Clause 1

Sarah Dyke Excerpts

Monday 12th January 2026 Commons Chamber

[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.

[Dr Savage]

I thank my hon. Friend for her determined and dedicated advocacy on behalf of the farming community, especially around mental health. Although my farmers and I welcome this U-turn, I wonder how much damage has been done, not just to the farming sector directly but to the many businesses that surround the farming sector—the suppliers of equipment, grain and so on. I wonder how much damage has been done to the economy of our country, and how many irrevocable decisions have been made about the future by farmers and others in the farming industry. Does my hon. Friend agree that the Government must get it right this time around?

[Sarah Dyke]

Absolutely. There is no doubt that the agricultural supply chain has been affected by the torrid 14 months of uncertainty caused by the family farm tax. The Prime Minister and the Chancellor speak consistently of growth, but their damaging policies have crippled family farms. Some 49% of farm businesses have paused or cancelled investment, 10% have downsized their operations, and 21% intend to do so before April this year.

Our farmers pride themselves on being resilient and getting on with the job, but the long-awaited and delayed Batters farming profitability review summed up the impact of the family farm tax well: it stated that the sector was “bewildered and frightened”. Following the Government’s last-minute concession, I am pleased that some farmers—such as David, who farms in Compton Dundon in Glastonbury and Somerton—are now fully exempt, but this comes after more than a year of sleepless nights, and we know that David is not alone. If the reforms are expected to raise only around £500 million a year, why have the Government been so willing to impose this level of disruption and uncertainty on family farms for a relatively small return to the Exchequer?

The Government’s whole attitude toward family farming communities has been hugely disappointing, to say the least. At the end of last week, after months of silence, we finally heard the details of the 2026 sustainable farming incentive, but despite this announcement, England is still on course to be an outlier in Europe, because English farmers will not receive any direct support in fulfilling their primary mission and motivation, which is to produce food. After being taken for granted and ignored by the Conservatives for so long, it is no wonder that half of British farmers have little confidence in this Government’s vision for farming, and many do not believe that this Government take food security seriously at all.

I want to be clear that although the Liberal Democrats broadly welcome this concession, and although raising the thresholds will go some way towards mitigating the devastating impacts on the industry, this does not negate the year of stress and anxiety that farmers have endured, and many will still be hit by this tax. Many farmers in Glastonbury and Somerton, and across the constituency, run their businesses in multi-generational partnerships or extended family partnerships. It is totally outdated that this Government believe that farm businesses are managed by married couples. So many businesses will not benefit from the combined spousal allowance of up to £5 million, and it seems grossly unfair that if two farms are valued the same, one could be free of IHT, while the other could be landed with a huge tax burden.

Additionally, although the anti-forestalling rules remain in place, they deny those over 65, or anyone who dies within seven years of making a transfer, the ability to manage their tax affairs in a sensible way. The rules also put a massive burden on those who are over 75. The Liberal Democrats are clear that this is an unfair measure, which is why we have proposed new clause 7. It would ensure that a review of the provisions takes place.

Although the Environment Secretary has declared that there will be no more changes to the family farm tax, I hope that the Government have recognised the scale of the damage that they have done to British agriculture. British farmers produce a public good; they are the linchpins of our country’s food security and therefore our national security. In an ever more volatile world, this is more important than ever. This Government must not let British farmers down again.

[Markus Campbell-Savours (Penrith and Solway) (Ind)]

I rise to speak in favour of Government amendment 24 and the associated amendments that will increase the 100% allowance cap for agricultural property relief from £1 million to £2.5 million. In December, I believe I closed my last speech on this issue with a plea for the Government to listen to my more reasonable rural colleagues and to change course. I said that it was not too late. It was a plea, but for many of my constituents it was a prayer, and much to the relief of many farmers, it was a prayer answered on 23 December.

It would be churlish of me not to thank the Government for seeing sense, as it would be not to thank the Members from across the House who have raised this issue consistently over the last year. While this amendment falls short of the full U-turn I would have preferred, today I will vote with the many rural Labour MPs who lobbied Ministers for many months to see this change. They may not have joined me in the No Lobby to vote against Budget resolution 50, but I have no doubt that we would not have seen a change of course without what I believe the Government have called their “constructive engagement”. I know what many of them did, and I hope in time that their constituents and their farmers know what they did, too.

I regret being placed in a position where I voted against the Government, but not to do so would have broken a promise. However, I believe the Government had more than ample time to reconsider this policy. To see colleagues whipped to vote for the measure days before the Government proposed amendments that some colleagues had called for over a year ago caused unnecessary pain. On that, I hope lessons are learned. Now, Whip or no Whip, I look forward to supporting this Government in their important task of helping all working people thrive.