Finance (No. 2) Bill

David Chadwick Excerpts

Tuesday 16th December 2025 Commons Chamber

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

Wales is the poorest of our four nations. It has the highest levels of unemployment and the lowest wages. The family farm tax is yet another example of how this Government are going to hurt the Welsh economy with full knowledge of the consequences. They have decided to hit Wales, in whose economy agriculture is a major sector, with an extra tax. It is, quite frankly, an unacceptable and horrific way for this Government to start off.

Family farms are the backbone of our rural economy, the heart of our food system and central to the survival of many communities in Wales. People in Wales are shocked that this Labour Government have decided to come for one of our major industries. People in Wales are accustomed to the Conservatives unpicking our major industries and taking them out—they expect that—but they expect better from the Labour party.

When family farms are hit, the damage spreads far beyond the farm gate; it hurts vets, suppliers, hauliers, markets, local shops and rural high streets. That is why it was so deeply disappointing that 23 of Wales’s 27 Labour MPs chose to vote this policy through despite clear warnings from rural Wales. The scale of what is being put at risk is enormous.

[Tim Farron (Westmorland and Lonsdale) (LD)]

My hon. Friend’s communities are not dissimilar to mine; they are very rural and very mountainous, and upland farming is critical to his communities, as it is to mine. Does he think the Labour Government have failed to understand that wealth is not concentrated in the hands of famers in the way that they think? It is entirely possible to be an upland farmer in my hon. Friend’s patch or in mine and to be earning the minimum wage or, indeed, less—the University of Cumbria shows that the average upland farmer earns less on average than the minimum wage—and yet to be in a position, after inheritance tax is due, to be paying £20,000 a year or more while earning only £16,000. That is not right, is it?

--- Later in debate ---

[David Chadwick]

My hon. Friend is quite right to point to the struggles of upland farmers, who deserve to earn a living from their work—they are working people too, but they are not being recognised as such.

Agriculture and the wider food and drink sector supports more than 228,000 jobs in Wales and generates more than £24 billion in turnover each year. This is not a marginal industry; it is a pillar of the Welsh economy. Industry bodies have warned that these tax changes will force family farms to sell land or assets simply to meet higher liabilities, accelerating consolidation and driving our young people out of rural Wales, which damages our food security and local supply chains, hollows out communities and obviously undermines our tax base, too.

This is not just an economic but a cultural issue. Some 43% of people working in agriculture in Wales speak Welsh, compared with 20% of the population overall. To undermine family farming is to undermine Welsh culture and the Welsh language itself.

What makes this policy even harder to defend is the Government’s selective approach. Ministers have refused to act on supermarket profiteering—with Tesco alone seeing its profits rise by more than 100%—yet are content to squeeze family farms that are already grappling with rising costs and post-Brexit uncertainty. The Welsh Affairs Committee has called for this policy to be paused so that a Wales-specific impact assessment could be carried out. It is a grave mistake that that request has been ignored. This is becoming a familiar pattern for those of us from Wales. There has been rail underfunding, a refusal to devolve powers, including over taxation, and now a tax that threatens one of Wales’s most important sectors.

Time and again, Labour has advanced policies in this Parliament that would hit Wales the hardest, and waved them through regardless. The Welsh Liberal Democrats oppose this tax because we believe that family farms should form the spine of a prosperous rural economy. Rural Wales—in fact, the rural economy across the whole UK—deserves a plan for growth, not punishment driven by ideology.

The Welsh Government deserve a Government who understand the value, strength and work that our agricultural sector provides to rural Wales. I think of the tens of young farmers’ clubs in my constituency; they are run by incredible young people who form community groups and build the confidence of the young people in their communities, as well as running their family businesses. We need those young people to stay in Wales, run their businesses well, and create the jobs and employment that will enable rural Wales to prosper. Instead, they are being told by this Government, “No, we’re going to hit you with an extra tax”. This will fall on the shoulders of Welsh young farmers. The Welsh economy deserves a Government who understand Wales, and that is not what we are getting so far.