MPs are critical of government’s behaviour through a series of controversial decisions
The cross-party Environment, Food and Rural Affairs (Efra) committee has called on the government to delay announcing its final agricultural property relief (APR) and business property relief (BPR) reforms until October 2026, to come into effect in April 2027.
In a newly published report, the committee argues that a pause in the implementation of the reforms “would allow for better formulation of tax policy and provide the government with an opportunity to convey a positive long-term vision for farming.” It would also protect vulnerable farmers who would have “more time to seek appropriate professional advice”, it adds.
MPs noted the difficult economic and geopolitical circumstances and praised the government’s commitments to backing British produce and supporting farmers, but expressed concern that “high-profile policies have been announced prior to the completion and publication of the strategies and reviews that Defra says will inform and guide its vision.”
They raised concerns that changes announced in the Autumn Budget 2024 were made without adequate consultation, impact assessment or affordability assessment. This means that the impact of the changes “on family farms, land values, tenant farmers, food security and farmers in the devolved administrations” is “disputed and unclear” with a risk of producing unintended consequences.
MPs said that “reforms threaten to affect the most vulnerable” and want the government to consider alternative reforms before justifying its final approach.
The report refers to a March 2025 survey of UK farmers that found that before the Autumn Budget 70 per cent felt optimistic about the future of their rural businesses, but that number fell to just 12 per cent after the Budget.
The survey also said that 84 per cent of farmers sampled feel that their mental health has been affected by the Autumn Budget, with farmers citing the Sustainable Farming Incentive (SFI) closure and changes to inheritance tax reliefs as the common areas creating concern.
Reforms to APR and BPR
The Efra committee said it supports the government’s aim of reforming APR and BPR to close the loophole which allows wealthy investors to buy agricultural land to avoid inheritance tax, but noted that stakeholders and experts have proposed several alternative ways to reform these taxes so as to achieve this objective without harming small family farms. It has asked the government to consult on these proposals before publishing its Finance Bill in 2026.
The committee also called on the government to publish its evaluation of and rationale for following or not following alternative policy measures presented by stakeholders such as the Institute for Fiscal Studies and the NFU.
Aside from the issue of inheritance tax, the committee warned that the government’s sudden closing of the SFI “affected trust in the government” and “left many farmers without the funding they expected and at risk of becoming unviable in the period before the next scheme is introduced”.
Defra has since announced it will allow SFI applications that were in progress within two months of 11 March to progress with restrictions, but the committee called for an alternative funding mechanism to be put in place no later than September 2025, to fill the gap in funding for those who missed out on the SFI24.
The report is also critical of Defra’s communications and says there is “a pattern within Defra of poor communication and last-minute decision-making following rumours and departmental leaks.”
Committee chair Alistair Carmichael said: “The committee has taken its work extremely seriously in developing this report and in agreeing our findings. There is an opportunity here to rebuild trust and confidence in the farming sector and I hope that the government will take our recommendations seriously.
“The way in which the government has behaved over recent months has clearly negatively affected the confidence and wellbeing of farmers. Changes to APR and BPR in the Autumn Budget, the sudden closure of the Capital Grants scheme in November 2024, and the abrupt ending of SFI applications in March have all led farmers to feel that they cannot rely on the government to live up to its commitments.
“The government, however, seems to be dismissing farmers’ concerns and ignoring the strength of feeling evidenced in the months of protests that saw tractors converge on Westminster and up and down the country.
“We have seen that Defra’s communications with farmers have been poor, with confusing and sometimes contradictory messaging. There has been a lack of adequate consultation. Policies affecting farmers have been announced without due consideration or explanation of their impact or their rationale.
“Farmers ought to be the essential element in the government’s plans both to achieve food security and to restore and protect the environment. When they make decisions for their businesses, farmers have to plan for the long term – but the landscape they are operating in currently is unclear.
“Farmers urgently need clarity, certainty and advance notice of changes – they cannot be expected to rethink their businesses on a whim. It is essential that Defra focuses on rebuilding trust through good-faith communications with the sector.”
