Property Taxes

Ann Davies Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Ann Davies (Caerfyrddin) (PC)]

I begin by referring the House to my entry in the Register of Members’ Financial Interests.

I represent a rural, agricultural community. As we look forward to a Budget for Christmas, this Labour UK Government’s last autumn Budget remains of significant concern. The wide divide between rural Wales and Westminster was made clear as day last year when the Chancellor announced plans to restrict full inheritance tax relief from April next year to the first £1 million of combined agricultural and business property. Combining APR and BPR means that the asset value of the tools and the machinery necessary to operate a farming business are affected, as well as the agricultural land and property.

While the Government maintain that this policy will affect only about 500 estates a year and that small family farms will not be affected, the calculations of the Farmers’ Union of Wales and NFU Cymru show otherwise. When I told the Minister for Food Security and Rural Affairs that 92% of one local accountancy firm’s clients would be hit, it was totally dismissed, but now even the producers of the research used by this Government to justify their plans have conceded that working farmers are more likely to suffer under the policy than the wealthy.

[Edward Morello (West Dorset) (LD)]

Over half of UK farms have a net value of over £1.5 million. Farmers are already worried about the family farm tax and are now looking at the potential tax rises that the Government are floating for the upcoming Budget, including increased rates of inheritance tax and other forms of property taxes. These are our food producers, and they are writing to me to ask why they should continue to sow the seeds. Does the hon. Lady agree that farmers need a break?

[Ann Davies]

Absolutely, and I will come on to that in a minute. In Wales, between 75% and 90% of farmers will be affected by the policy, according to NFU Cymru and FUW.

It is clear that this Government’s APR changes will not hit tax-avoiding wealthy land hoarders. Instead, they will punish working farmers in Wales, whose income dropped by an average of 34% last year, forcing many to sell what their parents and grandparents spent lifetimes building. And it is not just farm business owners. Family Business UK estimates that the changes will cause a £15.5 million reduction in GVA in my constituency of Caerfyrddin alone, along with the loss of 282 full-time jobs.

The new inheritance tax rules will be introduced amid mounting financial pressures on our farmers, from the financial implications of bluetongue restrictions and testing requirements to the effect of Wales’s hottest summer on record on crops and pasture. Our rural businesses will also suffer, with car garages, food wholesale businesses and uPVC project businesses among those in my constituency that are hard hit by this Government’s BPR changes. All employ hundreds of my constituents.

We cannot afford to lose our rural businesses or our family farms. We cannot lose the knowledge, the heritage and the community—the work that sustains and feeds our nation. Ahead of the autumn Budget at the end of November, I call on the Government once again: please reverse these changes before it is too late. Diolch yn fawr.