Atkins urges Labour MPs to support Tory efforts to ‘axe the family farm tax’
The Government defended the proposed changes to inheritance tax and believes around 500 estates a year will be affected.
Labour MPs have been urged to support calls to “axe the family farm tax”, as Chancellor Rachel Reeves was accused of “cock-eyed accounting” over the policy.
Shadow environment secretary Victoria Atkins made the plea as she moved a Tory motion warning that the changes could “lead to the end of family farming as it has been known for many generations” in the UK.
Under measures announced at the Budget, farmers will pay a rate of 20% inheritance tax on agricultural property and land worth more than £1 million when they previously paid none.
There is a higher threshold of £3 million for couples passing on their farms.
The Treasury says around 500 estates a year are expected to pay inheritance tax under the changes, but Ms Atkins cast doubt on the numbers and criticised the Chancellor’s “cock-eyed accounting” as she opened an Opposition Day Debate in the Commons.
The Conservative motion said figures from the National Farmers’ Union suggest that “some three quarters of farms will be affected” while the Central Association of Agricultural Valuers anticipates the policy “will affect 75,000 owners of farming businesses over a generation”.
Ms Atkins raised the “worry, distress and sense of betrayal” felt by farming families over the policy, before telling the Commons: “We’ve taken the unusual step actually of giving lots of notice to Labour MPs that we would be debating Labour’s family farm tax today.
“We did this because we wanted to give Labour MPs in rural seats time to reflect and consider whether they can continue to support this vindictive tax.”
She added: “Before ambitious backbenchers, or indeed (Treasury minister James Murray), get to their feet and accuse these farmers and us of scaremongering – something they’ve been happy to do in the past – think on, discover some humility and compassion and ask why tens of thousands of decent, hard-working and sensible people across the United Kingdom know that the Chancellor has got it so wrong.”
Ms Atkins highlighted polling for the Country Land and Business Association (CLA) that suggested more than half of rural voters trust Labour less after the Budget, adding: “So I say to every honourable member opposite: do the right thing, stand up for our farmers who are the best in the world and whose produce is renowned globally.
“They feed us and now they need us. Labour MPs need to join us and axe the family farm tax.”
The Government has tabled an amendment which defends the proposals and highlights a commitment of £5 billion to the farming budget over the next two years.
The amendment also states the Government has to “make difficult decisions to protect farms and farmers in the context of the £22 billion fiscal black hole” left by the previous Conservative government.
It adds: “Under the changes announced in the Budget around three quarters of claims for agricultural property relief, including those that also claim business property relief, are expected to not pay more inheritance tax.”
Speaking in the debate, Treasury minister Mr Murray declined to be drawn on whether the Treasury would consider a U-turn on the policy in future if data shows the Government made a mistake.
On how many farmers might pay agricultural property relief on inheritance tax, Mr Murray said: “It is not possible to accurately infer a future inheritance tax liability from data on farm asset values.
“Any inheritance tax liabilities that farming assets may face would be affected by who the owners are, the nature of ownership, how many owners there are, any borrowing they have, and how they’ve planned their affairs.”
Intervening, Reform UK deputy leader Richard Tice asked: “Will the minister agree, given the massive discrepancy in the impact of this policy, that if the data shows in 12 months, in 24 months that the Government had got this catastrophically wrong, that you will actually revisit this policy and do a U-turn?”
Mr Murray replied: “When we approach policies in Government, we thoroughly test them and consider the detail of that policy. We consider the data of that policy and we make sure that any conclusions we draw are based on the correct set of data.”
