Farming and Inheritance Tax
Victoria Atkins Excerpts(2 weeks, 5 days ago)
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Victoria Atkins (Louth and Horncastle) (Con)
I beg to move,
That this House regrets that the Government has undone its promises to farmers, and is seeking to punish them with Inheritance Tax bills of hundreds of thousands, or even millions, of pounds by cutting Agricultural Property Relief and Business Property Relief; further regrets that the Government has provided conflicting information on the number of farms that will be affected, and has not conducted an impact assessment of this approach; notes that figures from the National Farmers’ Union suggest that some three quarters of farms will be affected; further notes that farmers tend to be asset-rich but cash-poor and that figures from the Country Land and Business Association suggest the average arable farm will have to sell 20% of its land to pay the Inheritance Tax bill that this policy will cause; notes that the Central Association of Agricultural Valuers anticipates that this will affect 75,000 owners of farming businesses over a generation; notes also that this land is not guaranteed to be used for food production if sold; and calls on the Government not to impose the cuts to Agricultural Property Relief and Business Property Relief set out in the Budget that will lead to the end of family farming as it has been known for many generations in the UK.
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.
In the 36 days since Labour’s Budget, the Chancellor, the Secretary of State and Ministers have tried to justify their family farm tax, which will break up family farms, by claiming that only 500 farms will be affected each year. Awkwardly, the figures used by the Chancellor are contradicted by figures produced by the Department for Environment, Food and Rural Affairs. The left hand does not know what the far-left hand is doing. When the figure was queried by the National Farmers Union, the Country Land and Business Association, the Tenant Farmers Association, farmers across the United Kingdom and us Conservatives, Ministers told us all rather patronisingly that we did not understand and that farmers should seek professional advice. Well, farmers have sought professional advice, which has revealed just how badly wrong the non-economist Chancellor has got her numbers.
Victoria Atkins
In a moment.
Since the Budget, the Central Association of Agricultural Valuers has analysed the family farm tax and applied tax law and the realities of modern-day farming to it. Its analysis has revealed that up to 75,000 individual owners of farming businesses could be affected over the coming generation, even before inflation, which is the equivalent of five times the Government’s figure of 500 farms affected in 2026-27. How could they have got this so wrong? It is because this city-dwelling Chancellor, Secretary of State and Exchequer Secretary do not understand modern farming or the countryside that they have overlooked a major area of tax policy and forgotten to consider thousands of farmers.
As the Exchequer Secretary has confirmed, the Government forgot to include one of the three routes to the relief in their calculations. They have not included business property relief-only claims in their figures, which means that as many as 14,000 tenant farmers who cannot claim agricultural property relief because they do not own the land on which they farm are absent from their calculations. What is worse is that Ministers do not know how many farmers are affected by that.
The city-dwelling Chancellor and Secretary of State have also forgotten about the farmers who in years gone by followed professional advice and transferred their farms into companies or partnerships. Those farmers will claim only BPR, so they have been left out of the calculations. Again, Ministers do not know how many farmers are in that position.
Alison Hume (Scarborough and Whitby) (Lab)
Will the right hon. Member give way?
Victoria Atkins
I will in a minute.
I am told by advisers that some farmers choose to use BPR only because it is easier in probate. Guess what? Yet again, Ministers do not know how many farms are in that position, and they have not been included.
I will give way first to the hon. Member for Strangford (Jim Shannon) and then to the hon. Member for Scarborough and Whitby (Alison Hume). I have so much more to say.
Jim Shannon
I commend the shadow Minister for bringing forward the debate. The collective decision to have this debate in the House is one that my farmers and constituents very much support. Professional legal advice sought through the Ulster Farmers Union—I must declare an interest as a member of the union—indicates that somewhere in the region of 65% of small farmers and family farms in Northern Ireland will be affected. When it comes to understanding that, has Labour really got no idea what is going on?
Victoria Atkins
I thank the hon. Gentleman for intervening. The evidence is building again and again against the assurances that the Chancellor, the Secretary of State for Environment, Food and Rural Affairs, the Exchequer Secretary and the farming Minister have given the House. Frankly, the farmers outside deserve better, and so do we as Members of Parliament.
I will give way to the hon. Lady and then carry on with the calculations that the Government have got so wrong.
Mr Speaker
Order. I know that Members are jeering about reading. I know that when I came to the House it was a rule that you should not read, but both sides are doing it. Remember that.
Victoria Atkins
As the first female Prime Minister said, if they are going after you personally, it means you are winning the argument.
Let me help the hon. Member for Scarborough and Whitby with the second set of calculations that her Chancellor has got so wrong, because the Chancellor’s cockeyed accounting extends to the claim that farmers will be able to transfer £3 million tax-free. That is wrong. Only a few in a specific set of circumstances will be able to claim that magic figure. [Interruption.] There are jeers from Government Members, but that amount is not available to widows, it is not available to people who are single and it is not available to people who own a farm with another relative. Labour’s magic £3 million figure assumes that the surviving spouse lives some sort of monastic existence where they have no personal effects to pass on to their loved ones. As farmers from Sussex have asked, why are widows’ families being targeted?
A family wrote to me about their mother, who is a widow. They have calculated that they face an additional £200,000 tax bill from Labour because their father died before the Budget and so did not know to transfer his allowance.
We know that some Labour Members of Parliament have concerns. The hon. Member for South West Norfolk (Terry Jermy), who represents over 500 farms—I do not know whether he is in his place—has asked for assurances on the accuracy of figures used by the Government. Given the demolition of the Chancellor’s figures by the CAAV and many others, will he vote for the family farms in his constituency or will he toe the party line?
The CAAV’s concern about the figures being peddled by the Government is shared by the Institute for Fiscal Studies, CBI Economics and even the Office for Budget Responsibility. But it is not just about the numbers: Labour Members need to understand the emotional toll of this terrible tax. It is the worry, the distress and the sense of betrayal felt by families that should stop ambitious Labour MPs in their tracks before they parrot without question the figures given to them by their Ministers.
Victoria Atkins
I will give way to the hon. Lady. I hope that she does not fall into the category that I just described.
Helena Dollimore
The right hon. Lady talks about the figures. Does she accept that her Government’s record was one of leaving £300 million of the farming budget unspent in the Treasury coffers, not helping farmers?
Victoria Atkins
I thank the hon. Lady sincerely for raising that point, because she has—perhaps unwittingly—identified a contradiction in DEFRA’s own claims. It talks about a £300 million underspend, but last week it was cancelling the very capital grants that farmers around the country have been investing in, saying that it had run out of money. Well, it cannot be both. Perhaps that is yet another example of the cockeyed accounting of the Chancellor and the Environment Secretary.
Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)
Does my right hon. Friend agree that what is quite frightening about this policy is that perhaps the Government know exactly what they are doing, and that, a bit like “Animal Farm”, they think everything should be collectivised?
Victoria Atkins
My right hon. Friend, who has a wonderful way with words, asks a question that many members of rural communities up and down the United Kingdom are asking themselves. In fact, when the Prime Minister did regional media a couple of weeks ago, Sean Dunderdale, the wonderful presenter on BBC Radio Lincolnshire, asked him what he had got against the people of Lincolnshire. I might ask: what have this Labour Government got against the countryside?
Victoria Atkins
I will give way to my right hon. Friend and neighbour and then I will make some progress.
Sir John Hayes
As my right hon. Friend has said, the word “betrayal” is fitting because, long before the election, pledges were given, by both the Secretary of State and the Prime Minister, that these changes would not be made.
Sir John Hayes
Mr Speaker, I know that you, as a man of integrity and honour, will be as disappointed as I am that the Government should promise one thing and then do the exact opposite.
Victoria Atkins
It is a great pleasure to have the right hon. Gentleman not just as a friend but as my Lincolnshire neighbour. He has put his finger on the point—genuinely, it is the next paragraph in my speech.
Some Labour MPs must be haunted by the phrasing from the Secretary of State during the general election campaign—because I suspect that they repeated it up and down the market towns and villages in their constituencies—when he described fears that Labour would impose this family farm tax as “desperate nonsense”. Labour candidates will have repeated that line and assured the farming families in their constituencies that Labour would never treat rural communities in that way, yet within weeks the Chancellor was planning to do exactly that.
Since then, families across the country have been trying to work out how to pick up the pieces after Labour’s family farm tax bomb. They will not forget. A farmer from Derbyshire emailed me this week to say:
“Our hard work and investment as a family has been wiped away in the stroke of a pen.”
They went on to say:
“My 60 year old husband had a bleed on the brain in June and thankfully has made a full recovery but I’ve never seen him so stressed. He doesn’t know what to do”.
Hon. Members representing seats in Derbyshire may wish to reflect on how they will respond to that. A farmer from Northumberland has written to me as follows:
“We had to talk about which one of my parents are going to die first, in front of them.”
He said that Labour is
“destroying people’s lives with this policy. Many of us are worried about the mental state of many within agriculture and are concerned that it may be the final straw for some.”
In fairness, the hon. Member for Hexham (Joe Morris), who is in his place, has voiced concerns about whether his Government are listening to ordinary people about this. Will he vote for his farmers or will he toe the party line?
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
As a farmer’s wife, I understand the emotional impact that my right hon. Friend sets out so clearly. This is about not only the farmers who will be affected but all the farmers who know that they might be affected. This is a tax on tragedy, and no one knows if it will befall them.
Victoria Atkins
My hon. Friend and Lincolnshire neighbour sets out exactly the personal impact of the tax. I know how Treasury Ministers look at spreadsheets and those terribly impressive packs of information from civil servants. [Interruption.] I remind Government Members that this is deeply serious; it is not a joke. I also know that Chancellor after Chancellor has looked at the figures and come to the conclusion that this is a political decision. The current Chancellor has got it wrong.
Baggy Shanker (Derby South) (Lab/Co-op)
The shadow Secretary of State made an important point about the health and wellbeing of our farmers. As operation waiting times were almost three times higher when she was Health Secretary than they were in 2010, does she not welcome the investment that this Government are putting into our NHS? [Interruption.]
Victoria Atkins
Do not worry; I will deal with that. I thank the hon. Gentleman for raising the important issue of mental health in farming across the national health service. I was proud to work, as a Member of Parliament and as Secretary of State for Health, to massively increase investment in mental health services. If he is a rural MP, I am sure that he will know how isolated farmers can be and the pressures on their emotions at the best of times—they have the weather, diseases and crop cycles to contend with. This pressure merely adds to that, as we have already heard from farmers who have contacted me.
I also gently remind the hon. Gentleman that the family farm tax—or tax on tragedy, as my hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) called it so bleakly—will raise £500 million in 2026-27. According to the King’s Fund, that is equivalent to about a day’s worth of services in the NHS in England. It will not be quite the game changer that some in the hon. Gentleman’s party believe it to be.
What about the family in the south-west whose beloved father died a decade ago in tragic circumstances, leaving three young children who are now in their teens? The mother has run the farm and brought up their children in the midst of their grief. She has now been diagnosed with a life-threatening illness at the age of 50. Two of the children want to carry on the farm when they reach 18 but, should the unthinkable happen and they lose their mum, they will be saddled with Labour’s family farm tax of £700,000. What empathetic and meaningful response does the Secretary of State, who is not in his place—where is he?—or the Treasury Minister have for that family? They will be watching and listening.
We took the unusual step of giving lots of notice to Labour MPs that we would debate Labour’s family farm tax today. We did that because we wanted to give Labour MPs in rural seats time to reflect and consider whether they can continue to support this vindictive tax. For example, a Welsh landowner told me that he will have to sell six tenanted farms to pay Labour’s family farm tax. That is six farming families—who we on the Opposition Benches would describe as working people—who will lose their businesses, their family homes and their children’s farming futures. Those six farming families have been forgotten by this Government.
The hon. Member for Montgomeryshire and Glyndŵr (Steve Witherden) has called on the Treasury to produce its modelling on the impact on family farms. Will the Treasury do that, at the Back Bencher’s request? How will he vote today? The hon. Member for South East Cornwall (Anna Gelderd) met farmers earlier this month and claimed that she would take their concerns back to Westminster. Will she raise those today and vote against this tax?
Sir Roger Gale (Herne Bay and Sandwich) (Con)
I have consulted widely with farming communities and farmers in my constituency. I have not been able to identify a single farmer who feels that there is anything good in this policy whatsoever. Does my right hon. Friend know whether there is a single Labour Member of Parliament representing a rural community who genuinely believes that they will be voting in their constituents’ interests tonight?
Victoria Atkins
I sincerely thank my right hon. Friend for setting out clearly the choice ahead of Members across the House. We on the Opposition Benches know who we are standing up for. We back our farmers. We understand how difficult farming is as a way of life. It will be for individual Members of Parliament to decide how they vote.
Shaun Davies (Telford) (Lab)
The right hon. Lady talked about choices and backing farmers. The current Leader of the Opposition did a trade deal with Australia and New Zealand that sold farmers down the river. Is that her version of backing British farmers?
Victoria Atkins
I am pretty sure that the hon. Gentleman has his facts wrong about the then Trade Secretary. The Conservative party is in favour of trade deals, but we want trade deals that best support our farming industry. [Interruption.] Before Labour Members start shouting at me, he will know that the fears and concerns about those trade deals have not come to fruition. What is more, we as Conservatives are proud of the fact that we would not enter trade deals that require the flooding to these shores of chlorinated chicken or hormone-treated beef. I also gently remind the hon. Gentleman that, as a Back Bencher, talking about foreign territories given the context of the debate about the Chagos islands is a bit brave.
Simon Hoare
My right hon. Friend is right to highlight the devastating effect of this policy and to highlight the incredible rounding-up exercise on the Treasury account books of the contribution that it will make to NHS expenditure. With the Labour party having a serious foothold in rural constituencies for the first time since 1945, does she not find this rather inept politics, which is perhaps not surprising from such a London-centric Front Bench? The policy shows a wilful ignorance of rural life and a deliberate attempt not to understand the pressures and is, in essence, selling those rural Labour MPs down the river.
Victoria Atkins
I thank my hon. Friend for that point. There is some interesting polling coming out today, which I will deal with. Of course, Mr Speaker, I very much accept your point about trade, but we are genuinely concerned about the national security implications of the Chagos islands deal.
Victoria Atkins
Very much so, Mr Speaker. I will give way to the hon. Member for Hexham (Joe Morris). Is he going to speak up for his farmers?
Joe Morris (Hexham) (Lab)
I commend the right hon. Lady’s commitment to honesty. She talks about giving Labour Members advance sight of the Opposition day motion, but when did the Labour Whips Office receive the title of the Opposition day debate? May I invite her to correct the record perhaps?
Victoria Atkins
I am so sorry—in fairness, the hon. Gentleman was obviously speaking to farmers in his constituency on Sunday. Did I hear that there is a protest going on in his constituency at the moment? In any event, I actually made the announcement on national television on Sunday; perhaps he was not watching. Farmers at home will be wondering what on earth we are arguing over.
Pete Wishart (Perth and Kinross-shire) (SNP)
One word that the right hon. Lady has not mentioned is Brexit—the great Tory disaster of the last Parliament. How much does she estimate that Brexit cost farmers and the rural community?
Victoria Atkins
The hon. Gentleman and I, unusually, can join forces on this matter. While I am going to resist the temptation to revisit Brexit, what I will do is point him to paragraph 4.11 of the CAAV report—
Mr Speaker
Order. You are facing totally the wrong way—I cannot pick up anything. Please turn around.
Victoria Atkins
My apologies, Mr Speaker. I am reminded of paragraph 4.11 of the CAAV report, which sets out the peculiar legal problems posed by the family farm tax in the context of Scottish farming tenants. It is incredibly complicated, but that is a real concern, and I trust that the SNP will be exploring it alongside Conservative Members of Parliament.
In conclusion, before ambitious Back Benchers, or, indeed, the Exchequer Secretary, get to their feet and accuse these farmers, and us, of scaremongering—something they have been happy to do in the past—they should 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. Polling by the Country Land and Business Association today shows what the public think: they do not think farmers should be whacked with the family farm tax. They think that Labour has broken its promise to end countryside decline; they think the Government should be cutting taxes on rural businesses; and 70% are not confident that the Labour Government can deliver growth to rural communities.
I say to every hon. Member on the Government Benches: do the right thing and 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.