Contribution
What Government Members do not seem to understand is that when a highly sought-after scheme is closed, which is exactly what happened under this Labour Government in March 2025, demand inevitably builds up. That was coupled with the budget being reduced significantly. There was 18 months of this Government sitting on their hands, enabling demand to build. What was the result? When the scheme finally opened, it became a competitive scheme. On this Labour Government’s watch, it was “first come, first served”; those who got in were those who could press “send” the fastest. This Labour Government knew what the consequences would be, as was reported in The Times yesterday, but they carried on regardless. The result: approximately 40,000 farmers tried to get into the scheme, but only 12,200 were successful. The application window was slammed shut after just five and a half hours, all because the money had gone.
Last week, I stood in this Chamber and asked the Farming Minister very simple questions, but there were no answers. I will try again, so that he can address these in his summing up. The expiring agreements were worth more than £520 million, yet the SFI budget was cut to just £310 million. Where has the additional £210 million gone? It is vital that clarity and reassurance be given to our farmers. When will the Minister open SFI27? It is not good enough to say, “As soon as possible”; we need clarity. What will the Minister do for those who have agreements that are expiring, to stop the cliff edge in their cash flow? What budget has the Minister set aside for SFI27?
We must all remember that this situation comes on top of the Government’s disastrous decision to reduce de-linked payments dramatically, far more quickly than was ever agreed, to a measly £600 per farming business. I suspect that it costs the Government more in administrative charges to distribute those payments than it benefits each farming holding. Our farming businesses now feel the pain, financially and emotionally, as they struggle with their cash flow.
SFI is not some isolated incident; it is part of a pattern. Before Labour broke the SFI scheme, it crushed the family farm with its disastrous family farm and family business tax. Before the election, those on the Government Benches looked farmers in the eye and told them that they had no plans to change agricultural property relief and business property relief. In Labour’s very first Budget, which was its first opportunity to show rural communities up and down the country that it cared and understood them, it did not. It brought out the family farm and family business tax—a vindictive tax that strikes family farming businesses at their worst moment.
Each and every Labour MP who voted again last week to keep the family farm and family business tax should be ashamed of themselves. The narrative is, rightly, that there has been a partial U-turn—the threshold at which the tax applies has been raised from £1 million to £2.5 million—but that simply does not go far enough. Now, bizarrely, a person’s marital status can raise the threshold to £5 million. That seems ridiculous. Once the farmland, the farmhouse, the growing crops, the stocks, the machinery, the crops in store and the livestock have been valued, the value of a traditional farming business will be well above the £2.5 million threshold. That exposes any hard-working family farming business to an inheritance tax liability that they simply will not be able to afford. This was completely ill thought through.
That brings me to the Liberal Democrat motion before us, which only states that they regret
“the Government’s changes to Agricultural Property Relief”.
It makes no reference to business property relief. I thought that we were aligned on this issue, but clearly we are not. Many farming businesses rely heavily on business property relief. It covers trading assets not covered by agricultural property relief, including machinery, livestock, harvested crops and any rural diversification projects, including farm shops and holiday lets, so I am incredibly surprised that the Lib Dems do not also regret the Government’s changes to business property relief.