Farming and Inheritance Tax

Debate between Charlie Dewhirst and James Cleverly

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.