Debate contribution: Farming Families: Autumn Budget 2024

Debate contribution by Mr Andrew Muir on 19 November 2024.

MLA

Mr Andrew Muir

Party at the time

Alliance Party

Date

19 November 2024

Type

Debate contribution (made as a minister)

Business

Private Members' Business

Heading

Farming Families: Autumn Budget 2024

Assembly identifier

Official Report component 4666423

Read the official Assembly record

Text

Thank you very much, Mr Deputy Speaker. I will address the two aspects of the motion. One is the earmarked funding, and the other is inheritance tax. I will start with inheritance tax, because it has been the issue of last night, of today and of recent weeks. As Members will know, the issues raised in the motion are a cause of significant concern and uncertainty not only for our farming community but for me as Minister of Agriculture, Environment and Rural Affairs. I spoke at the UFU rally last night, and the size of the turnout and the passion expressed showed how deep the concern is. The worry about it is significant. Whilst I appreciate that decisions on taxation are a matter for the UK Government and are not devolved to the Assembly and our Executive, I was disappointed by the lack of engagement with devolved Governments in advance of the Budget announcements, given the far-reaching impact of the changes on other policy areas that are devolved. The changes announced to the limitation of agricultural property relief and business property relief at a rate of 100% to a combined value of £1 million came as a shock, and they have, rightly, caused real concern and anger in the local farming community. As was said, £1 million may sound like a significant value, but it does not amount to a large area of land, especially in Northern Ireland, where prices are the highest in the UK and Ireland and are likely to average around £15,000 per acre by the time that the change would come into effect in 2026. Land values bear no resemblance to the income-earning potential of land, and they never materialise where land is passed down through generations of farming families and continuously farmed. Due to the policy change, that value could give rise to large tax bills. Analysis undertaken by my Department suggests that the proposed tax relief change will affect around one third of Northern Ireland farms because the value of land owned by the farm exceeds £1 million in agricultural value. Those farms account for 60% of owned land and the majority of farm production in Northern Ireland. Furthermore, a large proportion of farms of significant size will be affected, including 75% of those in the dairy sector. Therefore, looking solely at the number of farms does not measure the impact on the sector. The limitations on APR and BPR tax relief will have far-reaching and potentially disproportionate impacts locally. I do not agree with the UK Government's determination that the tax change targets wealthy landowners rather than family farms. It makes no distinction between the two. Land valued at £3 million and owned by a farmer is treated the same as it would be if owned by a non-farmer. I met the Northern Ireland Secretary of State in the days after the Budget to outline the concerns that have been expressed in the Chamber. I also expressed those concerns yesterday to the Minister of State at the Department for Environment, Food and Rural Affairs, Daniel Zeichner, in a meeting with other devolved agriculture Ministers, and I will continue to do so in meetings with other UK Ministers. I am also seeking to arrange a meeting again with the Ulster Farmers' Union to discuss this specific issue next week. I have encouraged the UK Government to engage further with the farming community so that they can have a better understanding of the concerns being raised, and I urge them to look again at the issue, given the disproportionate impact on family farms in Northern Ireland. The ability to pass farms down through generations of farming families is crucial to securing the future of our agri-food sector. I am pleased to say that the letter signed by the First Minister, deputy First Minister, Finance Minister and me was sent to the Chancellor of the Exchequer yesterday, following work between Caoimhe Archibald and me, urging the UK Government to rethink their approach. On the specific issues in the motion, I need to be clear that it will not be possible for my Department to mitigate the impact of the inheritance tax changes by refunding tax bills. However, I will do all that I can to make the case to the UK Government that they rethink the issue, and I encourage farmers to seek advice from a professional tax adviser on how to minimise potential tax liability via tax planning. Food prices are determined by the market and are outside my control. I wish to see price stability, with food being affordable and prices at a level that delivers an adequate return for farmers. On a positive note, my Department's new farm support and development programme contains a farming for the generations scheme, which is being rolled out as a pilot. The pilot scheme aims to raise awareness of the need for succession planning on farms and to support farm families through a three-phase approach: planning for succession, developing the successor and supporting the lead generation in the farm family. It will also link farmers without a family successor to new entrants to provide access to land and other resources. Evaluation of the pilot scheme will be input to a future farming for the generations scheme. Hopefully, that addresses the issue in relation to the inheritance tax matter that was raised in the debate. I am very clear that I stand four-square in support of farmers in their opposition to the proposed changes to inheritance tax. There is a saying: united we stand, divided we fall.

We will not be divided. Other people may want to do that, but we should not do that in here. We need to stand united. In our approach to the UK Government, we need to be clear that we are very much united in supporting our farming community and in our opposition to the proposed inheritance tax changes, because that is the only way that we will be able to chart a better way forward. It is absolutely key that we do that.

On earmarked funding — the terms "earmarked" and "ring-fenced" are interchanged — and that change to budgets, that represents a break from the past. The money was previously received under the common agricultural policy and the common fisheries policy. Then, following our departure from the EU post Brexit, it was earmarked, until the end of March next year, by the previous UK Government. Although the existing funding for agriculture, agrienvironment, fisheries and rural development will continue to be earmarked by Treasury until 31 March next year, it is important, in light of the change announced by the Chancellor on 30 October, to provide certainty on the funding after that. The announcement on inheritance tax has slightly overshadowed that, and it is important that we consider it. Whilst it is positive that funding levels have been maintained at £332·5 million, it is disappointing that funding has not been increased in line with inflation. I recognise the significant contribution that agri-food and fishing businesses make to our economy and rural communities and the need to continue to provide support to ensure that our farm businesses can operate sustainably while playing their full part in the action needed to protect and enhance our environment, improve animal health and reduce greenhouse gas emissions. I have therefore formally asked the Finance Minister to ensure that the resource DEL that has been baselined in the block grant is treated as Executive earmarked — other people would use the term "ring-fenced" — funding for agriculture, agrienvironment, fisheries and rural development purposes and uplifted in line with inflation as part of the Executive's 2025-26 Budget exercise. I consider that important to support vital work to improve our environment and water and air quality and to safeguard food security. The Budget announcement has created considerable uncertainty about funding for agriculture, agrienvironment, fisheries and rural development. However, there is an opportunity to address that in the Budget for the next financial year and to deliver for farmers, the fishing sector and our environment. I shall continue my engagement with the Minister of Finance and other Executive colleagues as part of the ongoing Budget 2025-26 exercise to seek that that funding is earmarked by the Executive following the end of the earmarking for three years by Treasury and the previous receipt of that funding from the EU as part of our participation in the common agricultural policy and the fishing policy. Hopefully, I have addressed the issues in the motion. I have concerns about the funding. You can see that I have been working with the Finance Minister to address those. Some of the issues arise from Brexit. We got that funding from Brussels in seven-year tranches, and now that is going. I am working through the solutions and the issues, and I will not be found wanting on that, but we need to work together.

1,487 words. Text as published by the Northern Ireland Assembly.

Assessment

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Assessed 21 October 2026 at 11:38 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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