The main item of business when the House of Commons met on Monday (11 November) was a general debate on rural affairs, an early opportunity in this Parliament for MPs to discuss the full range of issues affecting rural communities. Ahead of it the Countryside Alliance took the opportunity to re-issue the Rural Charter, our manifesto setting out priorities for government action, to all MPs.
Opening the discussion the Secretary of State for the Environment, Food and Rural Affairs, Steve Reed MP, framed it as an opportunity to discuss the impacts of Labour’s controversial Budget on rural communities. He reiterated the government’s claimed appreciation that food security is national security.
Mr Reed spoke of government investment in agriculture but was swiftly assailed by opposition interventions castigating the Budget’s crackdown on inheritance tax relief on family farms. As Defra Secretary he was in no position to announce a reversal. Instead, he continually repeated the line – which we and others, not least opposition MPs, have questioned – that most family farms would not be affected. His defence ran as follows:
“Currently, 73% of agricultural property relief claims are less than £1 million. An individual farm owner can pass on up to £1.5 million and a couple can pass on up to £3 million between them to a direct descendant, free of inheritance tax. If a couple who own a farm want to pass it on to a younger relative and one partner predeceases the other, each of them has a £1 million APR threshold that they can pass on. Add those together and that is £2 million, plus the £1 million that a couple with a property can pass on to their children. For most people, that is an effective threshold of up to £3 million to pass on without incurring inheritance tax. Any liability beyond that will be charged at only half the standard inheritance tax rate and payment can be phased over 10 years to make it more affordable. Farmers will be able to pass down their family farm to future generations, just as they always have done.”
Put that way it all sounds rather rosy, but it skirts over his reliance on farms being owned by living couples using their entire personal inheritance tax allowance on the passage of the business, alongside the remaining Agricultural Property Relief (APR). He had to clarify that his figures were derived from HM Treasury, which also said the changes would affect 500 farms per year – equating to 20,000 farms over a generational cycle of 40 years. He said the measures were necessary to stop the very wealthy using landholding as a means of avoiding inheritance tax but, as we have argued, the mechanism the government has chosen appears to have been targeted poorly.
He went on to reference government responses to an array of other challenges facing farming, including flooding, animal disease, housing and the broader rural economy.
Victoria Atkins MP opened the debate for the Opposition, debuting as Shadow Defra Secretary. She wasted no time in characterising the government as “a city-dwelling, socialist Government who do not understand or care for the rural way of life,” maintaining that in the Budget, “the Chancellor laid careful plans to break the farming sector, the wider rural economy and our food security.” She based her speech on three promises she accused the government of having broken: in the changes to APR, in accelerating the reduction in delinked payments and in hiking employers’ National Insurance.
Tim Farron MP, as Defra spokesman for the Liberal Democrats, attacked both main parties with gusto, saying:
“The Secretary of State will seek to be less disastrous for rural communities than the Tories who went before him. That is not a very high bar to clear, but looking at the Budget, I am concerned that he may not find that as easy as he thought.”
He reiterated his party’s opposition to the APR changes, also discussing agricultural subsidy, housing, services and trade.
The remainder of the debate saw three new rural MPs making maiden speeches: Josh Newbury (Cannock Chase, Lab), Chris Kane (Stirling and Strathallan, Lab) and David Taylor (Hemel Hempsted, Lab). A notable contribution came from Greg Smith MP (Mid Buckinghamshire, Con) who raised the Equipment Theft (Prevention) Act 2022, a set of measures to combat rural crime that he introduced as a Private Member’s Bill in the last Parliament with our support and indeed, that of the Labour Party. He highlighted the need for government action in setting regulations to allow the Act to function. We wrote to the government recently to press this important case, but on this occasion the point went sadly unanswered.
These deliberations were followed by an Adjournment Debate brought by Aphra Brandreth MP (Chester and South Eddisbury, Con) on mental health in farming and agricultural communities. She argued that mental health within these communities has reached the point of crisis. This is another issue on which we have researched and campaigned.
As the voice of rural communities, the Countryside Alliance opposes the changes to Agricultural Property Relief that the Chancellor announced in the Budget. To help us amplify that vital message, please join us in lobbying your MP to Stop the Family Farm Tax today.