Agricultural and Business Property Reliefs: OBR Costing

Chi Onwurah Excerpts

Thursday 23rd January 2025 Commons Chamber

[James Murray]

I think there may be some confusion on the Conservative Benches about what the OBR data shows. The data published by the OBR yesterday refers to exactly the same costing as was published at Budget. It sets out the approach to modelling and the costing, which is typical and in line with other tax policies. Indeed, the OBR’s statement makes it clear that:

“The OBR’s role is to provide independent scrutiny and certification of whether the Government’s policy costings are reasonable and central.”

That is exactly what the OBR has done in publishing the extra information, which shows the modelling behind the data that was published at the time of the Budget.

The shadow Secretary of State asked about the data. The data on the number of affected estates claiming APR and, indeed, APR/BPR—some 530 is the upper estimate—is in table 1.1 of the OBR document published yesterday. That is consistent with what we have been saying for many months since the Budget. I think Opposition Members are confusing the value of farms with the value of claims under inheritance tax. The only way to truly understand the impact of changes to inheritance tax policy on inheritance tax claims is to look at the claims data itself.

We are working in partnership with the large supermarket chains to make sure they are driving economic growth. We are very clear that some of the decisions we had to take in the Budget were difficult decisions that will have consequences, but we are determined to work with businesses across the country to drive economic growth, which is the No. 1 mission of this Government.

[Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

The people of Newcastle upon Tyne Central and West love the local produce provided by local farmers in our fantastic markets, such as Grainger market, and they enjoy the beautiful countryside of Northumberland, which has been shaped by generations of sustainable farming. However, we cannot help but be aware that most of that land is owned by, for example, the Duke of Northumberland, big landowners and those seeking to minimise their tax exposure, so does the Minister agree that, by keeping this loophole open for so long, the country has pushed up land prices and pushed out the next generation of young farmers?

[James Murray]

There certainly is evidence that the current inheritance tax system has caused people to use these reliefs for tax planning and to avoid inheritance tax bills. My hon. Friend alludes to the broader question of the fairness and sustainability of this measure. As I mentioned earlier, 40% of agricultural property relief benefits the top 7% of estates, and 50% of business property relief benefits the top 4% of estates. The Leader of the Opposition has said that she thinks this is a good way to prioritise public money, but we think it is neither fair nor sustainable.