HC Deb 08 February 1972 vol 830 c1121
10. Mr. David James

asked the Minister of Agriculture, Fisheries and Food what plans he has to increase the number of viable agricultural units, in view of the effect on existing agricultural units of present rates of estate duty.

Mr. Prior

Our proposals to make the farm structure schemes more effective were explained in the Second Reading Debate on the Agriculture (Miscellaneous Provisions) Bill. The operation of estate duty has not prevented a steady increase in the average size of farms and I believe our proposals will accelerate this increase.

Mr. James

My right hon. Friend will recall that he agreed last year that there was a clear clash of policy objectives between his Ministry and the Treasury. Can he indicate how that clash will be resolved and explain how British farmers will be able to compete under E.E.C. conditions, where capital taxation on land is very considerably lower?

Mr. Prior

Both those are matters for my right hon. Friend the Chancellor of the Exchequer. However, my hon. Friend should recognise that we have no evidence that estate duty has deterred amalgamations. Where a farm has been split up, generally it has been joined to other farms to make those farms bigger. But we are keeping the matter under consideration, and I am in touch with my right hon. Friend the Chancellor of the Exchequer.

Mr. Brewis

Has my right hon. Friend considered the serious effect of capital gains tax when a farmer wishes to retire and to pass on his farm to his son?

Mr. Prior

We have been considering this carefully. This is another matter on which I am seeking further advice.