Mr Alistair Carmichael (Orkney and Shetland) (LD) (Urgent
Question):To ask the Secretary of State for Environment, Food and
Rural Affairs if he will make a statement on the implications of
the Budget for farming communities. The Minister for Food Security
and Rural Affairs (Daniel Zeichner) I welcome the right hon.
Gentleman to his place—he will make an excellent Chair of the
Select Committee on Environment, Food and Rural Affairs—and thank
him for the opportunity...Request free
trial
Mr (Orkney and Shetland)
(LD)
(Urgent Question):To ask the Secretary of State for Environment,
Food and Rural Affairs if he will make a statement on the
implications of the Budget for farming communities.
The Minister for Food Security and Rural Affairs ()
I welcome the right hon. Gentleman to his place—he will make an
excellent Chair of the Select Committee on Environment, Food and
Rural Affairs—and thank him for the opportunity to talk about
this important issue.
As the Minister for Food Security, I can assure the House that
food security is national security. The Government's commitment
to supporting farmers and rural communities is unwavering. We
have committed £5 billion in the agricultural budget over the
next two years—the biggest ever budget for sustainable food
production and nature recovery in our country's history. We are
also releasing £60 million to support farmers whose farms have
been devastated by severe flooding, and investing £208 million to
protect the nation from potential disease outbreaks that threaten
our farming industry, food security and human health.
However, as we are all only too aware, the Conservatives left
behind a £22 billion black hole in our nation's
finances—[Interruption.] Yes, you did. And this Government have
had to take tough decisions on tax, welfare and spending to fix
the foundations and deliver change, including a series of
decisions on tax to protect the payslips of working people. That
is possible only by making changes to other taxes, such as
agricultural property relief, which was previously available to
all agricultural property at a rate of 100%. Currently, small
farms can find themselves facing the same levels of tax bills as
much larger farms, despite having a much smaller asset. Twenty
per cent of agricultural property relief is claimed by the top
2%; 40% is claimed by the top 7%. That is not fair, it is not
sustainable, and sadly, it has been used in some cases by wealthy
landowners to avoid inheritance tax. That is why the Government
have announced plans to reform agricultural property relief.
The Secretary of State met National Farmers Union president Tom
Bradshaw this morning. We absolutely
understand—[Interruption.]
Mr Speaker
Order. Dr Mullan, I heard you before, and I am certainly not
putting up with it this time. If you want to leave, do so now,
because I want to be able to hear others. Do we understand each
other?
Dr (Bexhill and Battle)
(Con)
indicated assent.
Mr Speaker
Thank you. Carry on, Minister.
The Secretary of State met Tom Bradshaw this morning. We
completely understand farmers' anxieties about the changes, but
rural communities need a better NHS, affordable housing and
public transport, and we can provide that if we make the system
fairer. The reforms to agricultural property relief mean that
farmers can access 100% relief for the first £1 million and 50%
relief thereafter—an effective 20% tax rate. That means that an
individual can pass up to £2 million, and a couple up to £3
million between them, to a direct descendant, inheritance
tax-free. Currently, 73% of agricultural property relief
claims—
Mr Speaker
Order. I do not know whether you are aware, Minister, but you
only have three minutes. How long will you be now? Are you coming
to the end at this minute?
In 20 seconds.
Mr Speaker
Marvellous. Come on, then!
Seventy-three per cent of agricultural property relief claims are
for less than £1 million. The vast majority of farmers will not
be affected. They will be able to pass the family farm down to
their children just as previous generations have always done. It
is a fair and balanced approach that protects family farms while
also fixing the public services that those same families rely on.
It is part of a Budget that will restore economic stability and
begin a decade of national renewal.
Mr Speaker
I call the Chair of the Environment, Food and Rural Affairs
Committee.
Mr Carmichael
I remind the House of my entry in the Register of Members'
Financial Interests.
Thank you, Mr Speaker, for allowing this urgent question. I also
thank the Minister for his statement, but I fear that it
illustrates rather well some of the lack of understanding that
has brought us to this point. More than any other industry,
farming relies on stability and long-term planning. That is why
many people in the industry relied on undertakings given by the
Secretary of State when in opposition that the Labour party in
government would not change inheritance tax reliefs for
farming.
Every farming business is capital-rich but revenue-poor. Those
businesses also trade in a market that has been more heavily
influenced by government intervention than any other.
Agricultural property relief is not a loophole; it has been a
deliberate policy of successive Governments for the past 40
years, designed to avoid the sale and break-up of family farms.
Is that still a goal to which this Government adhere? As the NFU
put it, the Government have seemingly failed to grasp
“that family farms are not just small farms, and that just
because a farm is a valuable asset it doesn't mean those who work
it are wealthy.”
As the Minister will be aware, some of the figures he has just
given the House have been vigorously challenged over the past few
days, particularly the assertion that only one in four British
farms will be affected. Will the Minister and his Treasury
colleagues publish the data behind those figures? In particular,
does the figure that 73% of farms will not be affected rely on
the inclusion of very small holdings?
These changes will have a ripple effect across the whole rural
community. Will the Government publish their impact assessment
for other rural businesses? Can the Minister also explain why the
Treasury has removed the ringfence around farm support to be
spent in Scotland, Wales and Northern Ireland? That ringfence was
introduced after the Bew review. If it needed a review to
introduce it, how can it just be abolished now out of the
blue?
The Prime Minister has said in the past, and the Minister has
repeated today, that food security is national security. Can the
Minister point to one measure in this Budget that makes achieving
that aim easier, rather than harder?
I thank the right hon. Member for his questions, which are
serious and important, as one would expect. Let me start by
pointing out that until 1992, this relief did not exist. The
system has existed before and people have operated differently,
although I accept it has been different for the past 30
years.
Turning to the figures, I encourage people to reach for the
detail—to look at the actual figures. The only thing we can go on
is the claims, and the figures coming from the Treasury on claims
for the last year available absolutely reflect that 73% figure.
The right hon. Gentleman raises an important point about the
ringfence; that point is under discussion, but I have made
assurances that the devolved Administrations will be closely
informed about, and involved in, what happens. These are
important points, and they should be treated seriously.
(Gower) (Lab)
I do not really care for the high-profile voices that we have got
attacking a Labour Government, but I do care about the family
farms in my constituency. I know that the Minister cares for
those farms as well, as does the Prime Minister. I welcome the
figures we have been given. However, those figures do need to be
translated to our family farmers; they need to see what it is
like on the ground. I would welcome a meeting with NFU Cymru and
the Minister to discuss what things are going to look like for
farmers, especially in Gower and the rest of Wales, where there
is a completely different landscape.
I thank my hon. Friend for her contribution. Can I say how much I
enjoyed visiting Wales, with the Welsh Minister, very early in my
tenure? It was an important sign from this Government that we
take farming seriously across the entire United Kingdom.
I share my hon. Friend's very strong points about the importance
of the family farm. What we are doing here is protecting the
family farm. I have visited right around the country over the
past five years, and on almost every visit, people have told me
that they are concerned about people coming from outside—they
often say “up London” or “down London”—with a lot of money and
buying up local farmland over the heads of local people, not
because they care about farming but to use that farmland for tax
evasion purposes. This policy can be helpful to family farms and
protect them against—[Interruption.] The hon. Gentleman on the
Opposition Front Bench says from a sedentary position that it
will not, but it is people from his area who have been telling me
about these problems. They repeated them constantly when we were
in opposition, and here are a Labour Government doing something
about it.
Mr Speaker
I call the shadow Minister.
(Keighley and Ilkley)
(Con)
Mr Speaker,
“losing a farm is not like losing any other business—it can't
come back.”
Those are not my words, but the words of our Prime Minister at
the National Farmers Union conference just last year. Over the
weekend, we have heard gut-wrenching stories from farmers up and
down the nation who feel completely and utterly betrayed by the
measures in this Budget. I ask the Minister: why does the
Secretary of State continue to say that he is proud of his family
farm tax? Does the Minister realise that the vast majority of
farming families are not multimillionaires? Most are cash poor
and many are struggling to break even. How does the Secretary of
State expect farmers, in his words, to do—[Interruption.]
Mr Speaker
Order. Can I just say to the hon. Member for East Thanet (Ms
Billington) that I do not need any chuntering? Do we
understand?
How does the Secretary of State expect farmers to do more with
less? Why is he happy to hand our next generation of farmers an
impossible tax bill?
Next, the Government claim that small family farmers will be
protected, yet the Country Land and Business Association and the
NFU have today disputed the Government's figures. Will the
Minister commit to releasing a full assessment of his policy,
including an impact on national food security?
While the changes to inheritance tax relief have been gaining the
national headlines, there are many other negative impacts on
farming businesses from the Budget. Increased national insurance
contributions, coupled with a lower national threshold; an
accelerated reduction in de-linked payment rates; higher taxes on
double-cab pick-up vehicles; new taxes on fertilisers—I could go
on, but this all begs the question: does the right hon. Member
for Streatham and Croydon North () actually know anything about
farming at all? More importantly, after the Secretary of State
looked British farmers in the eye and specifically promised them
that there would be no changes to agricultural property relief,
how on earth can farmers believe a single word that his Minister
is about to say?
I am very grateful to the hon. Gentleman for promoting me to
Secretary of State—I hope he has similar success in the coming
hours.
The hon. Gentleman raises a whole series of questions. He asked
again, as others have, about other elements in the Budget. The
figures are absolutely there; they were published by the Treasury
and are there for all to read. They are the facts on the estates
that have made claims on agricultural property relief in the last
year available. [Interruption.] They are there for everyone to
see. It is not difficult, it is not complicated—they are
there.
Something that perhaps has not been said, but which should be, is
that there were many calls to reflect the changing way in which
farming operates by including environmental land management
schemes within the scope of agricultural property relief. I hear
nothing from Opposition Front Benchers about that. Do they not
understand the way in which British farming is changing?
(Hastings and Rye)
(Lab/Co-op)
Many farmers in my constituency of Hastings and Rye are feeling
the impact of 14 years of Conservative failure. In particular,
they have faced many challenges with flooding. Can the Minister
tell me what steps we have taken in the Budget to protect small
family farms and how we will continue to support farmers facing
flooding?
I am grateful to my hon. Friend because she makes some important
points. Ahead of the Budget, there were lots of predictions about
what would happen. Of course, what happened is that this
Government have protected the farming budget—indeed, raised
it—and we are absolutely committed to paying out to farmers the
£60 million that they deserve for flooding. That is £60 million,
of course, that was not really budgeted for by the Conservatives,
as part of their £22 billion black hole. The difference between
us and them is that we are taking a responsible approach, which
means that farmers can look forward to a stable future, as
opposed to the chaos of the last decade.
Mr Speaker
I call the Liberal Democrat spokesperson.
(Westmorland and Lonsdale) (LD)
Farmers across the United Kingdom are coping with the lingering
legacy of betrayal—betrayal from the trade deals that happened
under the last Government, which threw them under a bus; and
betrayal from the transition from the old payment scheme to the
new one, which saw many of them going bust or forced into making
business decisions that they would never, ever have chosen. That
legacy of betrayal is one that hangs heavy, and it is why farmers
in my constituency and elsewhere feel so utterly disappointed by
this Government's Budget last week.
Let us look first at the agricultural property relief changes.
There are 1,500 farms in Cumbria and 440 in my constituency
affected by this. Has the Minister done an investigation into the
number of farmers who are living on less than the minimum wage
each year in terms of income, but who have a property that will
be affected by these changes, particularly given the 41% decrease
in farm incomes under the Conservative Government over the last
five years? Will he also assess the impact on tenant farmers?
Some 50% of my farmers are tenants and will be affected by the
disruption that this change will create. Would it not be wise for
him to implement the Rock review of tenant protections before
introducing something like this? Will he also look again at the
£2.4 billion budget and increase it by £1 billion, just as the
Liberal Democrats suggest? If we do not feed ourselves, we are a
failing country.
The hon. Gentleman is a well-informed, thoughtful person, and I
listen closely to what he has to say on these issues, but I do
wonder sometimes about the Liberal Democrats' approach to
economics, because that £1 billion would have to come from
somewhere. I am afraid that the difference between Labour and the
Opposition side of the House is that we are determined to get the
public finances in order, because it is upon that basis that
future prosperity in the farming sector will come.
In terms of farm incomes, the hon. Gentleman is absolutely right
that many farms are very marginal. We know that, and it is
complicated, but I would say to everyone in this House that the
entire inheritance tax system is complicated; I must say I have
read a lot over the weekend that was perhaps a little short on
accuracy. He is also right about tenant farmers, and we are in
close conversation with the Tenant Farmers Association about how
the changes can perhaps be used to good effect, because another
element which has not been raised so far, interestingly, by the
Conservative party is the generational challenge we face in
farming. I will not be telling farmers how to run their lives,
but it is worth reflecting on the fact that sometimes it is
difficult to make that transition and we need to get more younger
people into farming.
(Peterborough) (Lab)
I put on record that I am an officer of the all-party
parliamentary group on farming. I also put on record my thanks to
farmers who, through a torrid decade, have produced food and
sustenance for us in this country. We should all recognise that.
Farmers will rightly be anxious after the experiences they have
had in the past few years. Does my hon. Friend the Minister agree
that that anxiety will only be heightened by the scaremongering
from some Members of this House, and will he commit to working
with hon. Members, the National Farmers Union and farmers to
ensure that the positive elements around food security in this
Budget are delivered in the years to come?
My hon. Friend and near neighbour is right to pay tribute to our
food producers. One thing we know for sure is that we are going
to need food into the future, and farmers are essential to the
future of this nation and our economy. That is why we will treat
them with the utmost respect and seriousness and have a serious
debate about how we transform farming. Again, while this has not
been picked up much in the debate so far, the effect of this
Budget is to speed up still further that transition to an
environmentally friendly, nature-friendly way of farming,
alongside producing the food that our country needs. That is a
really important transition—I pay tribute to the current
Opposition, who started that process in government, but I have
been unwavering in my support for it for a number of years and I
am determined to see it through to a proper conclusion. My hon.
Friend is also right that we will work with everyone involved to
get good, sensible outcomes, because that is what this Government
are about.
Dr (Hinckley and Bosworth)
(Con)
The National Farmers Union tweeted:
“In 2023 Prime Minister looked farmers in the eye and
said he knew what losing a farm meant. Farmers believed him.
After today's budget they don't believe him any more.”
What is the Prime Minister going to do practically to resolve
that?
When we came to power a few months ago, the thing I was asked
most strongly to do was to provide stability for the future.
Through a series of interventions over the past few months, I
have tried to indicate that that is exactly what we will do,
whether through the environmental land management schemes or any
other issues. The Government faced a huge challenge at this
Budget—we all know that. Decisions had to be made. However, I am
absolutely convinced that farmers and all those other people who
live in rural areas want and need exactly the same decent health
services, housing and transport as others do. They will be able
to carry on farming, as they have done, but the difference is
that that will be in a stable economic system, which means they
will not suffer in the way they have over the last decade.
(Bassetlaw) (Lab)
Many farms in my constituency were under water for months after
the floods last year. What is the Minister doing to support those
farms as they recover from last year's horrific storms?
Extreme weather events have clearly become a growing challenge
for us all, which is part of the reason that we are so determined
to make the transition to a more environmentally friendly form of
farming. Last year, a scheme was in place to help farmers. The
then Government increased it; as I say, I am not sure that they
exactly identified where the money was coming from, but we have
identified the money. We have honoured it and will be paying the
£60 million out to farmers in the next couple of weeks.
(Bridlington and The
Wolds) (Con)
The Minister implied earlier that farmers in my constituency of
Bridlington and The Wolds support this measure. I can
categorically tell him that they do not; they are shattered by
this announcement. The impact on my community will be
devastating. I ask the Minister today to do the right thing and
withdraw these plans.
I look forward to many more such exchanges over the Dispatch Box
with the hon. Gentleman. What I said earlier was that on my many
visits around the country, people consistently told me that they
were concerned about how the system was being abused and how
people were coming in and buying up land over their head. That is
what I said, and that is what I stand by. As for these measures,
I am afraid that this is a Budget that stands in its entirety—and
the whole country needs stability, so it will stand.
Ms (Carlisle) (Lab)
A few months ago, I visited my constituents Andrew and Ada, who
farm in a remote north-east corner of Cumbria. Sadly, after 14
years under Conservative Governments, they are largely getting by
on Ada's pension. Will the Minister set out what support will be
available to farmers such as my constituents, following last
week's Budget?
My hon. Friend is absolutely right; many people in this country,
and many farmers in particular, are struggling to get by. That is
why it is very important that in this Budget we maintained the
budget for the support schemes that people are getting used to;
it is interesting to note that they are now being subscribed to
in much higher numbers. That support will be available to help
people to make the transition and to go on supplying food for
this country, which is so important.
(Glastonbury and Somerton)
(LD)
It has now been more than 10 years since devastating floods
wrecked the Somerset levels and moors, causing untold damage. At
the time, affected communities were told that money was no object
when it came to protecting the area, but now, deep in the Budget
document, there is a hint that the farming and flood defences
budget might be cut. Can the Minister explain to my farmers in
Glastonbury and Somerton, who are terrified of more flooding
devastation this winter, how the Government aim to protect
them?
I remember those awful times very well. “Money is no object” is
not something that was said by my party, I can tell her; it was
said by the now Opposition, and perhaps it was not exactly the
right way to put it. Extreme weather events are a challenge for
all of us across the country. My colleagues and I will work with
everyone to find the best ways to resolve them, but let us not
for one moment imagine that this is a simple issue to solve. The
flooding challenges are very real and we are working on them. I
look forward to further discussions with the hon. Lady.
(North West Cambridgeshire)
(Lab)
The Minister knows lots of farmers in my constituency—he is a
near neighbour of mine—and farmers are grateful for his
engagement with them. He knows that farmers' incomes fell year on
year under the Conservative Government. Will he outline what
measures there are in this Budget to support farmers in North
West Cambridgeshire and help the industry to get back on
track?
I thank my hon. Friend, who is another of my near neighbours. I
did not use to have many near neighbours who were anywhere near
as friendly as my new near neighbours, but Cambridgeshire has
changed. Cambridgeshire has changed for a very clear reason:
Cambridgeshire lost trust in the Conservative party. I am
determined to build trust across the entire country by
maintaining, over a prolonged period, the levels of support
necessary to allow people to farm successfully. My answer to my
hon. Friend is to look at the Budget, where we saw an increase in
the farming budget. We will look to maintain proper support into
the future because, exactly as has been said, these are long-term
businesses and long-term interests. The reason that they are
long-term is that we are all going to need to eat.
(Thirsk and Malton)
(Con)
The Minister talks about the transition. I talked to my farmers
in Bedale on Friday, and the only transition they can see is the
transition from family farms to the state. Does he realise that
the farming industry is one of the least profitable sectors in
the country? The return on capital employed is 0.5%—that is the
Government's own figure—and that is around a 20th of the typical
profit margin in the UK. Other than by some warped socialist
ideology, how can he justify taking away 40 years of profits for
the typical farmer?
The hon. Gentleman may wish to remember that the agricultural
transition was embarked upon by the previous Government. It is a
seven-year transition process, and we are just over halfway
through. It is important that it is maintained in a stable and
sensible way, and that is exactly what we are doing. My answer to
his question is that the challenge put to me was to maintain
stability and not to tear up those schemes—to maintain them and
make them work—and that is exactly what we are doing.
(Bishop Auckland) (Lab)
I met farmers in my constituency in the days just ahead of the
Budget. The biggest concern that they raised with me was not
inheritance tax, but the transition from basic payments to ELM
schemes. I welcome the fact that the Budget not only maintained
the agriculture budget, but grew it, which the Conservatives said
they would not do. There is a concern that under the previous
Government, despite having the budget, the system was written in
such a way that the smallest farms could not easily access that
funding. That is the single biggest threat to agricultural
businesses in my area. I rather think the Conservatives are
raising a smokescreen. Will the Minister comment on what this
Government will do to ensure that we can draw down that budget
and ensure that local farms can take advantage?
It was striking that under the previous Government the
agriculture budget was so substantially underspent. We are fixing
that and making it possible for people to access those schemes in
the way that my hon. Friend describes. It is interesting that the
issue that came up most for him was basic payments. The issue
that came up time after time on my visits was rural crime. That
is the thing that has troubled so many people on farms and in the
countryside. That is why it is so important that this Government
are setting up a proper integrated rural crime strategy.
(North Dorset) (Con)
The Minister is seeing silver linings in the clouds hanging over
family farms and tenanted farms in North Dorset, but I must
confess that I fail to see them. I will give ask the Minister a
simple yes or no question: yes or no, will he come to North
Dorset to meet farmers in my constituency and explain these
wonderful silver linings that he can see in the clouds but none
of us on the Opposition Benches can see?
I love visiting farms all over the country, and I am sure North
Dorset will feature on my list at some point in the future.
On this whole question of optimism, pessimism and the stress and
strain in the countryside, my hon. Friend the Member for
Peterborough () earlier warned about some of
the things that are being said. I urge people to be temperate in
their language on these issues, because people are stressed,
anxious and worried. My task is to be calm, sensible and
reassuring to them, and to remind them that the vast majority
will be able to pass on their farms just as they have before.
Just as pressing is to tackle those other real issues that they
face. I do not underestimate the challenges that people face—of
course it is difficult, and we know it is hard, but this
Government will do everything we can to support people and to
maintain their prosperity into the future.
(North East Derbyshire)
(Lab)
Many of the farmers in my constituency have regularly raised
concerns with me over protecting farms and our food system from
animal diseases. Will the Minister please outline what steps he
is taking to protect our food and farming systems?
I thank my hon. Friend for raising that important point, because
among the many, many stressful things for farmers is not just the
weather of the past few years, but the disease threats. Whether
that threat is avian flu or bluetongue, we are committed to
helping. As part of that, in the Budget we committed more than
£200 million to start the process of upgrading the facilities at
Weybridge, which is so very important for our future biosecurity.
Biosecurity is so important. I was staggered that the previous
Government did not take swifter action to protect our borders
from African swine fever. We have toughened the rules on
that.
(Bridlington and The
Wolds) (Con)
indicated assent.
I see the hon. Gentleman nodding. He is well versed in that; he
knows.
Mr Speaker
Order. Can I just say that brevity will be helpful? I believe
that everybody has a constituency interest, so I really want to
get everyone in. If we can have shorter answers, that would be
better. Also, if the Minister looked at me now and again, that
would help me hear what is being said.
Sir (North Cotswolds)
(Con)
I declare my interests as a farmer.
A 75-year-old farmer emailed me last week and said
“we work long hours, usually alone.”
He said that agriculture
“has one of the highest suicide rates of any industry. There is a
great deal of talk these days about mental health and the need to
alleviate stress in the workplace, yet”
last week the Chancellor and the Secretary of State for
agriculture
“destroyed everything I have ever worked for.”
How would the Minister answer that?
I would reassure that farmer. I am afraid that I do not think he
is correct on that, and we are absolutely determined to ensure
that he can hand on his farm, as others have done before, but let
us ensure that he gets the proper advice.
(West Lancashire) (Lab)
I spent about 14 months in this place asking the former
Government about water management, but I was always on a hiding
to nothing. Does my hon. Friend recognise that the farmers in my
constituency have a lot of expertise in water management and land
management? Will he tell us how the Budget supports farmers to
bring that expertise to the fore and work in partnership with us
to manage that land and water?
Mr Speaker
The best potatoes.
I am grateful to my hon. Friend. The schemes we have in place
will help us to work with farmers on those issues—alongside, of
course, the payment of the £60 million that the previous
Government promised.
(Aberdeenshire North and
Moray East) (SNP)
The Minister has asked Members to be temperate in their language,
but there is deep anger in Scotland and in my constituency about
these announcements, which the policy director for the NFU in
Scotland has stated will be devastating for farmers and crofters.
Will the Minister tell us how these announcements will increase
food security and national security?
Once again, I would say that it is by having a stable, sensible
approach to farming support in the coming years. Clearly in
Scotland this area is devolved, and it is for the Scottish
Government to determine how they operate, but we are setting the
overall context, and in a stable economy in the future farmers
will thrive.
(Middlesbrough South and East
Cleveland) (Lab)
I am proud to represent proud North Yorkshire farmers in my
constituency. Will the Minister set out the steps he will be
taking to ensure that small family farms will be protected by the
Government? Additionally, will he endorse polyhalite, a fantastic
crop nutrient fertiliser that is produced in only one place in
the world: North Yorkshire?
I am grateful to my hon. Friend. I will always look with keen
interest at anything that can help us to make progress. In terms
of how we provide support and reassurance to those small farmers,
that again is by making sure that we have a strong, stable
economy.
(Broadland and Fakenham)
(Con)
I refer to my entry in the Register of Members' Financial
Interests. Is the Minister surprised by the reaction of the
farming community?
I thank my fellow East Anglian MP for his contribution. Am I
surprised? No, I am not entirely surprised, because people are
very fed up and depressed, and they have been depressed for a
long time. I understand why it is difficult, but my job is to
reassure and talk calmly to people, and that is what I shall
continue to do.
Mr (York Outer) (Lab)
I am proud to represent many wonderful farming communities. The
young farmers I meet tell me that one of their biggest challenges
is accessing rural mental health services. Does my hon. Friend
welcome the record £22 billion extra going into the NHS, which
will support access to rural mental health services?
My hon. Friend is absolutely right. The core message of the
Budget is to get our finances stable and on track, which will
allow us to invest in the public services that everyone needs,
and particularly those in rural areas who are struggling with
those issues.
(North Shropshire) (LD)
One of many emails I have received in the past week is from a
farmer who has an archetypal family farm of 330 acres of mixed
dairy and arable that they are planning on passing on to their
son, even though they are struggling to make ends meet. He is
typical of farmers in my constituency, and he is very concerned.
We have not seen any investment in public transport or any of the
other sweeteners that the Minister mentioned earlier. Can he
explain what investment will go into rural transport, and why he
has set the threshold for APR so low?
I think the hon. Lady should wait a bit longer to see transport
improvements—it has only been a week. The level has been set by
the Treasury based on the figures that we have, to try to make
sure it is fair. As I said, the vast majority will not pay
anything. I hope she will find that reassuring.
(Hexham) (Lab)
For 14 years, farmers in my constituency were let down and
betrayed by the Conservative Government on things like the
Australia and New Zealand trade deal, and repeated broken
promises that saw thousands of farm businesses across the country
close. Does the Minister share my assessment that they were
betrayed for those 14 years?
I do not think it is my assessment, but that of the voters, who
made it very clear.
(Ashfield) (Reform)
Sam Wilson is a farmer in Ashfield. He is not a rich man; in
fact, he has not drawn a wage in the past four years. Will the
Minister look me in the eyes and tell me how many farmers he has
spoken to in the past few months who agree with this hare-brained
scheme?
The last farmer I spoke to over the weekend congratulated me on
what we were doing.
(Lichfield) (Lab)
There appears to be a lot of discussion about agricultural
property relief on inheritance tax today. Could the Minister
confirm what percentage of the farms that claimed more than £1
million of agricultural property relief in the past two years
actually received any agricultural income in the past five
years?
I will have to go away and get the answer to that, and I will
write to him.
(South Shropshire)
(Con)
South Shropshire farmers were in touch with me over the weekend.
They are up in arms about changes to APR that the Labour party
told them would not happen. Will the Minister reverse this rural
vandalism and back British farmers?
We will back British farmers, by making sure that they have a
stable system in which they can flourish.
(Sefton Central) (Lab)
It is extraordinary that a small number of wealthy landowners
have been using agricultural property relief to avoid inheritance
tax. What is more extraordinary is how the Conservatives have
defended tax avoidance in the way that they have. Will my hon.
Friend confirm to the farmers in my constituency and across the
country that the Budget will benefit family farmers through
investment in public services as well as through the agriculture
proposals?
My hon. Friend makes a powerful point. Not only do those people
seem to relish finding ways of creatively running their accounts,
but some of them even take money to write columns about it.
Dr (Sleaford and North
Hykeham) (Con)
I declare that my husband is in agriculture and farming, and
therefore I have an indirect financial interest in the topic.
This Government promised that they would not raise national
insurance contributions, but they have. They promised that they
would not reduce agricultural property relief, but they have.
They have also added a fertiliser tax and a tax on pick-up trucks
as a way of compounding the misery. Has the Minister done an
impact assessment on food security and food prices following the
Budget, and will he publish it?
The hon. Lady will know that many things impact food prices. I
gently suggest to the Conservatives that they might want to look
more closely at food price rises over the past few years before
giving us any lectures on how to manage things. I am confident
about this, because I have looked at the figures issued by the
Treasury on the number of claims made in the past few years, and
our figures stack up.
(Thornbury and Yate) (LD)
I have previously raised in departmental questions that the
farmers I speak to are reluctant to sign up for ELMS due to the
complexity, and because they do not want to get locked into a
deal when a better one might be around the corner. That may
account for the £200 million underspend last year. In the Budget,
the Government committed to maintaining the funding at the
current level, including the underspend, but said that it would
be reviewed in 2025-26 to ensure it is “affordable”. Does the
Minister agree that that leaves farmers even more in the dark
about their future, at a time when they are struggling to get
by?
The hon. Lady raises an important point. I suspect that in the
months ahead it will come out that, actually, over the last few
months there has been a big uptick in the number of people making
sustainable farming incentive claims. That says to me that we are
now on track to make these systems work for people. I do not
disagree with her that under the previous Government it was a
very long painful process, but we are now making progress and we
need to make it work.
(Witham) (Con)
Does the Minister recognise that the changes not only break the
Government's previous promises on APR to farmers, but that they
will add significant burdens and costs to family farms and
disincentivise food production?
I also wish my fellow East Anglian MP, the right hon. Lady, good
luck in the coming hours. The reason we can look forward to a
successful and stable future for farmers across the east of
England and the rest of the country is that we have absolutely
committed to stability. The reason things have had to be
different is that we found—I found this in my Department, just as
fellow Ministers found it in their Departments—that the situation
was far worse than we had been led to believe. We had to tackle
that problem.
(Caerfyrddin) (PC)
Diolch, Mr Llefarydd. As a tenant dairy farmer myself and chair
of the Farmers' Union of Wales Carmarthenshire, I perhaps
understand this issue more than anybody else in the Chamber. The
Government are trying to portray farming as an industry of
super-wealthy landowners and that is simply not the case in
Wales, let me tell them. Welsh upland farmers in mountainous and
hilly areas have an average annual income of £18,600—yes, you
heard correctly: £18,600. That is far below the national living
wage for hours that are way beyond the average 40-hour week. What
assessment has the Minister made of the impact of the changes to
APR in Wales, where wages for farmers are so low?
The hon. Lady is absolutely right that farming is very tough
right across the country and very difficult in Wales. It is a
devolved issue, so I will not comment on specific schemes in
Wales, but I point her back to the Treasury figures that show the
number of people who made claims for APR. It is relatively few,
and I would say it is probably relatively few in Wales.
(Salisbury) (Con)
I spent most of the past six years looking at Treasury figures
and I have a great deal of sympathy for the hon. Gentleman. I
fear he is a victim of a hit-and-run exercise by the Treasury on
the Department for Environment, Food and Rural Affairs budget. He
would do well to think about the lessons learned from the pasty
tax, because if he is not careful this measure will be of a
similar dimension for this Government.
I am very grateful for the right hon. Gentleman's concern, but I
have to say I do not agree with him.
(Brecon, Radnor and Cwm
Tawe) (LD)
Can the Minister confirm how many farms in Wales will be impacted
by the changes to APR in the Budget?
I am grateful to the hon. Gentleman for his question. I do not
think it is broken down by national area at the moment, but it is
something we can go away and look at.
(North West Hampshire) (Con)
I draw the attention of the House to my entry in the Register of
Members' Financial Interests. Farmers and family businesses are
deeply alarmed, because an important principle on which they have
relied for decades has been breached. It is obvious from the Red
Book that the Chancellor will have to raise tax again in the
future. Is this the end, or can farmers and small businesses
expect yet more demands on death?
The right hon. Gentleman says decades. I think it was in 1991 or
1992 when the current rules were introduced. I can absolutely
assure him that we are now on track for a stable future. That
will allow farmers in his constituency and across England to
flourish.
(Honiton and Sidmouth)
(LD)
Family farms are very often cash poor. Each time the average farm
is passed from a parent to a child, the family may have to
generate an extra half a million pounds. They may deal with that
by trying to make each acre produce an additional £40 of profit.
That could send into reverse the agricultural transition to a
more nature-friendly farming approach, if they revert to more
agrichemicals and intensive methods. As I asked the Minister in
an Adjournment debate last week, what did he do ahead of the
Budget to combat this appalling measure?
The hon. Member asks what we did. What we did was look at the
farming budget and ensure that we protected it, to allow his
constituents and constituents across the country to take part in
the schemes that will support them in that important
transition.
Sir (New Forest East) (Con)
How does the Minister reconcile his sensible acceptance of the
fact that food security is vital to national security with
farmland being split up and sold off, probably for development,
as a result of the Budget changes?
The right hon. Gentleman has raised an important point. We will
be addressing it through the land use framework, which will be
delivered in the next couple of months. Of course there are
trade-offs. There are a range of pressures on our land, in
respect of housing, food, energy and so many other things. We
need to have a rational way of making those decisions, and that
is exactly what we will introduce.
(Boston and Skegness)
(Reform)
Are the Minister, the Secretary of State and the Chancellor aware
that so serious are the consequences of this policy that the
heads of farming families in their 80s and 90s are seriously
considering committing suicide before it comes into place? [Hon.
Members: “Shame!”] Shame on you! [Interruption.]
Mr Speaker
Order. I do not need any after-comments.
I find it hard to respond to a question like that. I spoke
earlier about using language carefully, and I would just
reiterate that point.
Sir (Herne Bay and Sandwich)
(Con)
In the rural England that I am privileged to represent part of,
they say that you should live as if you are going to die tomorrow
and farm as if you are going to live forever. Do the Government
not understand that if we inheritance-tax our farms out of
existence, there will be no forever, and there will be no food
from what was once the garden of England?
The right hon. Gentleman is very knowledgeable about these
issues. I just gently ask him to look closely at the detail and
the figures, which show that the numbers are low. I do not
recognise his characterisation of the future.
(Kingswinford and South
Staffordshire) (Con)
According to statistics published by DEFRA last Thursday, an
average farm in England measures 88 hectares, which is roughly
one hectare for every word that Labour had to say about farming
in its last manifesto. What assessment has the Minister made of
the typical value of a farm of that size—about 88 hectares?
I think the hon. Gentleman will know that the definition of a
farm is actually rather complicated. That is what makes this
quite a difficult debate, and I am not going to comment on
individual farms, but the overall assessment—[Interruption.] Let
me return to the point about the Treasury figures, which show
that the number of claims likely to be affected by this change is
relatively low.
(Truro and Falmouth)
(Lab/Co-op)
Before the election, farmers in my constituency were very
concerned about the environmental land management system, which
had not worked for a long time but which they felt was just
beginning to work. Will the Minister please reassure them that
the Government will be proceeding with it?
I can absolutely give my hon. Friend that assurance. As I said
earlier, throughout the last five years in opposition, I was a
consistent supporter of the agricultural transition, and I am
determined to ensure that it is successful.
(North East Fife)
(LD)
I am conscious of the need to use temperate words, but one of my
constituents said to me that the Government had left farmers the
choice between selling now in a managed way and leaving their
farms to their heirs, who would be at the mercy of HMRC and the
banks. Either way, family farms would fall.
The Minister has talked extensively today about the challenges of
wealthy individuals coming in to buy up farmland. Do the
Government accept that this measure will potentially increase
that problem, and, if it is a problem, what additional
legislative steps will they take?
No, I do not. For the reasons that I outlined earlier, I think
that it will act as a disincentive for people to do that.
(Shipley) (Lab)
Farmers in my constituency have told me that they are struggling,
owing to the abysmal implementation of a transition payment
scheme by the last Government. There have been huge delays in
receiving payments and they have been caught up in bureaucracy.
Will the Minister reassure me, and those farmers in my
constituency, that this Government are fixing those problems and
speeding up payments to our farmers?
I can give my hon. Friend that assurance.
(East Hampshire) (Con)
Ministers keep saying that we should not worry about APR because
far more people think they will pay it than will actually be
caught. Does he not recognise that that is part of the problem?
People have to make business decisions now for an uncertain
future, and this policy will have a depressive effect on the
investment that we need in agriculture.
I do not agree. If the right hon. Member looks at a number of the
more thoughtful commentators in the debate over the last few
days, he will see that there are some very different views out
there on the impact this policy will have.
(Burton and Uttoxeter)
(Lab)
I thank the Minister for his comments about rural crime, which is
a real issue in my constituency of Burton and Uttoxeter. We have
heard no apology from the Conservative party for cutting policing
across our constituencies. Will the Minister say more about the
steps that this Government will take to protect farmers from
theft, antisocial behaviour and fly-tipping?
My hon. Friend is absolutely right. It seems that the
Conservative party does not understand that if we raise taxes and
invest in the future, we can do more to protect people who cannot
protect themselves. It is vital that we tackle rural crime, which
is a top issue that is raised with me consistently.
(Rutland and Stamford)
(Con)
At the Rutland ploughing contest this weekend, it was clear that
farmers feel devastated. They feel that the Government do not
understand them, because farmers do not have liquid wealth; they
rely on land as their asset to produce food. They turn a small
profit but have a very constrained cash flow. Indeed, they have
the lowest return on assets of any business sector—an average
return of less than 1%.
“Losing a farm is not like losing any other business. It can't
come back.”
Those are the Prime Minister's words. As the Minister's
constituency is a near neighbour of mine, will he come and repeat
them to my farmers in Rutland and Stamford, and have that
discussion with them?
I have been on an extended farm tour for the last five years, and
I am sure it will continue.
(Monmouthshire) (Lab)
In my constituency of Monmouthshire, farmers are anxious and
worried. Will my hon. Friend seek to reassure small family
farmers by spelling out the figures? Last week, the Exchequer
Secretary to the Treasury said:
“these exemptions mean that if someone has no other assets and is
passing it on to a direct descendant, a farm or farming business
worth up to £2 million can be passed on without paying any
inheritance tax at all.”[—[Official Report, 31 October 2024; Vol.
755, c.
1036.]](/search/column?VolumeNumber=755&ColumnNumber=1036&House=1&ExternalId=C660203C-5B32-4D71-B3CA-2FDC8D5778F6)
I am grateful to my hon. Friend. I am very reluctant to offer tax
advice to anybody, but the advice I have been given is that the
figure may even be more than that. I urge people to look closely
at the detail, rather than jumping to the worst conclusion.
(Brigg and Immingham)
(Con)
Reference has been made to rural crime. May I suggest that a
whole new definition of “rural crime” is the proposals contained
in the Budget? The Labour party has yet again shown that it does
not understand the rural community. If family farms close, there
will be a knock-on effect for grain merchants, farm machinery
dealers and so on. Can the Minister explain what assessment has
been made of the impact on the total rural economy?
I agree with the hon. Gentleman that the rural economy is closely
integrated and that one thing has an effect on another, but the
thing that will be most beneficial for the rural economy is a
strong economy, which we are building. We are putting the
foundations in place.
(Tiverton and Minehead)
(LD)
I have 1,600 farmers in my constituency. Some 432 farms will be
affected by this silly idea, not to mention the families, their
employees and the shopkeepers who rely on our rural economy. This
policy is insensible, irrational and plain wrong in its
interpretation of real life in our rural communities. It will be
like the highland clearances. Hundreds of years of tradition will
be lost to the taxman. Before I ask the Minister to think again,
I can say with absolute certainty that the policies of the
Conservative and Labour parties have reaffirmed the fact that the
Liberal Democrats are the only true champions of farmers and the
countryside—
Mr Speaker
Order.
Sorry. Will the Minister—
Mr Speaker
Order. Sit down, please. The question was long enough. We do not
need to start playing politics around the Chamber.
I do not recognise those figures. When I look at the figures that
the Treasury gave for the number of claims in the last year
available, that is very close to the number in the hon. Lady's
own constituency, which seems unlikely to me.
(Great Yarmouth) (Reform)
First, I should declare an interest as an active farmer of 865
acres. Secondly, I represent a constituency with some of the most
fertile farmland in the country, and since the Budget I have yet
to come across anyone who thinks that this is anything other than
a terrible decision. Speaking at the Country Land and Business
Association conference before the election, the then shadow
Secretary of State—now the Secretary of State—was asked whether
Labour intended to change inheritance tax relief for farmland.
The response was:
“We have no intention of changing APR”.
While I feel for the Minister in trying to defend the
indefensible, would he like to take the opportunity today to
apologise to the British farming community and, most importantly,
commit to the reversal of this cruel assault on British family
farms?
The hon. Gentleman well knows the financial state of the country
that we inherited. Difficult decisions had to be made.
(Gordon and Buchan)
(Con)
The average farm in Aberdeenshire is 490 acres, and average
values are about £5,000 an acre for bare land. Once the
farmhouse, building machinery and livestock are added, that is
suddenly well over the inheritance tax threshold and have a huge
IHT bill of hundreds of thousands of pounds coming your way.
DEFRA figures show that 19% of farms do not make a profit and 24%
make less than £25,000, so does the Minister suggest that farmers
sell the land they use to grow the food, sell the machinery they
use to harvest the food or sell the buildings they use to store
the food, in order to pay this bill?
The hon. Lady will know that farming policy is different in
Scotland, but on the tax issues, which are UK-wide, that is
absolutely right, but I would suggest that she gets her farmers
to look in detail at these proposals, and what they will find is
the vast majority—[Interruption.] When they look at them in
detail, they will find that the vast majority will be absolutely
fine.
(Huntingdon) (Con)
As a fellow Cambridgeshire MP, and having already announced a
forthcoming ban on neonicotinoids for our sugar beet farmers,
what message will the Minister give to the Cambridgeshire farmers
so gravely impacted by the Government's family farms tax that
will lead to farmland being sold, and potentially see more of our
best and most versatile land being used for vast solar farms? How
does the slashing of agricultural property relief help farmers in
Cambridgeshire?
It is very good to see my near neighbour. What I will say to
Cambridgeshire farmers is that the thing they need most of all is
a stable economy, and they also need a sound environment in which
they can farm. The measures that we are putting in place will
ensure their prosperity for the future.
(Dewsbury and Batley)
(Ind)
Can the Minister reassure the House and the people of my
constituency and our country, that the Budget will not add to the
cost of producing food and will not result in consumers having to
bear the brunt of rising prices, higher inflation and higher
interest rates?
The hon. Gentleman makes an important point. The people of this
country suffered gravely under the last Government, and we will
do nothing to make their situation more difficult. In fact, this
Budget protects the pay packets of the vast majority of the
British people.
Greg (Mid Buckinghamshire) (Con)
There are already very low margins on every farm, including those
in Mid Buckinghamshire. Will the addition of between £50 and £75
a tonne on the price of fertiliser, through the Government's
proposed carbon tax, increase food prices? Who will shoulder that
burden? Will it be the farmer, or will it be the consumer?
As the hon. Gentleman knows, a whole range of factors go into
food prices. What is very good news is the establishment of GB
Energy and a move to a much more affordable and reliable form of
power for farmers as well as our consumers. We will all be better
off.
Mr (Maidenhead) (LD)
On Friday, I visited an agricultural college in my constituency,
where I heard concerns about how the changes in this Budget will
potentially strip an industry of young farmers. What discussions
did the Minister have with farming stakeholders on changes to the
agricultural property relief prior to the Budget?
The hon. Gentleman will know that tax discussions during the
run-up to a Budget are a delicate issue. However, there was no
shortage of discussion in newspaper columns across the country,
so there has clearly been discussion. Younger people who want to
go into farming face real obstacles, and this change could
help.
Mr
indicated dissent.
The hon. Gentleman shakes his head but, if he talks to people who
know about these issues, they agree with me.
(North West Norfolk) (Con)
Does the Minister accept that agricultural relief was introduced
to protect family farms from being broken up, precisely to
reflect their role as food producers and custodians of our
countryside? Will he rethink this, do what Labour originally
promised, and withdraw this proposal?
As a fellow East Anglian MP, the hon. Gentleman will know just
how complicated farming is, how much it has changed over the last
30 years, and how much it is likely to change in the future. We
have to ensure that farming is in the right place to benefit from
the changes that we are seeing globally and nationally and, most
importantly, that farming can operate in an environmentally and
nature-sensitive way. Without that, we will all be in deep
trouble.
(Daventry) (Con)
In the Minister's opening answer, we sadly heard more Government
slogans and soundbites than real understanding of the fear that
Daventry farmers have been telling me about. I can assure him
that they have been looking at the detail in great detail. One of
them, whose father is sadly coming to the end of his life, is now
actively looking to sell off land because they simply cannot make
the farm work. That is the next generation gone. That is food
that feeds NHS patients gone. Does the Minister not think it is
time to reverse this policy?
I think it is time for people to take up the opportunities of the
schemes that the previous Government introduced and that we are
continuing, which allow them to farm in an environmentally and
nature-friendly way. It will be good for the future and will
produce food for this country. There is a very bright future for
British farming.
(Mid Sussex) (LD)
Given the varied estimates of how many farms will be impacted by
these changes to agricultural property relief, will the Minister
confirm how many farms he thinks will be impacted?
I refer the hon. Lady to my earlier answer. The figures are in
the Treasury papers for all to see.
(Stockton West) (Con)
Since Wednesday, I have been contacted by devastated farmers from
across Stockton West. Their families have farmed for generations,
and they know that, as a result of this Budget, they will be the
last generation to do so. Has the Minister made any assessment of
the impact this APR change—this family farm tax—will have on the
viability of tenant farming?
Yes, we have, because we have looked at the figures. Again, I do
not recognise the hon. Gentleman's characterisation although,
given some of the things that have been said over the last few
days, I understand why people are alarmed.
(South Devon) (LD)
South Devon has some of the most expensive land in the country,
which makes every farm, regardless of its size, worth a lot of
money on paper. One farmer in my constituency said over the
weekend:
“We may be land rich but we are cash poor and our children will
more than likely have to sell the land and maybe buildings to
cover the tax. Without the land, the farm is simply no longer a
farm, taking valuable land out of food production.”
The Minister says he values food security, and agricultural
property relief gave us that food security. He says—
Mr Speaker
Order. I think the Minister has got the point.
I understand the point but, first, much of this can be avoided
through proper planning. Secondly, Devon is one of the counties
where we most often hear it said that people are coming in and
buying up land for the wrong reasons.
(Dumfries and Galloway)
(Con)
Farmers in Dumfries and Galloway, who have been contacting me
over the weekend, are not shroud-waving—let us be clear about
that. Less clear are the figures. The NFU says that as many as
50% of farms that are producing food, meeting environmental
targets and providing jobs in remote and rural areas could be at
risk. Napoleon knew that an army marches on its stomach, and he
also said that a good retreat is better than a bad stand. This
Government are making a bad stand, and they have a chance to
reverse this decision. Will they not do that?
“Could be at risk” has a very broad definition. The figures are
absolutely clear, and I suggest that the hon. Gentleman looks at
them.
(Stratford-on-Avon)
(LD)
Unlike in many countries that are dominated by vast corporate
agribusinesses, the British rural landscape, including that of my
Stratford-on-Avon constituency, is defined by small, family-run
farms. They are our local food producers, and they are part of
our communities. How do the Government plan to protect this
heritage against the pressure to sell to multinational
agribusinesses in the face of a significant inheritance tax
burden?
We treasure our wide range of farms, which are very different in
different parts of the country. The agricultural budget is at its
highest level ever and it will provide support, particularly to
small farms. The previous Government ended the five-hectare
minimum level. I strongly support that and it will continue to be
the case.
(West Suffolk) (Con)
Farming families in West Suffolk feel deep anxiety, in common
with those in other constituencies, as hon. Members from across
the House have explained. When those families hear the Minister
say that they do not understand the detail, or that they should
listen to commentators who agree with the Minister but not
them—commentators who probably have nothing to do with farming in
the first place—they will be furious with him. Will the Minister
apologise to those people? If it is not such a big deal, will he
explain why more than 130,000 people have already signed the NFU
petition telling him to change the policy?
At no point did I say that farming families did not understand
the detail. What I asked was for Members on the Conservative
Benches to look at the detail, because when they look at the
detail, they will find the truth.
(Bicester and Woodstock)
(LD)
Family farmers in my constituency of Bicester and Woodstock are
left confused and angry by this betrayal by the Government over
APR. They want to know whose daft idea it was. Will the Minister
clarify whether the measure was proposed by DEFRA, as part of the
stability for farms that he outlines, or did it come from the
Treasury?
There is nothing daft about putting this country's finances on a
sound footing. I say to the hon. Gentleman's constituents, if
they want a decent health service, schools and transport, this
Budget will deliver that.
Dr (Bexhill and Battle)
(Con)
May I politely suggest to the Minister that the time for his
weekend reading was before deciding the policy, not afterwards?
Farmers in my constituency, including Jonathan Vine-Hall, tell me
that the change to the relief will make it financially non-viable
to pass on his very typical 450 acre farm. Does the Minister
agree with me that the likely outcome of that will be that
disinterested investors will buy the farm instead, which is
exactly what he seeks to avoid?
The likely outcome will be that people will put arrangements in
place to pass on their farms at the appropriate time, pulling
more younger people into farming, which will be a good thing. My
overall message to farmers across Britain is, “This Government
are on your side. We will support you. Look at the agricultural
budget and the money that has been paid out of the flood budget.
We are with you. Don't listen to these people.”
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