Farming and Inheritance Tax

Dave Doogan Excerpts

Wednesday 4th December 2024 Commons Chamber

[James Murray]

I will not try your patience, Madam Deputy Speaker, but I feel that my hon. Friend’s intervention relates to the debate in hand, as we have had to take a tough decision on taxation policy in order to fund our public services. Those public services are, of course, enjoyed by people across the country, including farmers and those in rural communities.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

Will the Minister give way on that point?

[James Murray]

I will make some progress.

As I was saying, we could not justify leaving the situation unchanged, with a full, unlimited tax relief benefiting a very small number of estates by a very significant amount, given that there is such an urgent need to repair the public finances and to improve the hospitals, schools and roads on which people across the country depend, including those in rural communities.

--- Later in debate ---

[Katie Lam (Weald of Kent) (Con)]

The Government have made many claims about this policy that are not credible, but I wish to address only four.

First, they outrageously claimed that they would not do it. The Secretary of State, the right hon. Member for Streatham and Croydon North (Steve Reed), said last year:

“We have no intention of changing APR.”

He said that given the situation that farmers are in, a Government cannot possibly go to people and demand more taxes. I am sorry he is not here today to hear his own words.

Secondly, the Government claim the change is unavoidable as they desperately need the £500 million they claim that it will raise. The £500 million that they give to farms overseas and the £9 billion that they were all too happy to hand over to public sector unions says otherwise.

Thirdly, the Government claim that these people are rich. That completely misunderstands agriculture and the countryside. A farm is not an asset on a balance sheet. Our farmers are stewards of their land, holding it for the next generation and the generation after that. It is not the fault of farmers—especially those in places such as my constituency in Kent, with its astronomical house prices—that their land is so valuable in a way that does not at all reflect their farm’s profitability.

[Dave Doogan]

Is the hon. Member, like me, slightly irate when she hears UK Government Ministers talking about how the terms of the proposed agricultural property relief are much more favourable than the rate that other people have to pay? Inheriting the family farm is not like inheriting your mother’s house. You do not liquidate the asset and then live the high life; you just get on with the job that you were doing the day before and the day before that. There is no enrichment involved, making the Government’s policy utterly baseless.

[Katie Lam]

I could not agree more with the hon. Gentleman. My farmers tell me that these inheritance tax bills will take decades of profit to pay off, so they will keep doing the job that they were doing yesterday, but with a fraction of the cash that they had before—which was not a lot to begin with.

Finally, I want to address the idea that farmers can simply give farms away and live another seven years. It is incredible that the Government should introduce a tax in one breath and encourage people to avoid it in the next, and it makes a mockery of the whole policy. If it is true, then the tax will not raise any money for the Government, but instead increase bureaucracy and advisory fees for farmers. Mostly, though, for many people, it is not an option or it will not work. People have not been given enough time to plan for these changes. My constituent Ross grows hops in Tenterden. As he watched the Budget, his father, who is in his 70s, was suffering from sepsis and fighting for his life in hospital.

Especially in farming, our most dangerous industry, people cannot guarantee that they will live another seven years after having handed over the farm. Another of my constituents is in remission, having recently recovered from cancer. If the cancer returns, it is likely to be terminal. This constituent is in their early 50s. Are the Government seriously suggesting that my constituent should hand over, not just the farm, but the home that they live in to their teenage children?

Many of my farmers live in their farmhouses and are planning to work the rest of their days. They do not have pensions; they do not have plans that would allow them to spend the last decade of their lives—of course, it may be much more—no longer farming the land that they have farmed for the whole of their lives up until this point. Finally, to raise a point that seems to have been almost entirely ignored, doing this will incur eye-watering capital gains tax bills. For some of my farmers, it will mean hundreds of years’ worth of land revaluation that they similarly cannot afford to pay.