Contribution
My Lords, for over a quarter of a century, as founder of Cobra Beer, I produced beer in the UK with British-grown barley. I am proud of the high quality of our agriculture sector’s produce, leading to Cobra Beer winning 150 gold medals. Agriculture makes up just 0.6% of the UK’s GDP and, for over a decade, I helped and worked with the management of the family farm of my wife’s uncle and aunt, in the Free State in South Africa—thousands of acres comprising dairy, arable, sheep and cattle. I thank the noble Lord, Lord Roborough, for initiating this very important debate.
I ask the Minister about the closure of the sustainable farming incentive scheme—SFI. After Brexit, our farmers no longer had access to the common agricultural policy, which provided financial support to farmers through subsidies. How are farmers now going to be compensated for the loss not only of the CAP but of the SFI? Farming groups are of course worried about the inheritance tax relief reforms, with inheritance tax of 20% now being applied to family farms. The NFU thinks that this threatens family farms and food security, estimating that 70,000 farms could be affected. Surely there is an argument for reversing this harmful policy.
I give the Government credit for some of their initiatives—for example, extending the seasonal worker visa route for five years, investing £110 million in agritech through innovation programmes, establishing the National Biosecurity Centre to combat animal diseases and publishing a 25-year farming road map later this year. But would the Minister agree that we should prioritise farming in the coming spending review and increase the annual agricultural budget to £6 billion?
When it comes to the inheritance tax reforms, they are supposed to affect fewer than 500 estates, according to the Government. But what if a farmer passes away within the next seven years without having had the chance to plan the transition? A survey by Family Business UK has found that over 200,000 jobs in family-run businesses and farms could be lost due to the Government’s decision to cap business and agricultural tax relief. The inheritance tax changes to take effect from next year limit the relief, as I said earlier. Some 55% of family businesses have paused or cancelled investment, nearly a quarter have stalled hiring or cut jobs, the farming sector alone could lose almost 30,000 jobs, and the changes could reduce economic value by £14 billion. Surely, this policy is going to backfire, leading to sales of farms and lower taxation revenue for the Government. Would the Government consider reviewing this policy?
There are alternatives, such as a targeted tax relief for working farmers; a government-underwritten insurance for elderly landowners; exempting the elderly, for example, those over 80, from tax changes; and separating the agricultural property relief from business property relief. The chair of the EFRA Committee, Alistair Carmichael, said:
“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. … These changes will have a ripple effect across the whole rural community”.—[Official Report, Commons, 4/11/24; col. 24.]
In some cases, farms will simply leave too little income for the inheritor, who will have too few other resources to pay the tax and will be forced to sell part or all of the farm.
To build on what the noble Lord, Lord Kakkar, said about access to medical care in rural areas, I am proud to be the London chair of the ambassadors of the Cambridge Children’s Hospital, which is going to be built in conjunction with the University of Cambridge. Do noble Lords realise that, in the whole of East Anglia—a rural area—there is no children’s hospital? They have to go to Birmingham, where I was chancellor of the University of Birmingham for 10 years, or they come here to Great Ormond Street. We will now have a children’s hospital for this large rural area.
With regard to self-sufficiency and food security, the UK produces 60% of domestic food consumption by economic value. We produce the majority of our grains, meat, dairy and eggs, yet we have to import 40% of our food. With the US tariff wars now destabilising global supply chains, the NFU is concerned, because the US is our second-largest export market, and the largest market for British agri-food products, outside the European Union. Our farmers are proud of the quality of what we supply. Our Secretary of State for Business, Jonathan Reynolds, has said that there is a red line that Britain will not accept hormone-treated beef and chlorine-washed chicken—a major sticking point in previous negotiations.
To conclude, it is so easy to take the farming and agricultural sector for granted. It should always be a top priority for any Government at any time.