Select committee: Welsh Affairs Committee
Recommendation 8
2nd Report - Farming in Wales in 2025: Challenges and Opportunities
Published 12 Nov 2025
Addressed to Wales Office
Welsh Affairs Committee Farming in Wales in 2025: Challenges and Opportunities All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
We are disappointed that the Government has maintained a complacent approach to measuring the impact of these tax changes despite the scale of public disquiet in Wales. In the absence of a Wales-specific Impact Assessment, the UK Government must delay implementing its final APR and BPR reforms until one has been published and scrutinised by the Welsh Affairs Committee. We recommend that, working in collaboration with the Treasury, HMRC, Wales Office and Welsh Government, all the available data that relates to farm ownership in Wales should be revisited to develop a more detailed understanding of the potential impact the changes to IHT may have on farmers in Wales who intend to leave their estates to the next generation of Welsh farmers. (Recommendation, Paragraph 54) Funding, Ringfencing & Barnettisation
From: Welsh Affairs Committee, 2nd Report - Farming in Wales in 2025: Challenges and Opportunities (HC 785), 12 November 2025
Government response
The government responded to the whole report on 30 January 2026 (deadline 12 January 2026).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government's response sets out its reasons for maintaining the inheritance tax reforms, does not say it will publish a Wales-specific impact assessment, and sets a target of 2027 for SPS arrangements, "subject to agreement with the EU".
- On inheritance tax, it does not commit to delay. It announced in December 2025 that the allowance for 100 per cent relief will rise from £1 million to £2.5 million, and says the reforms from 6 April 2026 "get the balance right".
- It says claims data is not recorded in a way that enables regional breakdowns, so a Wales figure is not readily available, and that a tax information and impact note has been published for UK-wide changes.
- On funding, it states that agriculture funding has been added to baseline funding and "will be maintained in cash terms", is "no longer ringfenced", and that the Welsh Government decides how to use it.
- On trade, it does not commit to the Committee's May 2026 roadmap or the May 2028 action plan. It says there is "no evidence" the Australia and New Zealand agreements have affected Welsh beef or lamb production.