Commons condones family farm tax

Yesterday (04 December) the House of Commons met for an Opposition Day debate on the family farm tax. The motion, brought by the Conservative Party, offered MPs an opportunity to condemn cuts to Agricultural Property Relief and Business Property Relief and call on the Chancellor to reverse them. Given the scale of the government’s majority it is unsurprising that the motion was defeated by 339 votes to 181. 

 The Shadow Defra Secretary, Victoria Atkins MP, opened the debate. She thundered: 

 “This Government have driven farmers to despair. The hike in national insurance, the acceleration of delinked payments, the fertiliser tax, the double cab tax, the stalling of capital grants, the scrapping of the rural services delivery grant and the slowing down of applications to farming schemes are all conspiring against our rural economy and the survival of British farms. Yet the Government have added a death tax to that: the family farm tax, which is seeing families across the United Kingdom worry about whether they will be able to hand on their farms to their children, as generations before them have done.” 

 Her speech reiterated doubts cast on the Treasury’s impact calculations by the rural sector; this was partly driven by numerical analysis but, like Baroness Northover (LD) in the House of Lords debate on 25 November she also put human faces on the policy, including a widow’s family that expects “an additional £200,000 tax bill from Labour because their father died before the Budget and so did not know to transfer his allowance.” She went on to remind MPs of the declaration by Steve Reed MP, now Defra Secretary, during the election campaign that suggestions Labour would introduce this tax were “desperate nonsense”. 

 The government response was led by James Murray MP who, as Exchequer Secretary to the Treasury, has responsibility for the UK tax system. His speech was replete with the lines the government has used since the controversy erupted: we value and are committed to farmers, but we inherited a £22bn black hole in the public finances and have had to take difficult decisions to fix it.  

 On impacts, he said that the HMRC’s inheritance tax claims data are the best set to use so the Treasury’s calculations are correct, although when challenged by Greg Smith MP (Con, Mid Buckinghamshire) about the experience of a small farm in his constituency, he simply said he could not give specific tax advice. 

 On the government side, the remainder of the debate was characterised by a succession of Labour MPs rising to read lines in defence of the Chancellor’s policy prepared, apparently, by the party HQ. There were two notable exceptions. Markus Campbell-Savours MP (Penrith and Solway) noted that the motion would not technically determine the fate of the farm tax but went on to say, 

 “Let me be clear: if today was the real vote, I would vote against the Government’s plans... [D]uring the election, I read what I thought were assurances from my party that we had no plans to introduce changes to APR. On that basis, I reassured farmers in my constituency that we would not, and now I simply am not prepared to break my word.” 

 In a similar vein, Sam Rushworth MP (Bishop Auckland) attacked the wording of the motion but said that before reading it “I was genuinely unsure how I would vote,” and offered a reasoned suggestion of a way forward: 

 “[W]e know that 7% of wealthy claimants account for 40% of the cost of APR, but that means that 93% are costing only £382 million. It would be interesting to know how much money it would cost to slightly lift the thresholds or to address the concerns about life insurance.” 

 For the Liberal Democrats, both the party’s rural affairs spokesman, Tim Farron MP, and the new Chair of the Environment, Food and Rural Affairs Committee, Alistair Carmichael MP spoke out against the tax although Mr Farron concentrated his fire on the Conservatives, accusing the party of failing to make adequate financial support available to farmers while in government. Mr Carmichael advocated a claw-back mechanism by which liability for inheritance tax would only arise if land was sold. 

Robbie Moore MP, Shadow Defra Minister, summed up for the Opposition by refocusing on the individual farming families this tax will hit: 

 “This morning, ordinary farming families across all four corners of our United Kingdom will be waking up to another day of hard graft… the kids will be out early helping their parents feed the livestock, dad might be milking the cows or perhaps out crop-walking with the agronomist, rightly concerned about the impact of recent wet weather, and mum will no doubt be battling the elements, keeping the whole operation running smoothly and somehow still finding time to make sure everyone has their wellies on the right feet… 

 “But today these farmers will also be waking up with the crushing reality that they now face losing everything they have ever worked for—everything that their mum or dad or the generations before them worked for—all because of this Labour Government’s disastrous farm tax.” 

 He condemned those Labour MPs who had “failed to publicly call out our city-dwelling Prime Minister and Chancellor’s callous Budget,” re-committing his party to reversing the tax should it return to government. 

 Defra Minister Daniel Zeichner MP closed for the government. After praising his party colleagues’ contributions, he pledged continued engagement with the rural sector and excoriated the Conservatives’ record on trade deals and agricultural support. He doubled down on the Treasury figures showing 500 farms a year will be affected before claiming, perhaps dubiously: 

 “The reforms will not be introduced until April 2026, so there is plenty of time for people to plan for change and to get, as they always should when running major businesses, professional advice about succession planning.” 

 It is curious that the government has introduced a tax that it explicitly expects people to plan to avoid. The problem is, not everyone can. 

 Governments with working majorities of the order of 163 do not lose opposition debates. Less certain, however, is the outcome of a debate set to take place in the London Assembly later today: Susan Hall AM, who in May stood as the Conservative Party candidate for Mayor of London, is bringing a motion calling on Labour’s Mayor Sadiq Khan to lobby the government against the tax. If opposition parties unite, the motion could pass; the equivocal Green Party’s three Assembly members will likely be the swing vote. Disappointingly, two of the party’s four MPs lined up behind Labour yesterday to oppose the Commons motion. The other two abstained, and none contributed. 

 The Countryside Alliance has provided Mrs Hall with briefing material at her request, and we look forward to the debate.