Lord de Clifford (CB)

My Lords, I welcome a Budget with a notable change in direction for our nation’s finances. This Government’s ambition to improve the growth rate, productivity and public services and take control of the country’s debt is commendable. The need to raise taxes to fund these ambitions was clear, but it was not made clear in the election by either of the main parties. No one ever welcomes tax rises, but tax rises should be targeted at people who can afford to pay them. They should not force businesses to change fundamentally or individuals potentially to lose the way they earn a living and their way of life. I note my entry in the register; I work for a veterinary practice relying on the farming industry. The change to the agricultural property relief rules is devastating news to the farming community and has created a lot of anger. The community felt let down by the Government’s assurances made in speeches in the past year that APR would not change. The Government stated that 73% of farming businesses will not be affected by this change. This statistic is challenged by farming professional bodies such as the NFU and the Central Association of Agricultural Valuers. Is the Treasury able to publish more detailed figures that support this statistic? I understand why the Government wish to close a foreseeable inheritance tax loophole, but, when you do such a thing, there are always unintended consequences. That is why the farming community is so upset. Inheritance tax is something you can plan for, as my noble friend Lord Devon explained earlier, but these changes will leave many farmers who believed that APR would remain in place with no time to plan for a significant liability. Farmland is a unique asset. It differs from many other assets in that the value is high but the return is very low. It generates income only if farmed in some way. If we wish to protect our food security, environment, rural economy and the countryside that most of us love, we need to think again about this policy. In 2023 the average agricultural land value, according to Savills, was between £5,000 and just over £9,000 per acre, depending on land type. If you take a typical 450-acre farm—which is not a large farm—with mixed land types, the value alone could be over £3 million, without even considering the farm machinery, animals, farm buildings and farmhouses. So, even allowing for a possible £3 million exemption when a couple own a farm, there could be a tax liability of at least £200,000 or more. Where are these family businesses meant to find this money, as such a business may have a turnover of only £1 million? A family could sell land, but the result could be that the farm becomes unviable as a stand-alone business. Some upland hill farmers in Wales and Scotland may not be able to sell part of their land. Farmers cannot raise prices as they have extraordinarily little control over the sale price of the goods they produce; prices are set by supermarkets or food processers, based on a world food market. Farming is an industry that requires government subsidy to make business viable and to achieve food security and improve the environment. Therefore, why are we implementing a policy that will remove a possible £450 million from this industry in 2027-28? On behalf of the farmers of the UK, I ask the Minster whether a full impact assessment of these changes can please be done within the next year to assess the effect on medium to large family farms.