Inheritance Tax: Impact on Rural Businesses

Baroness Rock Excerpts

Thursday 1st May 2025 Lords Chamber

Asked by

[Baroness Rock]

To ask His Majesty’s Government what assessment they have made of the impact of changes to inheritance tax rules on rural businesses and economic growth.

[Baroness Rock (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and draw attention to my interests as set out in the register.

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, the Government have taken difficult decisions on welfare spending and on tax necessary to repair the public finances and rebuild public services. This includes measures to better target agricultural property relief and business property relief. These measures mean that, despite the difficult fiscal context, we are maintaining significant levels of relief from inheritance tax beyond what is available to others, and that almost three-quarters of estates claiming agricultural property relief and business property relief will not pay more inheritance tax. The independent Office for Budget Responsibility does not expect the reforms to have a significant macroeconomic impact.

[Baroness Rock (Con)]

I thank the Minister for his Answer, but these changes are already stifling investment. A Farmers Guardian and Tenant Farmers Association joint survey reports that 55% of tenant farmers will invest less in their farms and 25% of tenant farmers expect their landlords to take back land for non-farming purposes and reduce their investment. Furthermore, over half say their mental health is suffering. They fear eviction. I have had many heartbreaking messages from farmers who fear they just cannot go on. Is the solution not to follow the recommendation in the Rock review to allow landlords letting land for eight years or more to be able to include the value of that land as part of the zero-rate threshold for inheritance tax?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. I fully recognise that she has a great deal of expertise in this area and I pay tribute to the work that she has done, particularly on behalf of tenant farmers. I do not accept the premise of her question. I fully respect the commitment that has gone into the survey that she spoke of but do not necessarily accept its conclusions. Our commitment to tenant farmers remains steadfast, which is why we are investing £5 billion in farming over two years, the largest budget for sustainable food production in our country’s history.

I take seriously what the noble Baroness says about mental health. Mental health is of course an issue that the Government take extremely seriously, which is why we are working to improve mental health services across the country, including through plans to recruit an additional 8,500 mental health workers. We fully understand the strength of feeling on this issue, and we urge people to make sure they use the correct data to prevent further inflaming the debate.

International Women’s Day

Baroness Rock Excerpts

Friday 8th March 2024 Lords Chamber

[Baroness Rock (Con)]

My Lords, I join colleagues in welcoming the esteemed noble Baroness, Lady Casey, and I greatly look forward to her maiden speech. Women are too often the unsung heroines in their contribution to farming and agriculture, but their profound impact goes beyond mere cultivation: it extends to shaping communities, fostering sustainable practices and contributing significantly to the rural economy.

During World War II, when many men were away fighting, women in the Women’s Land Army played a crucial role in maintaining food production and addressing the labour shortage in agriculture. Land Girls took on a wide range of responsibilities, including ploughing fields, planting and harvesting crops, and tending to livestock. They worked in often challenging conditions, but they contributed significantly to the nation’s food supply and supported the war economy.

Today, women constitute an increasing and significant portion of the agricultural workforce, playing pivotal roles across the value chain. Here I pay tribute to Minette Batters, who, when she was elected NFU president in 2018, became the first woman to hold the position in the organisation’s 100 year-plus history. Minette has been an influential figure in agriculture, championing and advocating for the interests of farmers and addressing the numerous challenges faced by our farming communities.

While I was working on the Rock review, looking at the future of agricultural tenancies, I travelled the length and breadth of England, talking to a wide variety of stakeholders, from tenant farmers to landowners and from land agents to professional agricultural organisations. I was struck by how women are the backbone of our rural communities. We do not just have farmers; we have farming families. Everyone in the family mucks in, and women are no longer limited to those traditional roles. Increasingly, we see women engage in agribusinesses, driving innovation in farming practices and involved in all-important farming mental health charities, such as the FCN and Yellow Wellies.

But it saddens me to say that I also saw the negative side when working on the Rock review—not really from farmers themselves but more from some professional organisations. There was a nasty campaign to undermine me and to say that I did not have experience or knowledge and that I, a tenant farmer, did not know anything about agricultural tenancies. I am not sure that would have happened if I had been a man.

Agriculture is often considered a male-dominated industry, but the importance of women in agriculture and rural economies cannot be overstated. Their contributions span from the fields to the markets, shaping the very foundation of food security and economic development. That economic impact of women extends beyond the farm gate. Rural economies heavily depend on the contributions of women, who engage in wide-ranging agricultural activities. The income earned by these women in rural areas is frequently reinvested in their families and communities, fostering a ripple effect of economic development and leading to increased prosperity in rural areas.

Education and training are also key components in enhancing the role of women in agriculture. Investing in education equips us with the skills and knowledge needed to adopt modern farming practices and to use climate-smart agricultural technology, contributing to better environmental outcomes. Creating supportive networks for knowledge exchange among women in agriculture can also be instrumental. Mentorship programmes, forums and co-operative networks can all help women share experiences, learn from each other and collectively address challenges they face in the sector.

I am delighted that Farmers Weekly has launched a new campaign, Level the Field, to bring about real change that will make agriculture more equitable and more inviting for women. The campaign looks at how to build a resilient and gender-diverse business, how to recruit and retain talent and how innovation will increase productivity. All these can be enhanced by gender equality. Indeed, studies consistently show that, when women are given equal opportunitiesin agriculture, there is a substantial increase in productivity and economic growth. Closing the gender gap can lead to a more efficient and sustainable agricultural system.

UK agriculture is facing its biggest upheaval since the land girls worked on farms in the Second World War. Running a viable and profitable business is a struggle for many farmers, who are losing direct payment supports and have high input costs and considerable labour shortages, particularly in dairy and horticulture. Does the Minister agree that, because of these challenges, we need to attract more women to farming careers and make it a more inclusive environment?

In conclusion, let us sow the seeds of change and cultivate a future where the contributions of women in farming are celebrated and valued. Addressing gender disparity in agriculture is not just a matter of social justice to build resilient, sustainable and prosperous rural communities. It is also a smart economic move.