Clause 1

Lizzi Collinge Excerpts

Monday 12th January 2026 Commons Chamber

[Carla Lockhart]

Much clarity is needed, and I trust we will get that clarity in today’s debate. A farm worth £5 million owned by a single farmer could face a tax bill of around £500,000, while a farm of the same value owned jointly would face no tax bill at all. That is not fair; it is arbitrary and discriminatory.

Farmers are asset rich but cash poor. Many family farms exceed £2.5 million in value, and not because they are wealthy enterprises, but because land values have risen dramatically while margins remain tight and incomes volatile. As my hon. Friend the Member for Strangford (Jim Shannon) has outlined, an estimated 25% of farms in Northern Ireland fall above that threshold. Those farms are the backbone of our economy. The move from 100% relief to 50% relief above the cap is not a minor adjustment; it is a fundamental weakening of agricultural property relief. It risks forcing families to sell land, reduce the scale of their business or take on unsustainable debt—not because their farms have failed, but because their tax system has failed them.

I will quickly address new clause 1, which would require the Chancellor to publish a Northern Ireland-specific impact assessment. That should not need an amendment; it should be done as a matter of course. But this sudden interest in farming by the Alliance party is not lost on the folks at home. Not only are farmers at home battling the Labour Government’s anti-farming policies, but they have an Alliance Farming Minister who is tone deaf to the needs of farmers—a Minister who supports climate change extremism, who is further regulating the industry, and who is blaming farmers for the algae bloom on Lough Neagh while ignoring the 200 million tonnes of waste from Northern Ireland Water. Farmers in Northern Ireland are getting it from all quarters, and I, for one, make no apology for standing up tonight against this tax grab, but also against the policies in Northern Ireland that are damaging our farms.

A clear principle is at stake. People are taxed throughout their lives on their income, on their profits and on what they produce. To then tax those same assets again, simply because someone has died, is a double whammy. It is double taxation in all but name, and it penalises families at the very moment of loss. That is a principle I cannot support. It is immoral. A death tax is immoral. This policy will drive despair—not prosperity—into farming communities if it is allowed to stand. The Government still have the opportunity to do the right thing. Politics is about doing the right thing, and the Minister knows that the right and honourable thing to do is to consign this policy to the farmyard manure heap. If the Government choose not to, they must accept the lasting damage that this policy will inflict on family farms, rural communities and our national security. The outcomes are on this Government’s shoulders.

[Lizzi Collinge (Morecambe and Lunesdale) (Lab)]

As someone who represents a large semi-rural constituency, I am glad to have this opportunity to speak about the changes to agricultural and business property relief and why they matter for farming families and for fairness in our tax system. I welcome these changes, which recognise the reality of the asset-rich, but cash-poor nature of farming, where land might be worth a lot of money by most people’s standards, but that value cannot be realised in cash terms unless it is sold, particularly for non-farming use.

The aim of this inheritance tax policy is simple: fairness for hard-working family farms, but no open-ended tax breaks for the wealthiest. The Government are reforming outdated tax relief rules to ensure that the very largest estates make a fair contribution. Under these changes, small and medium-sized agricultural estates will remain unaffected by inheritance tax, with full relief still applying up to £2.5 million for an individual, rising to £5 million for a married couple, who will be able to transfer their allowances to each other, as is the case for personal inheritance tax. I am slightly surprised that those on the Conservative Benches are only now discovering that concept, given that it has been standard for many years.

What will change is the ability for the ultra-wealthy and the very largest estates to use agricultural land as a tax planning tool, driving up land prices and shutting out genuine farmers, while making little or no contribution in return. The farmers I have spent time with—over many meetings in village halls, at farmhouses and at the Westmorland county show, which I highly recommend—were clear that they understood the need to prevent the ultra-wealthy avoiding tax, but they were rightly concerned that the threshold of £1 million, as originally proposed, would inadvertently catch ordinary family farms. Local farmers and solicitors were extremely generous in sharing their financial information with me, which was sent directly to the Treasury. It showed the reality of the finances of farming.

I must make special mention of a local Labour party member, Karenna Caun, who organised for that information to be gathered and who helped me to reach out to farmers and related businesses, particularly in the Lune valley. The NFU and others have already recognised that these changes materially improved the position for farming families. These changes have taken on board concerns raised by rural Labour MPs, but with these reforms targeted at the biggest estates, the Government expect to raise £300 million a year by the end of the decade. That is money we can put into local GP services, rural bus services and village schools, giving our children the best start in life. Yes, some of the largest estates will pay more after these changes.

[Robbie Moore]

The hon. Lady has mentioned, I think two or three times, that it will be possible for the ultra-wealthy to be exposed to the inheritance tax liability. However, having a huge asset base that may be worth a great deal of money does not mean having a good income. A business could have a cash flow that is not generating any revenue to keep that business going. Is she classifying businesses and farming families in her constituency who might have an asset base of over £1 million as very wealthy people?

[Lizzi Collinge]

I suspect that the hon. Gentleman missed the third paragraph of my speech, in which I talked about the asset-rich but cash-poor nature of farming. Land may be worth a lot of money according to most people’s standards, but it may not be possible to realise the value in cash terms unless the land is sold, especially for non-farming uses. As he knows, I am talking about the threshold that has now been set at £2.5 million for individuals and £5 million for couples, not the £1 million threshold that I and many of my colleagues have succeeded in changing.

I make no apology for supporting a progressive policy that closes tax loopholes for the wealthy. I am thinking of people such as James Dyson, who talked proudly about buying up agricultural land in order to avoid tax. How can anyone defend multimillion-pound estates paying zero inheritance tax, when we are digging ourselves out of the fiscal and social hole made by 14 years of Conservative government?

[Mike Wood]

Will the hon. Lady give way?

[Lizzi Collinge]

I will not.

Our farmers have been battered by Brexit, with their incomes and standards of living falling drastically since 2016. Crop yields have been impacted by flooding, and trade deals agreed by the Conservatives sold them down the river. Those 14 years of Conservative government were just as bad for my farmers as they were for the rest of us. I am afraid that I am not particularly inclined to take criticism from the Opposition Benches. The Liberal Democrats and the Conservatives are against taxing the largest estates. They are saying that estates that are worth more than £2.5 million, or £5 million—[Interruption.] I have listened closely to the debate, and I am confident in my quoting of what has been said by Opposition Members. I thank the hon. Gentleman for his chuntering from a seated position.

I grew up in a tiny village in Cumbria. With the surrounding farms, it numbered about 300 people. We had no shop, and there was one bus to Carlisle a week. We did have two pubs—we knew how to have a good time. I will take no lectures from Opposition Members about what country life is really about, and I certainly will take no lectures from the wealthy Reform MPs—they are not in the Chamber now and have taken no part in the debate—who seem to enjoy cosplaying as country folk, in a display of what I think is patronising political opportunism. We need to ensure that there is fairness in our inheritance tax system, which is why I urge all Members to support clause 62 and schedule 12.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

Clause 62 shows that this Labour Government simply do not understand farming communities. Persevering with an ill-thought-through family farm tax that treats business assets as personal wealth, even with the recent concession, will continue to harm investment in food security and rural growth. At the very least, it should be paused entirely until the publication of an independent impact assessment identifying the true extent of the changes to farming livelihoods. I therefore support amendments 42, 43, 44, 45, 46 and 47, the combination of which would ensure that the full inheritance tax relief remained in place for family farms.

It is time that the farming sector moved away from survival mode to become a thriving industry once more, but, against a background of huge cost pressures, farmers are being asked to do more with less. They face input costs that are 30% higher this year than they were in 2020, while the £2.4 billion farming budget has barely changed since 2007. That alone has presented difficult business conditions, but in addition, during 2025 farmers were forced into making plans towards a gloomy future surrounded by all the family farm tax uncertainties. As a result, many have delayed making any investment in their businesses. Farmers such as those in Glastonbury and Somerton are the catalysts of growth in rural areas, but they now need confidence to make the investments that they have put off after 14 months of angst and frustration.