Inheritance Tax Relief: Farms

Charlie Dewhirst Excerpts

Monday 10th February 2025 Westminster Hall

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

I thank the petitioner and the hundreds of people in my constituency who signed the petition.

As my right hon. Friend the Member for Beverley and Holderness (Graham Stuart) eloquently put it, it is encouraging to see many more MPs present on the Government Benches. I mean that genuinely; previous debates have been a little sparsely attended on those Benches, so I hope this is a sign that things are slowly turning and that there may be change to come.

The hon. Member for South Norfolk (Ben Goldsborough) said that we should not be treating this issue as a political football. That message did not quite reach the hon. Member for Bishop Auckland (Sam Rushworth), but I agree that, although it has become a political football, the problem is that the people outside right now feel that they have not been listened to by this Government. The reason there are again hundreds of tractors and thousands of people outside on Whitehall is that people feel their voices are not being heard. That is why we are in here and they are out there: because nobody has listened to them up to this point.

I want to go back to a point well made by the NFU president in front of the Environment, Food and Rural Affairs Committee in December. He said that the Government should set the sector the exam question and say what they are trying to achieve here. Then the sector can work with Government to reach that agreed point: either to prevent land banking by very wealthy individuals or to raise revenue to support rural public services. Whichever it is, let us get round the table and find a solution that works for all.

However, I fear that those in the Treasury have become like modern-day flat earthers—holding their position in the face of overwhelming evidence to the contrary, whether from agricultural organisations, tax experts, supermarkets or MPs from across the political divide questioning the impact of this tax. We know that the modelling does not take into account the full impact of business property relief. It largely focuses on agricultural property relief claims, but many people, including tenants, family businesses and farming businesses, will only use a BPR claim and not an APR claim. That is why we need to look at this policy again in its entirety.

I ask the Minister once again—dare I say beg him—to please pause this process. Let us get round the table with farming organisations and representatives, and find a better way forwards.

[Dr Andrew Murrison (in the Chair)]

I hope that colleagues who want to speak are on my list. If you are on the list, that is great, but you must still bob; otherwise, I will assume that you no longer wish to speak.

--- Later in debate ---

[James Murray]

What has driven the Government in making the decision to reform agricultural and business property relief is the overwhelming priority of fixing the public finances in a fair and sustainable way. That is why the statistics to which I just referred, about how agricultural and business property relief have come to be used in recent years, are important for understanding the context in which we decided that the time for reform was now.

[Charlie Dewhirst]

rose—

[Ben Lake (Ceredigion Preseli) (PC)]

rose—

Agricultural and Business Property Reliefs: OBR Costing

Charlie Dewhirst Excerpts

Thursday 23rd January 2025 Commons Chamber

[James Murray]

The way to calculate the impact of changes to inheritance tax policy is to look at the inheritance tax claims that have been made, and that is what we have used as the basis for our calculations. In fact, the OBR publication yesterday confirms that it used HMRC’s data on inheritance tax reliefs in the past and inheritance tax projected forward, and it is on the basis of that data that we designed our policy.

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

The Minister has just confirmed that the Treasury’s modelling is based on agricultural property relief and joint agricultural and business property relief claims, yet tax experts have said in evidence to the Environment, Food and Rural Affairs Committee that many family farms will wrap their agricultural land into a single business property relief claim, so the Treasury’s modelling does not take into account family farms that have used a BPR-only claim, tenant farmers who use BPR, and the many rural family businesses that will also use BPR. Will the Minister please take this opportunity to look at this again, before his Government wreck the countryside?

[James Murray]

As I set out earlier, the need to reform business property relief is as strong as the need to reform agricultural property relief, in order to have stable public finances and a fair and sustainable tax system. As I set out, 40% of APR goes to the top 7% of estates, and 50% of BPR goes to the top 4% of estates. Given the fiscal context that we inherited, that kind of unfairness is not sustainable. When balancing the books, we need to develop the tax system in a way that is sustainable and gives us the economic stability that we desperately need after the mess that the previous Government left us.

Finance Bill

Charlie Dewhirst Excerpts

Committee of the whole House
Wednesday 11th December 2024 Commons Chamber

[James Wild]

Absolutely. My hon. Friend makes the point very well. The knock-on impact and the damage to those children’s education will be considerable.

More than 40% of independent schools are small schools. They are at the heart of their local communities. They do not have big endowments. They operate on wafer-thin margins and simply cannot absorb changes of this magnitude, so it is likely that those schools will cut bursary places that exist due to this new tax that puts their viability at risk.

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

On SEND funding, the East Riding of Yorkshire is the lowest funded local authority for SEND per pupil. Children in the Prime Minister’s constituency get three times more funding than children in mine, which is a travesty in itself. This policy will put even more strain on my local authority and the children who desperately need support from it.

[James Wild]

Absolutely; I completely agree with my hon. Friend. The Government hide behind the cloak of saying, “If you have an EHCP, everything is okay,” but 100,000 children in schools across our country will be impacted.

The next area we are concerned about is faith schools, which tend to be smaller and charge lower fees. The Independent Schools Council has warned that

“Low-cost faith schools will be faced with deficit and closure, communities will lose vital assets”.

There are small religious groups that do not have any state sector provision that can meet their needs as a denomination. Religious groups are mounting legal challenges as a result, battling for the right to educate their children and battling for the right to choose, which we on the Conservative Benches certainly support.

New clause 8(3) refers to the music and dance scheme, which provides grants to talented young people who could not otherwise attend world-class institutions such as the Royal Ballet school. We welcome the Government’s decision, under pressure, to delay taxing schools in this scheme until September next year, but that exemption should be made permanent.

To return to one of the points that has been made, in the Budget statement the Chancellor said:

“94% of children in the UK attend state schools. To provide the highest-quality support and teaching that they deserve, we will introduce VAT on private school fees”.—[Official Report, 30 October 2024; Vol. 755, c. 821.]

That is a deliberately divisive approach. The Opposition support 100% of pupils. We care about all children. We simply believe that parents should be able to choose.

We have consistently raised the situation of military families, to which the Minister referred, and argued that they should be exempt from this tax. The Government did not agree to that, but in response to our campaign they said:

“We will uprate the continuity of education allowance to reflect the increase in school fees from January.”—[Official Report, 18 November 2024; Vol. 757, c. 3.]

Well, the new continuity of education allowances have been announced and, as my hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst) pointed out, they fall short of protecting service families from the changes. That will have a direct impact on the retention and recruitment of our armed forces. There are 4,200 children who benefit. The allowance is in place to meet the needs of the armed forces when they have to move around the country or serve overseas and boarding schools or other provision is the only available option. Given the importance of this allowance for the retention of military personnel, why have the Government not met the commitment that they made to our armed forces?

Farming and Inheritance Tax

Charlie Dewhirst Excerpts

Wednesday 4th December 2024 Commons Chamber

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

I share the frustration of my right hon. Friend shadow Secretary of State that the Secretary of State for Environment, Food and Rural Affairs cannot be with us today. I wanted to offer him some sympathy, because I do not believe that either he or the farming Minister cooked up this terrible plan. It was thrust on them by the Treasury because, as has been said before, the Treasury knows the price of everything and the value of nothing. It clearly does not know the value of a family farm or the value of our farmers to this country.

The purpose of this policy, as was outlined by the Chancellor in her Budget statement, is to stop wealthy individuals avoiding inheritance tax, but to protect family farms. As my right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) said, the CLA has highlighted that the average 300-acre arable farm owned by a couple would have to spend 99% of its yearly profit over a decade to afford an inheritance tax bill. More starkly, a single farmer with 200 acres would have to pay 136% of their yearly profit to cover the bill. Clearly, that is unaffordable.

A real-life example was sent to me by a constituent. He is a farmer whose elderly father is still alive but no longer works, and whose son is at a local agricultural college and hopes one day to follow in his footsteps. Such an inheritance tax bill makes his farm unviable and puts his son’s future in doubt. His father is distraught. He said to his wife that morning, “What is the point of even going to work?”

[Mr James Cleverly (Braintree) (Con)]

I have had correspondence from an agricultural accountant in my constituency who says that, since the Budget, his job has changed from being an accountant to being a counsellor as more and more farmers contact him with serious concerns about their mental health, because of the fear that has been introduced by this policy and the fact that their children are now telling them that they do not want to go into the family farm.

[Charlie Dewhirst]

My right hon. Friend is absolutely correct. Farming is a lonely existence at times, and farmers have traditionally suffered from mental health difficulties. This policy is making things far worse, and for small family farms it really is devastating.

As others in the House have said, tenants have not been taken into account in any of this. The impact of business property relief is far greater than any of us have discussed so far, because it does not just relate to farms. It relates to any unquoted business, which could be a local haulier, an abattoir or a feed merchant. All of these—the tapestry of our agricultural economy—are impacted by these measures. It really is a devastating attack on our way of life.

If we take the Treasury’s figures, which show that £500 million will be taken each year by these taxes, that is £500 million that will no longer be spent in the rural economy. For example, a farmer who wants to expand his livestock herd needs to build a new shed, and that means paying a planning consultant, a construction firm, a mechanic and an electrician. It means a greater feed bill for his new livestock, and he has to buy the livestock. All of those things are part of the wider economy. It is not just the farmers who will be hit by this policy; it is everyone in rural communities.

The Secretary of State told us at the Environment, Food and Rural Affairs Committee that it will all be fine because farms, under his tutelage, will become more profitable. The only way to make farms profitable that quickly is by greatly increasing food prices. If we are to go down the route of food inflation and of inflation more widely, then fine, but the Government are going to have to explain that to consumers in the supermarket.

[Greg Smith]

Does my hon. Friend agree that, as part of Labour Members’ total failure to understand the countryside, they probably do not get that farmers are one of the very few sectors that have to buy retail but sell wholesale?

[Charlie Dewhirst]

My hon. Friend is absolutely correct. Farmers are of course price takers, not price setters, and they have always been under great pressure from the retail chain to keep their prices to a minimum, so that we can all enjoy cheaper food. That is a fact of life, and a very difficult challenge.

[Helena Dollimore]

My colleague on the Select Committee has great expertise on the farming industry. He will therefore know that, for the last 14 years, the record of his party in government has been one of failure for our farming industry, with 12,000 farms closing since 2010 and energy bills skyrocketing because the Conservative party failed to invest in energy independence, hitting our farmers and reducing profitability.

[Charlie Dewhirst]

We are going to have to agree to disagree on that point.

Frankly, this is a policy dreamt up by the Treasury on a spreadsheet. There has been no impact assessment, and there is no understanding of its impact on rural communities. This is not just an assault on farmers; it is an attack on the entire agricultural economy. The end result will be less British food, reduced British food security and fewer British jobs. Will the Minister please give our farmers some hope this Christmas, and look at this again?