4. What consideration has the Cabinet Secretary given to the impact of UK Government changes to the agricultural inheritance tax on the sustainability of rural communities? OQ62514

Thanks, Siân. Inheritance tax is a reserved tax, overseen by the UK Government. I have consistently emphasised to the UK Government the importance of thoroughly considering the ongoing valid concerns of the Welsh farming unions in a collaborative way.

We've heard a number of times in this Chamber about the damaging impact that changes to inheritance tax could have on family farms and rural communities. And, whilst I understand that this is a decision taken by another Government—and there's been no change announced today, by the way—isn't there a responsibility on you not only to convey the arguments, but also to assess the possible impact on Wales—for example, to assess the impact of the change on the ability of Wales to produce food into the future and how that aligns with the Well-being of Future Generations (Wales) Act 2015; for example, to assess the impact of the change on the use of the Welsh language and how the threat to the family farm aligns with the 'Cymraeg 2050' strategy? Having assessed and uncovered the impact, your Government could create a better argument over the need to either reverse the change or for taking steps to mitigate its impact. 

Thank you very much for that supplementary, Siân. 

Look, to be clear, we're not planning to undertake an impact assessment, such as the one that they've done in the Northern Ireland assessment, primarily based on farm valuations, because that's what it is, if they can't provide a robust and accurate assessment of the likely impact—it's a farm valuation assessment. Without crucial information on individual farm circumstances, such as the farm ownership structure, the gifting statements, no accurate assessment of actual impact is possible. Now, the assessments based on value alone may provide a rough assessment of the potential maximum—maximum—numbers of farms that could be above the inheritance tax threshold across an entire generation. But without that data on individual farm circumstances, such a figure is probably inaccurate and could be misleading as well, because it's set at the maximum impact of the possible IHT changes. So, those ownership structures, inheritance plans, applicable reliefs that may apply, they all affect the application of APR. Farm values also fluctuate, so it's difficult to estimate how many are valued over IHT thresholds at any given point. So, for this reason, that is why we use the Treasury data as a starting point, as they're based on probate figures. However, let me say quite clearly, and this is the basis of the representations that I've made, the assessments by people such as the Central Association of Agricultural Valuers, the CAAV, have raised valid concerns that HM Treasury's assessment may be underestimating the impact. Now, these valid concerns, let me be clear, we've made clear, should be fully addressed in a collaborative way with farming unions by the UK Government.

Just to say, the other thing that we can do to make a real difference here in Wales is actually continuing to work as we are with the farming unions and with wider stakeholders to make sure that we have a good footing for the future of farming in Wales through the SFS, and we've sought assurances from the UK Government that any changes will not affect the approach that we're trying to take there of delivering not just the economic value, but the social and cultural value, and the importance of the Welsh language to farming in many, many parts of Wales. So, we'll keep on pushing on those representations, saying it here in the Chamber as well. We want to see meaningful engagement with the analysis, but I come back to that point: the data simply based on farm values alone at any given point in time is likely to be not an accurate estimate, because it's purely based on those; it's not taking into account individual farm circumstances.

The UK Government's inheritance tax changes target our family farms through cuts to the agricultural property relief and business property relief, posing an existential threat to Welsh family farming tradition, and many farming families in my constituency are despondent about these changes, fearing it puts their farms in peril. From April 2026, the average Welsh farm will face a 20 per cent inheritance tax, and it's important to stipulate, Cabinet Secretary, these aren't wealthy tycoons, or moguls even, they are cash-poor farming families, and have been stewards of our land for many generations, and are now forced to sell to survive. The scale is staggering. The National Farmers Union and others warn that 70,000 farms, two thirds of Britain's total, could be affected. This isn't taxation; this is asset stripping. Family farms will be torn from their owners and snapped up by large asset managers like BlackRock, who the Prime Minister, Keir Starmer, has already started cosying up to. This policy threatens food security, slashes land values—

You need to ask your question now, please.

—and hands our heritage to hedge funds and megabanks, with a former Labour adviser even gloating about crushing farms like Thatcher crushed the mines.

Gareth, you need to ask your question, please.

This is a betrayal of rural Wales. So, can the Cabinet Secretary tell me what the Welsh Government are doing to reassure farmers in north Wales that livelihoods matter, and, more pointedly, can you tell us honestly if Labour is truly on the side of working people, or are they in the pockets of international megabanks who are going to be accruing more and more farms in their property portfolios?

Thank you, Gareth. Dirprwy Lywydd, I don't want to repeat the previous exchange and the explanation that I gave to Siân's question leading on this, and I certainly don't want to respond to a political rant. But what I will do is explain what the Welsh Government is actually doing on the ground to support Welsh farmers in the light of these changes. We're actually holding, right across Wales, in light of the IHT changes, through our organisation Farming Connect, a series of workshops. Right across Wales, there have been 10 workshops. They've been very well received, Dirprwy Lywydd. Close to 1,500 farmers have attended not only to understand the implications of the changes, but to talk through things such as succession planning, gifting and so on. So, away from the political rant that you just did, Gareth, we are doing very practical things with the farming community.

The workshops are just the beginning of the support, Dirprwy Lywydd, that we are making available. Farming Connect is providing access on an individual basis to facilitated family succession meetings. I've been in some of these, where they sit down with families. I've talked to farmers, Dirprwy Lywydd, and I know you and I have met with farmers, as well, who've said, 'Well, we've got somebody who's a 70, 80-year-old, who has never got round to it.' Farming Connect can provide that advice, bespoke, person to person, to those farming families, succession reviews to understand tax implications, and subsidised business and legal advice to develop succession plans. We've also, by the way, Gareth, as you know, supported the retention of the basic payment scheme, the BPS budget, at £238 million for 2025—the same level as the last two years. We've made that decision. It didn't happen, by the way, across the border with the Conservative Government; the Conservative Government slashed it. We've kept it to give that certainty, and this was not an easy decision. More than 98 per cent of claimants have now received their full or partial balance of BPS 2024 since the window opened in December. We've now paid out over £232 million. So, Gareth, you asked what are we doing to help farmers navigate through these changes: everything we possibly can. Not only that, we're putting the money in place to support farmers that the previous Conservative Government never did.