This week, I led a Westminster Hall Debate on the future of Agricultural Property Relief (APR) and Business Property Relief (BPR). With the Autumn Budget looming, farmers and family business owners are anxious about potential changes to these vital reliefs, and it was important to voice their concerns.
The debate brought together MPs from across the House, echoing the same sentiment I have heard from my constituents in Gordon and Buchan. From the four corners of the UK, the message was clear and consistent: APR and BPR are not tax loopholes but lifelines for hardworking farmers and family businesses.
Why are these reliefs just so important? As with so many things, it comes down to cash. Or, more specifically, the liquidity of assets. While farms and family businesses may have capital value in land, buildings, or other assets, they cannot realise this without selling and losing the ability to operate, innovate and develop. Or at the very least, losing the scale necessary to operate competitively and efficiently. Put simply – many family businesses will cease to exist without these reliefs.
The statistics are sobering: 17% of farms failed to make a profit in 2022/23, and nearly 60% made less than £50,000. These figures underscore the precarious financial situation many farmers face.
In a recent poll by the Country Land and Business Association, 86% of landowners and farmers said it was ‘likely’ that some or all of their land would have to be sold upon their death if inheritance tax reliefs were scrapped, and 90% said this would damage the UK’s food security in the long run.
Food Security is National Security. We can all agree on that (indeed, it was in Labour’s manifesto). Any taxation changes that threaten the ability of farmers to farm, retain their holdings, or invest in their holdings to increase efficiency and resilience is a retrograde step.
But this debate wasn’t just about numbers, statistics, and bottom lines. It was about the very fabric of our communities, particularly those which are rural, least connected, and, therefore, already facing tougher employment and economic conditions. In Gordon and Buchan, like many rural areas across the UK, farms are the bedrock of the local economy. They support a vast network of businesses, from suppliers to food processors, vets to farm shops and other forms of hospitality. During the debate, I shared an example from North East Scotland of a single farm that engages with 92 local businesses. The potential domino effect of a single farm closure on these interconnected rural economies cannot be overstated.
The environmental implications were another key point I raised. Family farms play a crucial role in land management, stewardship, and community concerns such as flood prevention. If these farms are forced to sell, we will lose generations of engaged, responsible family farmers who, for generations, have managed their land not just for profit and shareholder interests but for the public good.
While much of the focus was on agriculture, I also emphasised the importance of BPR to non-agricultural family businesses. With 5.3 million family businesses in the UK employing over 14 million people, the stakes are incredibly high – not just for the business owners but also their employees. These businesses contribute £225 billion annually to the Treasury, and their continued viability is crucial for both urban and rural economies. Losing even a few family businesses will cost the Treasury. So, the removal of these reliefs does pose a cost vs benefit question for the Chancellor, not just for tax income now but also for losses in the future for businesses that fail to establish because of an insurmountable tax bill.
In calling this debate, my aim was not just to highlight these issues, gain consensus across the House on the vital importance of these reliefs, and push for action. I called on the Government to provide clarity on their intentions regarding APR and BPR before the Autumn Budget, to commit to maintaining these reliefs for at least this Parliament, to commission an independent review of their wider economic and social impact, and to engage meaningfully with affected communities before proposing changes.
The response from the Exchequer Secretary to the Treasury, while non-committal, indicated a willingness to keep all taxes under review and leave the door open for further discussions. But at this stage, warm words are not enough. Farms and family businesses have already been making rushed and rash decisions ahead of potential changes to inheritance tax reliefs in the Budget. Our farmers and family entrepreneurs (who, some would strongly argue, are the true definition of working people…) need clarity and commitment against increased inheritance tax liability.
This Government must match their words with action. If they believe in food security; if they want to promote farmers and family businesses across the country; if they want these businesses to invest, innovate and adapt. They must protect APR and BPR in the Budget.
The fight to protect these reliefs is far from over. I will continue to press the Government on this issue.
Lifelines, not loopholes: we must keep APR and BPR
