovery in our country’s history. We are also releasing £60 million to support farmers whose farms have been devastated by severe flooding, and investing £208 million to protect the nation from potential disease outbreaks that threaten our farming industry, food security and human health.

However, as we are all only too aware, the Conservatives left behind a £22 billion black hole in our nation’s finances—[Interruption.] Yes, you did. And this Government have had to take tough decisions on tax, welfare and spending to fix the foundations and deliver change, including a series of decisions on tax to protect the payslips of working people. That is possible only by making changes to other taxes, such as agricultural property relief, which was previously available to all agricultural property at a rate of 100%. Currently, small farms can find themselves facing the same levels of tax bills as much larger farms, despite having a much smaller asset. Twenty per cent of agricultural property relief is claimed by the top 2%; 40% is claimed by the top 7%. That is not fair, it is not sustainable, and sadly, it has been used in some cases by wealthy landowners to avoid inheritance tax. That is why the Government have announced plans to reform agricultural property relief.

The Secretary of State met National Farmers Union president Tom Bradshaw this morning. We absolutely understand—[Interruption.]

Order. Dr Mullan, I heard you before, and I am certainly not putting up with it this time. If you want to leave, do so now, because I want to be able to hear others. Do we understand each other?

Thank you. Carry on, Minister.

The Secretary of State met Tom Bradshaw this morning. We completely understand farmers’ anxieties about the changes, but rural communities need a better NHS, affordable housing and public transport, and we can provide that if we make the system fairer. The reforms to agricultural property relief mean that farmers can access 100% relief for the first £1 million and 50% relief thereafter—an effective 20% tax rate. That means that an individual can pass up to £2 million, and a couple up to £3 million between them, to a direct descendant, inheritance tax-free. Currently, 73% of agricultural property relief claims—

Order. I do not know whether you are aware, Minister, but you only have three minutes. How long will you be now? Are you coming to the end at this minute?

In 20 seconds.

Marvellous. Come on, then!

Seventy-three per cent of agricultural property relief claims are for less than £1 million. The vast majority of farmers will not be affected. They will be able to pass the family farm down to their children just as previous generations have always done. It is a fair and balanced approach that protects family farms while also fixing the public services that those same families rely on. It is part of a Budget that will restore economic stability and begin a decade of national renewal.

I call the Chair of the Environment, Food and Rural Affairs Committee.

I remind the House of my entry in the Register of Members’ Financial Interests.

Thank you, Mr Speaker, for allowing this urgent question. I also thank the Minister for his statement, but I fear that it illustrates rather well some of the lack of understanding that has brought us to this point. More than any other industry, farming relies on stability and long-term planning. That is why many people in the industry relied on undertakings given by the Secretary of State when in opposition that the Labour party in government would not change inheritance tax reliefs for farming.

Every farming business is capital-rich but revenue-poor. Those businesses also trade in a market that has been more heavily influenced by government intervention than any other. Agricultural property relief is not a loophole; it has been a deliberate policy of successive Governments for the past 40 years, designed to avoid the sale and break-up of family farms. Is that still a goal to which this Government adhere? As the NFU put it, the Government have seemingly failed to grasp

“that family farms are not just small farms, and that just because a farm is a valuable asset it doesn’t mean those who work it are wealthy.”

As the Minister will be aware, some of the figures he has just given the House have been vigorously challenged over the past few days, particularly the assertion that only one in four British farms will be affected. Will the Minister and his Treasury colleagues publish the data behind those figures? In particular, does the figure that 73% of farms will not be affected rely on the inclusion of very small holdings?

These changes will have a ripple effect across the whole rural community. Will the Government publish their impact assessment for other rural businesses? Can the Minister also explain why the Treasury has removed the ringfence around farm support to be spent in Scotland, Wales and Northern Ireland? That ringfence was introduced after the Bew review. If it needed a review to introduce it, how can it just be abolished now out of the blue?

The Prime Minister has said in the past, and the Minister has repeated today, that food security is national security. Can the Minister point to one measure in this Budget that makes achieving that aim easier, rather than harder?

I thank the right hon. Member for his questions, which are serious and important, as one would expect. Let me start by pointing out that until 1992, this relief did not exist. The system has existed before and people have operated differently, although I accept it has been different for the past 30 years.

Turning to the figures, I encourage people to reach for the detail—to look at the actual figures. The only thing we can go on is the claims, and the figures coming from the Treasury on claims for the last year available absolutely reflect that 73% figure. The right hon. Gentleman raises an important point about the ringfence; that point is under discussion, but I have made assurances that the devolved Administrations will be closely informed about, and involved in, what happens. These are important points, and they should be treated seriously.

I do not really care for the high-profile voices that we have got attacking a Labour Government, but I do care about the family farms in my constituency. I know that the Minister cares for those farms as well, as does the Prime Minister. I welcome the figures we have been given. However, those figures do need to be translated to our family farmers; they need to see what it is like on the ground. I would welcome a meeting with NFU Cymru and the Minister to discuss what things are going to look like for farmers, especially in Gower and the rest of Wales, where there is a completely different landscape.

I thank my hon. Friend for her contribution. Can I say how much I enjoyed visiting Wales, with the Welsh Minister, very early in my tenure? It was an important sign from this Government that we take farming seriously across the entire United Kingdom.

I share my hon. Friend’s very strong points about the importance of the family farm. What we are doing here is protecting the family farm. I have visited right around the country over the past five years, and on almost every visit, people have told me that they are concerned about people coming from outside—they often say “up London” or “down London”—with a lot of money and buying up local farmland over the heads of local people, not because they care about farming but to use that farmland for tax evasion purposes. This policy can be helpful to family farms and protect them against—[Interruption.] The hon. Gentleman on the Opposition Front Bench says from a sedentary position that it will not, but it is people from his area who have been telling me about these problems. They repeated them constantly when we were in opposition, and here are a Labour Government doing something about it.

I call the shadow Minister.

Mr Speaker,

“losing a farm is not like losing any other business—it can’t come back.”

Those are not my words, but the words of our Prime Minister at the National Farmers Union conference just last year. Over the weekend, we have heard gut-wrenching stories from farmers up and down the nation who feel completely and utterly betrayed by the measures in this Budget. I ask the Minister: why does the Secretary of State continue to say that he is proud of his family farm tax? Does the Minister realise that the vast majority of farming families are not multimillionaires? Most are cash poor and many are struggling to break even. How does the Secretary of State expect farmers, in his words, to do—[Interruption.]

Order. Can I just say to the hon. Member for East Thanet (Ms Billington) that I do not need any chuntering? Do we understand?

How does the Secretary of State expect farmers to do more with less? Why is he happy to hand our next generation of farmers an impossible tax bill?

Next, the Government claim that small family farmers will be protected, yet the Country Land and Business Association and the NFU have today disputed the Government’s figures. Will the Minister commit to releasing a full assessment of his policy, including an impact on national food security?

While the changes to inheritance tax relief have been gaining the national headlines, there are many other negative impacts on farming businesses from the Budget. Increased national insurance contributions, coupled with a lower national threshold; an accelerated reduction in de-linked payment rates; higher taxes on double-cab pick-up vehicles; new taxes on fertilisers—I could go on, but this all begs the question: does the right hon. Member for Streatham and Croydon North (Steve Reed) actually know anything about farming at all? More importantly, after the Secretary of State looked British farmers in the eye and specifically promised them that there would be no changes to agricultural property relief, how on earth can farmers believe a single word that his Minister is about to say?

I am very grateful to the hon. Gentleman for promoting me to Secretary of State—I hope he has similar success in the coming hours.

The hon. Gentleman raises a whole series of questions. He asked again, as others have, about other elements in the Budget. The figures are absolutely there; they were published by the Treasury and are there for all to read. They are the facts on the estates that have made claims on agricultural property relief in the last year available. [Interruption.] They are there for everyone to see. It is not difficult, it is not complicated—they are there.

Something that perhaps has not been said, but which should be, is that there were many calls to reflect the changing way in which farming operates by including environmental land management schemes within the scope of agricultural property relief. I hear nothing from Opposition Front Benchers about that. Do they not understand the way in which British farming is changing?

I am grateful to my hon. Friend because she makes some important points. Ahead of the Budget, there were lots of predictions about what would happen. Of course, what happened is that this Government have protected the farming budget—indeed, raised it—and we are absolutely committed to paying out to farmers the £60 million that they deserve for flooding. That is £60 million, of course, that was not really budgeted for by the Conservatives, as part of their £22 billion black hole. The difference between us and them is that we are taking a responsible approach, which means that farmers can look forward to a stable future, as opposed to the chaos of the last decade.

I call the Liberal Democrat spokesperson.

Farmers across the United Kingdom are coping with the lingering legacy of betrayal—betrayal from the trade deals that happened under the last Government, which threw them under a bus; and betrayal from the transition from the old payment scheme to the new one, which saw many of them going bust or forced into making business decisions that they would never, ever have chosen. That legacy of betrayal is one that hangs heavy, and it is why farmers in my constituency and elsewhere feel so utterly disappointed by this Government’s Budget last week.

Let us look first at the agricultural property relief changes. There are 1,500 farms in Cumbria and 440 in my constituency affected by this. Has the Minister done an investigation into the number of farmers who are living on less than the minimum wage each year in terms of income, but who have a property that will be affected by these changes, particularly given the 41% decrease in farm incomes under the Conservative Government over the last five years? Will he also assess the impact on tenant farmers? Some 50% of my farmers are tenants and will be affected by the disruption that this change will create. Would it not be wise for him to implement the Rock review of tenant protections before introducing something like this? Will he also look again at the £2.4 billion budget and increase it by £1 billion, just as the Liberal Democrats suggest? If we do not feed ourselves, we are a failing country.

The hon. Gentleman is a well-informed, thoughtful person, and I listen closely to what he has to say on these issues, but I do wonder sometimes about the Liberal Democrats’ approach to economics, because that £1 billion would have to come from somewhere. I am afraid that the difference between Labour and the Opposition side of the House is that we are determined to get the public finances in order, because it is upon that basis that future prosperity in the farming sector will come.

In terms of farm incomes, the hon. Gentleman is absolutely right that many farms are very marginal. We know that, and it is complicated, but I would say to everyone in this House that the entire inheritance tax system is complicated; I must say I have read a lot over the weekend that was perhaps a little short on accuracy. He is also right about tenant farmers, and we are in close conversation with the Tenant Farmers Association about how the changes can perhaps be used to good effect, because another element which has not been raised so far, interestingly, by the Conservative party is the generational challenge we face in farming. I will not be telling farmers how to run their lives, but it is worth reflecting on the fact that sometimes it is difficult to make that transition and we need to get more younger people into farming.

I put on record that I am an officer of the all-party parliamentary group on farming. I also put on record my thanks to farmers who, through a torrid decade, have produced food and sustenance for us in this country. We should all recognise that. Farmers will rightly be anxious after the experiences they have had in the past few years. Does my hon. Friend the Minister agree that that anxiety will only be heightened by the scaremongering from some Members of this House, and will he commit to working with hon. Members, the National Farmers Union and farmers to ensure that the positive elements around food security in this Budget are delivered in the years to come?

My hon. Friend and near neighbour is right to pay tribute to our food producers. One thing we know for sure is that we are going to need food into the future, and farmers are essential to the future of this nation and our economy. That is why we will treat them with the utmost respect and seriousness and have a serious debate about how we transform farming. Again, while this has not been picked up much in the debate so far, the effect of this Budget is to speed up still further that transition to an environmentally friendly, nature-friendly way of farming, alongside producing the food that our country needs. That is a really important transition—I pay tribute to the current Opposition, who started that process in government, but I have been unwavering in my support for it for a number of years and I am determined to see it through to a proper conclusion. My hon. Friend is also right that we will work with everyone involved to get good, sensible outcomes, because that is what this Government are about.

The National Farmers Union tweeted:

“In 2023 Prime Minister Keir Starmer looked farmers in the eye and said he knew what losing a farm meant. Farmers believed him. After today’s budget they don’t believe him any more.”

What is the Prime Minister going to do practically to resolve that?

When we came to power a few months ago, the thing I was asked most strongly to do was to provide stability for the future. Through a series of interventions over the past few months, I have tried to indicate that that is exactly what we will do, whether through the environmental land management schemes or any other issues. The Government faced a huge challenge at this Budget—we all know that. Decisions had to be made. However, I am absolutely convinced that farmers and all those other people who live in rural areas want and need exactly the same decent health services, housing and transport as others do. They will be able to carry on farming, as they have done, but the difference is that that will be in a stable economic system, which means they will not suffer in the way they have over the last decade.

Many farms in my constituency were under water for months after the floods last year. What is the Minister doing to support those farms as they recover from last year’s horrific storms?

Extreme weather events have clearly become a growing challenge for us all, which is part of the reason that we are so determined to make the transition to a more environmentally friendly form of farming. Last year, a scheme was in place to help farmers. The then Government increased it; as I say, I am not sure that they exactly identified where the money was coming from, but we have identified the money. We have honoured it and will be paying the £60 million out to farmers in the next couple of weeks.

The Minister implied earlier that farmers in my constituency of Bridlington and The Wolds support this measure. I can categorically tell him that they do not; they are shattered by this announcement. The impact on my community will be devastating. I ask the Minister today to do the right thing and withdraw these plans.

I look forward to many more such exchanges over the Dispatch Box with the hon. Gentleman. What I said earlier was that on my many visits around the country, people consistently told me that they were concerned about how the system was being abused and how people were coming in and buying up land over their head. That is what I said, and that is what I stand by. As for these measures, I am afraid that this is a Budget that stands in its entirety—and the whole country needs stability, so it will stand.

A few months ago, I visited my constituents Andrew and Ada, who farm in a remote north-east corner of Cumbria. Sadly, after 14 years under Conservative Governments, they are largely getting by on Ada’s pension. Will the Minister set out what support will be available to farmers such as my constituents, following last week’s Budget?

My hon. Friend is absolutely right; many people in this country, and many farmers in particular, are struggling to get by. That is why it is very important that in this Budget we maintained the budget for the support schemes that people are getting used to; it is interesting to note that they are now being subscribed to in much higher numbers. That support will be available to help people to make the transition and to go on supplying food for this country, which is so important.

It has now been more than 10 years since devastating floods wrecked the Somerset levels and moors, causing untold damage. At the time, affected communities were told that money was no object when it came to protecting the area, but now, deep in the Budget document, there is a hint that the farming and flood defences budget might be cut. Can the Minister explain to my farmers in Glastonbury and Somerton, who are terrified of more flooding devastation this winter, how the Government aim to protect them?

I remember those awful times very well. “Money is no object” is not something that was said by my party, I can tell her; it was said by the now Opposition, and perhaps it was not exactly the right way to put it. Extreme weather events are a challenge for all of us across the country. My colleagues and I will work with everyone to find the best ways to resolve them, but let us not for one moment imagine that this is a simple issue to solve. The flooding challenges are very real and we are working on them. I look forward to further discussions with the hon. Lady.

The Minister knows lots of farmers in my constituency—he is a near neighbour of mine—and farmers are grateful for his engagement with them. He knows that farmers’ incomes fell year on year under the Conservative Government. Will he outline what measures there are in this Budget to support farmers in North West Cambridgeshire and help the industry to get back on track?

I thank my hon. Friend, who is another of my near neighbours. I did not use to have many near neighbours who were anywhere near as friendly as my new near neighbours, but Cambridgeshire has changed. Cambridgeshire has changed for a very clear reason: Cambridgeshire lost trust in the Conservative party. I am determined to build trust across the entire country by maintaining, over a prolonged period, the levels of support necessary to allow people to farm successfully. My answer to my hon. Friend is to look at the Budget, where we saw an increase in the farming budget. We will look to maintain proper support into the future because, exactly as has been said, these are long-term businesses and long-term interests. The reason that they are long-term is that we are all going to need to eat.

The Minister talks about the transition. I talked to my farmers in Bedale on Friday, and the only transition they can see is the transition from family farms to the state. Does he realise that the farming industry is one of the least profitable sectors in the country? The return on capital employed is 0.5%—that is the Government’s own figure—and that is around a 20th of the typical profit margin in the UK. Other than by some warped socialist ideology, how can he justify taking away 40 years of profits for the typical farmer?

The hon. Gentleman may wish to remember that the agricultural transition was embarked upon by the previous Government. It is a seven-year transition process, and we are just over halfway through. It is important that it is maintained in a stable and sensible way, and that is exactly what we are doing. My answer to his question is that the challenge put to me was to maintain stability and not to tear up those schemes—to maintain them and make them work—and that is exactly what we are doing.

I met farmers in my constituency in the days just ahead of the Budget. The biggest concern that they raised with me was not inheritance tax, but the transition from basic payments to ELM schemes. I welcome the fact that the Budget not only maintained the agriculture budget, but grew it, which the Conservatives said they would not do. There is a concern that under the previous Government, despite having the budget, the system was written in such a way that the smallest farms could not easily access that funding. That is the single biggest threat to agricultural businesses in my area. I rather think the Conservatives are raising a smokescreen. Will the Minister comment on what this Government will do to ensure that we can draw down that budget and ensure that local farms can take advantage?

It was striking that under the previous Government the agriculture budget was so substantially underspent. We are fixing that and making it possible for people to access those schemes in the way that my hon. Friend describes. It is interesting that the issue that came up most for him was basic payments. The issue that came up time after time on my visits was rural crime. That is the thing that has troubled so many people on farms and in the countryside. That is why it is so important that this Government are setting up a proper integrated rural crime strategy.

The Minister is seeing silver linings in the clouds hanging over family farms and tenanted farms in North Dorset, but I must confess that I fail to see them. I will give ask the Minister a simple yes or no question: yes or no, will he come to North Dorset to meet farmers in my constituency and explain these wonderful silver linings that he can see in the clouds but none of us on the Opposition Benches can see?

I love visiting farms all over the country, and I am sure North Dorset will feature on my list at some point in the future.

On this whole question of optimism, pessimism and the stress and strain in the countryside, my hon. Friend the Member for Peterborough (Andrew Pakes) earlier warned about some of the things that are being said. I urge people to be temperate in their language on these issues, because people are stressed, anxious and worried. My task is to be calm, sensible and reassuring to them, and to remind them that the vast majority will be able to pass on their farms just as they have before. Just as pressing is to tackle those other real issues that they face. I do not underestimate the challenges that people face—of course it is difficult, and we know it is hard, but this Government will do everything we can to support people and to maintain their prosperity into the future.

Many of the farmers in my constituency have regularly raised concerns with me over protecting farms and our food system from animal diseases. Will the Minister please outline what steps he is taking to protect our food and farming systems?

I thank my hon. Friend for raising that important point, because among the many, many stressful things for farmers is not just the weather of the past few years, but the disease threats. Whether that threat is avian flu or bluetongue, we are committed to helping. As part of that, in the Budget we committed more than £200 million to start the process of upgrading the facilities at Weybridge, which is so very important for our future biosecurity. Biosecurity is so important. I was staggered that the previous Government did not take swifter action to protect our borders from African swine fever. We have toughened the rules on that.

I see the hon. Gentleman nodding. He is well versed in that; he knows.

Order. Can I just say that brevity will be helpful? I believe that everybody has a constituency interest, so I really want to get everyone in. If we can have shorter answers, that would be better. Also, if the Minister looked at me now and again, that would help me hear what is being said.

I declare my interests as a farmer.

A 75-year-old farmer emailed me last week and said

“we work long hours, usually alone.”

He said that agriculture

“has one of the highest suicide rates of any industry. There is a great deal of talk these days about mental health and the need to alleviate stress in the workplace, yet”

last week the Chancellor and the Secretary of State for agriculture

“destroyed everything I have ever worked for.”

How would the Minister answer that?

I would reassure that farmer. I am afraid that I do not think he is correct on that, and we are absolutely determined to ensure that he can hand on his farm, as others have done before, but let us ensure that he gets the proper advice.

I spent about 14 months in this place asking the former Government about water management, but I was always on a hiding to nothing. Does my hon. Friend recognise that the farmers in my constituency have a lot of expertise in water management and land management? Will he tell us how the Budget supports farmers to bring that expertise to the fore and work in partnership with us to manage that land and water?

The best potatoes.

I am grateful to my hon. Friend. The schemes we have in place will help us to work with farmers on those issues—alongside, of course, the payment of the £60 million that the previous Government promised.

The Minister has asked Members to be temperate in their language, but there is deep anger in Scotland and in my constituency about these announcements, which the policy director for the NFU in Scotland has stated will be devastating for farmers and crofters. Will the Minister tell us how these announcements will increase food security and national security?

Once again, I would say that it is by having a stable, sensible approach to farming support in the coming years. Clearly in Scotland this area is devolved, and it is for the Scottish Government to determine how they operate, but we are setting the overall context, and in a stable economy in the future farmers will thrive.

I am proud to represent proud North Yorkshire farmers in my constituency. Will the Minister set out the steps he will be taking to ensure that small family farms will be protected by the Government? Additionally, will he endorse polyhalite, a fantastic crop nutrient fertiliser that is produced in only one place in the world: North Yorkshire?

I am grateful to my hon. Friend. I will always look with keen interest at anything that can help us to make progress. In terms of how we provide support and reassurance to those small farmers, that again is by making sure that we have a strong, stable economy.

I refer to my entry in the Register of Members’ Financial Interests. Is the Minister surprised by the reaction of the farming community?

I thank my fellow East Anglian MP for his contribution. Am I surprised? No, I am not entirely surprised, because people are very fed up and depressed, and they have been depressed for a long time. I understand why it is difficult, but my job is to reassure and talk calmly to people, and that is what I shall continue to do.

I am proud to represent many wonderful farming communities. The young farmers I meet tell me that one of their biggest challenges is accessing rural mental health services. Does my hon. Friend welcome the record £22 billion extra going into the NHS, which will support access to rural mental health services?

My hon. Friend is absolutely right. The core message of the Budget is to get our finances stable and on track, which will allow us to invest in the public services that everyone needs, and particularly those in rural areas who are struggling with those issues.

One of many emails I have received in the past week is from a farmer who has an archetypal family farm of 330 acres of mixed dairy and arable that they are planning on passing on to their son, even though they are struggling to make ends meet. He is typical of farmers in my constituency, and he is very concerned. We have not seen any investment in public transport or any of the other sweeteners that the Minister mentioned earlier. Can he explain what investment will go into rural transport, and why he has set the threshold for APR so low?

I think the hon. Lady should wait a bit longer to see transport improvements—it has only been a week. The level has been set by the Treasury based on the figures that we have, to try to make sure it is fair. As I said, the vast majority will not pay anything. I hope she will find that reassuring.

For 14 years, farmers in my constituency were let down and betrayed by the Conservative Government on things like the Australia and New Zealand trade deal, and repeated broken promises that saw thousands of farm businesses across the country close. Does the Minister share my assessment that they were betrayed for those 14 years?

I do not think it is my assessment, but that of the voters, who made it very clear.

Sam Wilson is a farmer in Ashfield. He is not a rich man; in fact, he has not drawn a wage in the past four years. Will the Minister look me in the eyes and tell me how many farmers he has spoken to in the past few months who agree with this hare-brained scheme?

The last farmer I spoke to over the weekend congratulated me on what we were doing.

There appears to be a lot of discussion about agricultural property relief on inheritance tax today. Could the Minister confirm what percentage of the farms that claimed more than £1 million of agricultural property relief in the past two years actually received any agricultural income in the past five years?

I will have to go away and get the answer to that, and I will write to him.

South Shropshire farmers were in touch with me over the weekend. They are up in arms about changes to APR that the Labour party told them would not happen. Will the Minister reverse this rural vandalism and back British farmers?

We will back British farmers, by making sure that they have a stable system in which they can flourish.

It is extraordinary that a small number of wealthy landowners have been using agricultural property relief to avoid inheritance tax. What is more extraordinary is how the Conservatives have defended tax avoidance in the way that they have. Will my hon. Friend confirm to the farmers in my constituency and across the country that the Budget will benefit family farmers through investment in public services as well as through the agriculture proposals?

My hon. Friend makes a powerful point. Not only do those people seem to relish finding ways of creatively running their accounts, but some of them even take money to write columns about it.

I declare that my husband is in agriculture and farming, and therefore I have an indirect financial interest in the topic. This Government promised that they would not raise national insurance contributions, but they have. They promised that they would not reduce agricultural property relief, but they have. They have also added a fertiliser tax and a tax on pick-up trucks as a way of compounding the misery. Has the Minister done an impact assessment on food security and food prices following the Budget, and will he publish it?

The hon. Lady will know that many things impact food prices. I gently suggest to the Conservatives that they might want to look more closely at food price rises over the past few years before giving us any lectures on how to manage things. I am confident about this, because I have looked at the figures issued by the Treasury on the number of claims made in the past few years, and our figures stack up.

I have previously raised in departmental questions that the farmers I speak to are reluctant to sign up for ELMS due to the complexity, and because they do not want to get locked into a deal when a better one might be around the corner. That may account for the £200 million underspend last year. In the Budget, the Government committed to maintaining the funding at the current level, including the underspend, but said that it would be reviewed in 2025-26 to ensure it is “affordable”. Does the Minister agree that that leaves farmers even more in the dark about their future, at a time when they are struggling to get by?

The hon. Lady raises an important point. I suspect that in the months ahead it will come out that, actually, over the last few months there has been a big uptick in the number of people making sustainable farming incentive claims. That says to me that we are now on track to make these systems work for people. I do not disagree with her that under the previous Government it was a very long painful process, but we are now making progress and we need to make it work.

Does the Minister recognise that the changes not only break the Government’s previous promises on APR to farmers, but that they will add significant burdens and costs to family farms and disincentivise food production?

I also wish my fellow East Anglian MP, the right hon. Lady, good luck in the coming hours. The reason we can look forward to a successful and stable future for farmers across the east of England and the rest of the country is that we have absolutely committed to stability. The reason things have had to be different is that we found—I found this in my Department, just as fellow Ministers found it in their Departments—that the situation was far worse than we had been led to believe. We had to tackle that problem.

Diolch, Mr Llefarydd. As a tenant dairy farmer myself and chair of the Farmers’ Union of Wales Carmarthenshire, I perhaps understand this issue more than anybody else in the Chamber. The Government are trying to portray farming as an industry of super-wealthy landowners and that is simply not the case in Wales, let me tell them. Welsh upland farmers in mountainous and hilly areas have an average annual income of £18,600—yes, you heard correctly: £18,600. That is far below the national living wage for hours that are way beyond the average 40-hour week. What assessment has the Minister made of the impact of the changes to APR in Wales, where wages for farmers are so low?

The hon. Lady is absolutely right that farming is very tough right across the country and very difficult in Wales. It is a devolved issue, so I will not comment on specific schemes in Wales, but I point her back to the Treasury figures that show the number of people who made claims for APR. It is relatively few, and I would say it is probably relatively few in Wales.

I spent most of the past six years looking at Treasury figures and I have a great deal of sympathy for the hon. Gentleman. I fear he is a victim of a hit-and-run exercise by the Treasury on the Department for Environment, Food and Rural Affairs budget. He would do well to think about the lessons learned from the pasty tax, because if he is not careful this measure will be of a similar dimension for this Government.

I am very grateful for the right hon. Gentleman’s concern, but I have to say I do not agree with him.

Can the Minister confirm how many farms in Wales will be impacted by the changes to APR in the Budget?

I am grateful to the hon. Gentleman for his question. I do not think it is broken down by national area at the moment, but it is something we can go away and look at.

I draw the attention of the House to my entry in the Register of Members’ Financial Interests. Farmers and family businesses are deeply alarmed, because an important principle on which they have relied for decades has been breached. It is obvious from the Red Book that the Chancellor will have to raise tax again in the future. Is this the end, or can farmers and small businesses expect yet more demands on death?

The right hon. Gentleman says decades. I think it was in 1991 or 1992 when the current rules were introduced. I can absolutely assure him that we are now on track for a stable future. That will allow farmers in his constituency and across England to flourish.

Family farms are very often cash poor. Each time the average farm is passed from a parent to a child, the family may have to generate an extra half a million pounds. They may deal with that by trying to make each acre produce an additional £40 of profit. That could send into reverse the agricultural transition to a more nature-friendly farming approach, if they revert to more agrichemicals and intensive methods. As I asked the Minister in an Adjournment debate last week, what did he do ahead of the Budget to combat this appalling measure?

The hon. Member asks what we did. What we did was look at the farming budget and ensure that we protected it, to allow his constituents and constituents across the country to take part in the schemes that will support them in that important transition.

How does the Minister reconcile his sensible acceptance of the fact that food security is vital to national security with farmland being split up and sold off, probably for development, as a result of the Budget changes?

The right hon. Gentleman has raised an important point. We will be addressing it through the land use framework, which will be delivered in the next couple of months. Of course there are trade-offs. There are a range of pressures on our land, in respect of housing, food, energy and so many other things. We need to have a rational way of making those decisions, and that is exactly what we will introduce.

Are the Minister, the Secretary of State and the Chancellor aware that so serious are the consequences of this policy that the heads of farming families in their 80s and 90s are seriously considering committing suicide before it comes into place? [Hon. Members: “Shame!”] Shame on you! [Interruption.]

Order. I do not need any after-comments.

I find it hard to respond to a question like that. I spoke earlier about using language carefully, and I would just reiterate that point.

In the rural England that I am privileged to represent part of, they say that you should live as if you are going to die tomorrow and farm as if you are going to live forever. Do the Government not understand that if we inheritance-tax our farms out of existence, there will be no forever, and there will be no food from what was once the garden of England?

The right hon. Gentleman is very knowledgeable about these issues. I just gently ask him to look closely at the detail and the figures, which show that the numbers are low. I do not recognise his characterisation of the future.

According to statistics published by DEFRA last Thursday, an average farm in England measures 88 hectares, which is roughly one hectare for every word that Labour had to say about farming in its last manifesto. What assessment has the Minister made of the typical value of a farm of that size—about 88 hectares?

I think the hon. Gentleman will know that the definition of a farm is actually rather complicated. That is what makes this quite a difficult debate, and I am not going to comment on individual farms, but the overall assessment—[Interruption.] Let me return to the point about the Treasury figures, which show that the number of claims likely to be affected by this change is relatively low.

Before the election, farmers in my constituency were very concerned about the environmental land management system, which had not worked for a long time but which they felt was just beginning to work. Will the Minister please reassure them that the Government will be proceeding with it?

I can absolutely give my hon. Friend that assurance. As I said earlier, throughout the last five years in opposition, I was a consistent supporter of the agricultural transition, and I am determined to ensure that it is successful.

I am conscious of the need to use temperate words, but one of my constituents said to me that the Government had left farmers the choice between selling now in a managed way and leaving their farms to their heirs, who would be at the mercy of HMRC and the banks. Either way, family farms would fall.

The Minister has talked extensively today about the challenges of wealthy individuals coming in to buy up farmland. Do the Government accept that this measure will potentially increase that problem, and, if it is a problem, what additional legislative steps will they take?

No, I do not. For the reasons that I outlined earlier, I think that it will act as a disincentive for people to do that.

Farmers in my constituency have told me that they are struggling, owing to the abysmal implementation of a transition payment scheme by the last Government. There have been huge delays in receiving payments and they have been caught up in bureaucracy. Will the Minister reassure me, and those farmers in my constituency, that this Government are fixing those problems and speeding up payments to our farmers?

I can give my hon. Friend that assurance.

Ministers keep saying that we should not worry about APR because far more people think they will pay it than will actually be caught. Does he not recognise that that is part of the problem? People have to make business decisions now for an uncertain future, and this policy will have a depressive effect on the investment that we need in agriculture.

I do not agree. If the right hon. Member looks at a number of the more thoughtful commentators in the debate over the last few days, he will see that there are some very different views out there on the impact this policy will have.

I thank the Minister for his comments about rural crime, which is a real issue in my constituency of Burton and Uttoxeter. We have heard no apology from the Conservative party for cutting policing across our constituencies. Will the Minister say more about the steps that this Government will take to protect farmers from theft, antisocial behaviour and fly-tipping?

My hon. Friend is absolutely right. It seems that the Conservative party does not understand that if we raise taxes and invest in the future, we can do more to protect people who cannot protect themselves. It is vital that we tackle rural crime, which is a top issue that is raised with me consistently.

At the Rutland ploughing contest this weekend, it was clear that farmers feel devastated. They feel that the Government do not understand them, because farmers do not have liquid wealth; they rely on land as their asset to produce food. They turn a small profit but have a very constrained cash flow. Indeed, they have the lowest return on assets of any business sector—an average return of less than 1%.

“Losing a farm is not like losing any other business. It can’t come back.”

Those are the Prime Minister’s words. As the Minister’s constituency is a near neighbour of mine, will he come and repeat them to my farmers in Rutland and Stamford, and have that discussion with them?

I have been on an extended farm tour for the last five years, and I am sure it will continue.

In my constituency of Monmouthshire, farmers are anxious and worried. Will my hon. Friend seek to reassure small family farmers by spelling out the figures? Last week, the Exchequer Secretary to the Treasury said:

“these exemptions mean that if someone has no other assets and is passing it on to a direct descendant, a farm or farming business worth up to £2 million can be passed on without paying any inheritance tax at all.”—[Official Report, 31 October 2024; Vol. 755, c. 1036.]

I am grateful to my hon. Friend. I am very reluctant to offer tax advice to anybody, but the advice I have been given is that the figure may even be more than that. I urge people to look closely at the detail, rather than jumping to the worst conclusion.

Reference has been made to rural crime. May I suggest that a whole new definition of “rural crime” is the proposals contained in the Budget? The Labour party has yet again shown that it does not understand the rural community. If family farms close, there will be a knock-on effect for grain merchants, farm machinery dealers and so on. Can the Minister explain what assessment has been made of the impact on the total rural economy?

I agree with the hon. Gentleman that the rural economy is closely integrated and that one thing has an effect on another, but the thing that will be most beneficial for the rural economy is a strong economy, which we are building. We are putting the foundations in place.

I have 1,600 farmers in my constituency. Some 432 farms will be affected by this silly idea, not to mention the families, their employees and the shopkeepers who rely on our rural economy. This policy is insensible, irrational and plain wrong in its interpretation of real life in our rural communities. It will be like the highland clearances. Hundreds of years of tradition will be lost to the taxman. Before I ask the Minister to think again, I can say with absolute certainty that the policies of the Conservative and Labour parties have reaffirmed the fact that the Liberal Democrats are the only true champions of farmers and the countryside—

Order.

Sorry. Will the Minister—

Order. Sit down, please. The question was long enough. We do not need to start playing politics around the Chamber.

I do not recognise those figures. When I look at the figures that the Treasury gave for the number of claims in the last year available, that is very close to the number in the hon. Lady’s own constituency, which seems unlikely to me.

First, I should declare an interest as an active farmer of 865 acres. Secondly, I represent a constituency with some of the most fertile farmland in the country, and since the Budget I have yet to come across anyone who thinks that this is anything other than a terrible decision. Speaking at the Country Land and Business Association conference before the election, the then shadow Secretary of State—now the Secretary of State—was asked whether Labour intended to change inheritance tax relief for farmland. The response was:

“We have no intention of changing APR”.

While I feel for the Minister in trying to defend the indefensible, would he like to take the opportunity today to apologise to the British farming community and, most importantly, commit to the reversal of this cruel assault on British family farms?

The hon. Gentleman well knows the financial state of the country that we inherited. Difficult decisions had to be made.

The average farm in Aberdeenshire is 490 acres, and average values are about £5,000 an acre for bare land. Once the farmhouse, building machinery and livestock are added, that is suddenly well over the inheritance tax threshold and have a huge IHT bill of hundreds of thousands of pounds coming your way. DEFRA figures show that 19% of farms do not make a profit and 24% make less than £25,000, so does the Minister suggest that farmers sell the land they use to grow the food, sell the machinery they use to harvest the food or sell the buildings they use to store the food, in order to pay this bill?

The hon. Lady will know that farming policy is different in Scotland, but on the tax issues, which are UK-wide, that is absolutely right, but I would suggest that she gets her farmers to look in detail at these proposals, and what they will find is the vast majority—[Interruption.] When they look at them in detail, they will find that the vast majority will be absolutely fine.

As a fellow Cambridgeshire MP, and having already announced a forthcoming ban on neonicotinoids for our sugar beet farmers, what message will the Minister give to the Cambridgeshire farmers so gravely impacted by the Government’s family farms tax that will lead to farmland being sold, and potentially see more of our best and most versatile land being used for vast solar farms? How does the slashing of agricultural property relief help farmers in Cambridgeshire?

It is very good to see my near neighbour. What I will say to Cambridgeshire farmers is that the thing they need most of all is a stable economy, and they also need a sound environment in which they can farm. The measures that we are putting in place will ensure their prosperity for the future.

Can the Minister reassure the House and the people of my constituency and our country, that the Budget will not add to the cost of producing food and will not result in consumers having to bear the brunt of rising prices, higher inflation and higher interest rates?

The hon. Gentleman makes an important point. The people of this country suffered gravely under the last Government, and we will do nothing to make their situation more difficult. In fact, this Budget protects the pay packets of the vast majority of the British people.

There are already very low margins on every farm, including those in Mid Buckinghamshire. Will the addition of between £50 and £75 a tonne on the price of fertiliser, through the Government’s proposed carbon tax, increase food prices? Who will shoulder that burden? Will it be the farmer, or will it be the consumer?

As the hon. Gentleman knows, a whole range of factors go into food prices. What is very good news is the establishment of GB Energy and a move to a much more affordable and reliable form of power for farmers as well as our consumers. We will all be better off.

On Friday, I visited an agricultural college in my constituency, where I heard concerns about how the changes in this Budget will potentially strip an industry of young farmers. What discussions did the Minister have with farming stakeholders on changes to the agricultural property relief prior to the Budget?

The hon. Gentleman will know that tax discussions during the run-up to a Budget are a delicate issue. However, there was no shortage of discussion in newspaper columns across the country, so there has clearly been discussion. Younger people who want to go into farming face real obstacles, and this change could help.

The hon. Gentleman shakes his head but, if he talks to people who know about these issues, they agree with me.

Does the Minister accept that agricultural relief was introduced to protect family farms from being broken up, precisely to reflect their role as food producers and custodians of our countryside? Will he rethink this, do what Labour originally promised, and withdraw this proposal?

As a fellow East Anglian MP, the hon. Gentleman will know just how complicated farming is, how much it has changed over the last 30 years, and how much it is likely to change in the future. We have to ensure that farming is in the right place to benefit from the changes that we are seeing globally and nationally and, most importantly, that farming can operate in an environmentally and nature-sensitive way. Without that, we will all be in deep trouble.

In the Minister’s opening answer, we sadly heard more Government slogans and soundbites than real understanding of the fear that Daventry farmers have been telling me about. I can assure him that they have been looking at the detail in great detail. One of them, whose father is sadly coming to the end of his life, is now actively looking to sell off land because they simply cannot make the farm work. That is the next generation gone. That is food that feeds NHS patients gone. Does the Minister not think it is time to reverse this policy?

I think it is time for people to take up the opportunities of the schemes that the previous Government introduced and that we are continuing, which allow them to farm in an environmentally and nature-friendly way. It will be good for the future and will produce food for this country. There is a very bright future for British farming.

Given the varied estimates of how many farms will be impacted by these changes to agricultural property relief, will the Minister confirm how many farms he thinks will be impacted?

I refer the hon. Lady to my earlier answer. The figures are in the Treasury papers for all to see.

Since Wednesday, I have been contacted by devastated farmers from across Stockton West. Their families have farmed for generations, and they know that, as a result of this Budget, they will be the last generation to do so. Has the Minister made any assessment of the impact this APR change—this family farm tax—will have on the viability of tenant farming?

Yes, we have, because we have looked at the figures. Again, I do not recognise the hon. Gentleman’s characterisation although, given some of the things that have been said over the last few days, I understand why people are alarmed.

South Devon has some of the most expensive land in the country, which makes every farm, regardless of its size, worth a lot of money on paper. One farmer in my constituency said over the weekend:

“We may be land rich but we are cash poor and our children will more than likely have to sell the land and maybe buildings to cover the tax. Without the land, the farm is simply no longer a farm, taking valuable land out of food production.”

The Minister says he values food security, and agricultural property relief gave us that food security. He says—

Order. I think the Minister has got the point.

I understand the point but, first, much of this can be avoided through proper planning. Secondly, Devon is one of the counties where we most often hear it said that people are coming in and buying up land for the wrong reasons.

Farmers in Dumfries and Galloway, who have been contacting me over the weekend, are not shroud-waving—let us be clear about that. Less clear are the figures. The NFU says that as many as 50% of farms that are producing food, meeting environmental targets and providing jobs in remote and rural areas could be at risk. Napoleon knew that an army marches on its stomach, and he also said that a good retreat is better than a bad stand. This Government are making a bad stand, and they have a chance to reverse this decision. Will they not do that?

“Could be at risk” has a very broad definition. The figures are absolutely clear, and I suggest that the hon. Gentleman looks at them.

Unlike in many countries that are dominated by vast corporate agribusinesses, the British rural landscape, including that of my Stratford-on-Avon constituency, is defined by small, family-run farms. They are our local food producers, and they are part of our communities. How do the Government plan to protect this heritage against the pressure to sell to multinational agribusinesses in the face of a significant inheritance tax burden?

We treasure our wide range of farms, which are very different in different parts of the country. The agricultural budget is at its highest level ever and it will provide support, particularly to small farms. The previous Government ended the five-hectare minimum level. I strongly support that and it will continue to be the case.

Farming families in West Suffolk feel deep anxiety, in common with those in other constituencies, as hon. Members from across the House have explained. When those families hear the Minister say that they do not understand the detail, or that they should listen to commentators who agree with the Minister but not them—commentators who probably have nothing to do with farming in the first place—they will be furious with him. Will the Minister apologise to those people? If it is not such a big deal, will he explain why more than 130,000 people have already signed the NFU petition telling him to change the policy?

At no point did I say that farming families did not understand the detail. What I asked was for Members on the Conservative Benches to look at the detail, because when they look at the detail, they will find the truth.

Family farmers in my constituency of Bicester and Woodstock are left confused and angry by this betrayal by the Government over APR. They want to know whose daft idea it was. Will the Minister clarify whether the measure was proposed by DEFRA, as part of the stability for farms that he outlines, or did it come from the Treasury?

There is nothing daft about putting this country’s finances on a sound footing. I say to the hon. Gentleman’s constituents, if they want a decent health service, schools and transport, this Budget will deliver that.

May I politely suggest to the Minister that the time for his weekend reading was before deciding the policy, not afterwards? Farmers in my constituency, including Jonathan Vine-Hall, tell me that the change to the relief will make it financially non-viable to pass on his very typical 450 acre farm. Does the Minister agree with me that the likely outcome of that will be that disinterested investors will buy the farm instead, which is exactly what he seeks to avoid?

The likely outcome will be that people will put arrangements in place to pass on their farms at the appropriate time, pulling more younger people into farming, which will be a good thing. My overall message to farmers across Britain is, “This Government are on your side. We will support you. Look at the agricultural budget and the money that has been paid out of the flood budget. We are with you. Don’t listen to these people.”