Ed Davey: Now is not the time to turn our backs on family farms

After bungled Brexit deals and soaring costs, the last thing farmers need is the ‘tractor tax’, writes the Liberal Democrats leader. Yes, the Tories have a lot to answer for – but Labour is falling into the same trap

British farmers are the best in the world because of our tradition of family farming. Family farming has tethered agricultural practices in the UK to the skills which have long guaranteed British quality food, produced to high standards and with care for our natural world.

But now the farmers feeding our country are sometimes barely able to afford to feed their own families. For far too many, the sums simply don’t add up.

In the last year alone, 8,100 UK farms closed their doors – equal to one in 25 of all farms in the country. Without these family farms, the wider rural community cannot prosper; our food security, our countryside, our natural environment and our cultural heritage are all supported by family farming.

Often ignored in Whitehall, where rural communities are misunderstood, family farms are also a massive part of our clean energy future and give us a fighting chance against climate change.

I know how worried farmers are about their incomes and I am desperately worried about the tragic rise in suicides in farming communities. There is a wider issue of mental health crisis in farming, and many farmers rightly feel the latest tax on family farms comes at the worst possible time.

Under the Conservatives, farmers endured significant cuts to their incomes while the cost of energy, fertiliser and feed soared. The Conservative government sold farmers down the river in bungled trade deals with the EU, Australia and New Zealand, which have undercut farmers and worsened labour shortages. All the while, farmers were left to battle with the devastating impacts of storms and flooding – including livestock fatalities and crop and equipment damage – without adequate support.

Family farms are in desperate need of a government that cares. I am unconvinced Labour is up to it.

For a start, the government did not produce a proper impact assessment or consult on their changes to agricultural property relief which will mean that from April 2026, a tax of 20 per cent will apply to agricultural assets over £1m. The Treasury even ignored its own Department for Environment, Food and Rural Affairs (Defra), which has urged to at least water down the change.

To pay this new inheritance tax bill, many family farmers will be forced to sell their farms – likely to private equity firms and large corporations who have no interest in looking after our countryside. That isn’t fair for hardworking farmers and it will reduce food production, undermine food security and harm our environment by taking land away from those who have nurtured it for generations.

Labour must realise that there are thousands of farms whose land may be worth a lot on paper, but who are earning less than the minimum wage. If they were fixed on changing inheritance tax, could they at least have made sure it takes income into account? The government’s own figures show that farm business income last year was lower for almost all types of farms.

The government claims we need this tax to raise money for our public services. I understand the challenge of repairing the terrible damage the Conservatives did to both our public services and our public finances, but this tax on family farms is only expected to raise around £115m a year – less than 0.01 per cent of government spending and less than 0.3 per cent of all the tax rises announced by Rachel Reeves in the Budget.

The government didn’t need to do this. Instead, it could have chosen to raise more revenue much more fairly; it could have reversed the Conservatives’ tax cuts for the big banks. It could have increased remote gaming duty on the growing profits of online gambling firms or raised the digital services tax on social media companies and tech giants. All things the Liberal Democrats have called for, and stand ready to support.

Instead of hurting British farmers, Liberal Democrats would back them. Our manifesto set out plans for an extra £1bn a year to support profitable, sustainable and nature-friendly farming across the UK. We have also set out a detailed plan to rebuild our relationship with Europe, bringing down barriers to trade – including a comprehensive veterinary agreement to help our farmers.

And we must make sure all farms affected by flooding are eligible for support. Even now, as the months turn colder and wetter, farmers face further cuts to their incomes next year and increases in their input costs. The government has decided to accelerate the phase-out of direct payments to farmers under the basic payment scheme – all recipients will see the base amount of their payments cut by 76 per cent next year.

We support the move to public money for public goods under the new environmental land management payment system, but many farmers are seeing their incomes threatened as the old payments are cut and new payments are not yet rolled out or properly funded. Farming subsidies have fallen by 20 per cent in real terms since 2015 – equivalent to the loss of £722m in public funding for farmers. What can justify this accelerated cut to farmers’ incomes?

My Liberal Democrat colleague and friend Tim Farron represents a great many farmers in Cumbria. He talks about the enormous pressure that farmers face, especially at this time of year but generally; when you are the latest of six generations of farmers and you are going to lose the family farm.

I want to work to relieve that pressure and to be a voice for farmers. Family farmers deserve better than what happened under the last government and better than the wilful ignorance of this government. Ministers must change course if we’re to give farmers a fighting chance of sustainably and profitably feeding the nation.

Ed Davey is the leader of the Liberal Democrats and the MP for Kingston and Surbiton. He served as secretary of state for energy and climate change from 2012 to 2015