Inheritance Tax Relief: Farms

David Mundell Excerpts

Monday 10th February 2025 Westminster Hall

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

It is a great pleasure to serve under your chairmanship, Sir Edward. Having participated in the previous debate on the subject in the main Chamber, I welcome the different tone from Government Back Benchers. They will get much further with their constituents by reflecting their concerns than by reading out Whips’ points in these debates.

One issue that I want to highlight, because it goes against some suggestions that have been made in relation to so-called land banking, is that when agricultural land is currently sold in my constituency, it is acquired by private equity firms that want to go down the route of industrial tree planting or solar farm production. If we require farms to be sold to meet inheritance tax demands, they will not be sold to new family farmers or new entrants; they will be sold to private equity firms that want not to produce food on our land, but to maximise tax benefits such as carbon offset and other environmental tax benefits. In addition, they do not employ anyone within the constituency—there is no ongoing employment.

Farming does not just produce food and create generational and environmental benefits; it is at the heart of the economy. I have seen that directly: to counter the 2001 foot and mouth outbreak in my constituency, virtually every hoofed animal was destroyed. When farming closed down, the economy closed down. Everybody in the constituency lost out. People were not in the shops, were not buying cars and were not using other businesses. Farming is not just about all the things we have heard about today; it is right at the heart of the economy.

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

Changes to inheritance tax can be made that will prevent people from gaming the system and buying up land to avoid tax. That can be done without an impact on existing farming businesses. Does the right hon. Gentleman agree that for the Government not to have even considered such changes in their previous responses is not only unacceptable, but a dereliction when it comes to food security and national security?

[David Mundell]

What will be unacceptable is if the Minister stands up at the end of this debate and gives the same response that he has given in previous debates, having heard the points that his own colleagues have put forward about how damaging and ill thought through this policy proposal has been. I am looking for a change in tone not just from Government Back Benchers, but from the Minister.

[Esther McVey (Tatton) (Con)]

Does my right hon. Friend agree that the Labour leadership is in serious jeopardy of stubbornly painting itself into a corner, when what is needed is pragmatism and for the Labour leadership to listen to the farmers, the public and its own Back Benchers? For today’s debate to mean anything, for Labour Back Benchers to mean anything and for their words not to be cheap, it is time for the leadership to actually listen and find a way to graciously stop this farm food tax.

[David Mundell]

I absolutely agree. Labour MPs have listened to their constituents—that is being reflected back to us today—and now we need the Minister to listen to Labour MPs.

The other point that I want to get on the record is the point made by the right hon. Member for Orkney and Shetland (Mr Carmichael), the Chairman of the Environment, Food and Rural Affairs Committee, about the specific issue of tenanted farming holdings in Scotland. For tenanted farmers to raise the funds required, they would have to give up their whole holding. They might not even be able to. That has clearly not been thought through as part of this exercise.

What people outside want is a debate that changes policy. They want a debate that shows that the Government are listening, have heard what they have to say and will do something about it. I hope that that will be evident in the Minister’s contribution at the end.

Oral Answers to Questions

David Mundell Excerpts

Tuesday 21st January 2025 Commons Chamber

[Darren Jones]

I thank my hon. Friend for raising that question on an issue that I know is deeply important to him, his constituents and his family, and on which he has worked for many years. The Government are actively considering proposals from the scheme’s trustees, and we will set out the next steps in due course. My hon. Friend the Minister for Industry in the Department for Business and Trade will be working on the detail, and I will be meeting her shortly to consider the options.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I have significant former mining areas in the Douglas valley and Upper Nithsdale in my constituency. Constituents there are concerned about the British Coal scheme, because many people in that scheme actually worked underground before being promoted into other jobs. To ensure fairness in the implementation of this Government policy, will the Minister make sure that the timescale on which they are compensated is the same as that for those in the other scheme?

[Darren Jones]

I thank the right hon. Member for his question, and I think “fairness” is the right word. That is why we worked in opposition to try to persuade the last Government to act on the mineworkers’ pension scheme, but we failed because the last Government did not think this was an urgent issue for them to consider. The Labour Government have implemented this change at our first Budget, and that is fairness in action. We will continue to work with trustees of the BCSSS, and we will come back with further options in due course.

Public Finances: Borrowing Costs

David Mundell Excerpts

Thursday 9th January 2025 Commons Chamber

[Darren Jones]

It might have been legitimate for the Conservatives to say that their economic policy was to borrow for day-to-day costs—as they did. That could be a decision that they took. What is not forgivable is the fact that they reached a point at which they were making promises to the British people that they knew they did not have the money to pay for, and that is where the £22 billion black hole came from. They should be ashamed of their record on the economy, and they should apologise to the British people.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

When will the Chief Secretary take responsibility for the actions of his own Government? We had a general election, and that is when the public held the previous Government to account. They gave their verdict, and the Labour party is in power now. What the public want is accountability for this Government’s reckless decisions: the national insurance increases are an attack on jobs; there has been an attack on the farming community; and business confidence is at an all-time low.

[Darren Jones]

The right hon. Gentleman may not wish to reflect on his party’s performance in government, but I am afraid he has to. Although this is a new Government—we have been in office for six months—the reality is that we are having to clear up the mess that the last Government left us. That is why we have to talk about it, and explain to the country why the actions taken by the Conservative party not only affected family finances, but decimated the British economy and pushed public services on to their knees. We are taking responsibility for clearing up their mess, and that is why we will keep talking about it.

Farming and Inheritance Tax

David Mundell Excerpts

Wednesday 4th December 2024 Commons Chamber

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I commend my near neighbour, the hon. Member for Penrith and Solway (Markus Campbell-Savours), on his brave contribution. It is hard to come to this Chamber and tell the truth when the pressure from the Whips and the party is to defend the Government at all costs. He made it absolutely clear that this measure will have a devastating effect on farms and the farming industry in his constituency if it goes through as currently set out.

The hon. Gentleman’s constituency and mine have something in common in that, in the 2001 foot and mouth outbreak, which devastated the farming industry, we saw for sure how important farming was to the whole community. Because farming was shut down, business was shut down. Shops were shut and lots of businesses including garages and all the services in rural areas could not function because farming was not functioning. That showed me the great importance that farming has.

Ironically, however, the outcome for my constituency of this measure from a Labour Government will be the further acquisition of land by private equity companies. This is because, thanks partly to the Scottish Government’s lifting of restrictions on land that can be afforested, good farming land in my constituency is under huge pressure from private equity funds buying it up to plant trees for carbon capture reliefs. It often seems that it is a great thing to plant trees and that we should all be in favour of it, but the reality is that these trees are Sitka spruce trees that are planted very close together. There is no light or environmental content within these forested areas. No creatures can survive in them. They are not environmentally friendly or sustainable, but they are financially attractive. They employ nobody. There is no employment once the forest has been planted.

When farmers come under pressure, as they will, to sell land to meet the inheritance tax, this is who the buyers will be. It will be these private equity firms, and if it is not them, it will in many instances be those who want to develop solar panels in a farming scenario, as other Members have highlighted.

[Tom Hayes]

Does the right hon. Gentleman agree that even the most ambitious estimates show we could cover only 1% of agricultural land with solar farms? Does he agree with Tom Bradshaw, the NFU’s president, who told journalists 85 days ago:

“What I do want to say is that an individual solar farm is not something which risks national food security”?

And does he agree with the CLA, which said in 2022:

“Solar is also a valuable diversification and cost reducing land use for farms—helping to shield exposure to volatile agricultural markets”?

[David Mundell]

No, I do not agree with the hon. Gentleman’s proposition. I do not think that viable prime agricultural land should be used for solar farms. I believe there is plenty of other brownfield land, or land that is not prime agricultural land, that could be used for solar farms. I am, therefore, not supportive of some of the huge developments proposed for my constituency.

I will now touch on one or two other points that have been raised but not expanded on. First, a lot of this discussion has been as if the sole structure of a family farm is mother, father, son and daughter. Brothers and sisters, or cousins, are often involved in the farming business, and it is quite wrong to suggest that some of the reliefs that can be applied would work in that situation. I have constituents who are in exactly that situation. A family farm is not just mum, dad, son and daughter. It is brothers, sisters, cousins and extended family.

The right hon. Member for Orkney and Shetland (Mr Carmichael) touched on tenant farmers. Tenant farmers in Scotland, in particular, are in a very difficult position because they cannot sell a couple of fields to pay their inheritance tax. They will have to give up the whole of their business, if they cannot find the money in other ways to pay these bills. We need to understand the issues that face tenant farmers.

I also commend the right hon. Gentleman’s suggestion that there should be a much wider debate about farming finance. The way to secure farming finance, and to secure our farmers, is not to destroy the family farm.

[Samantha Niblett (South Derbyshire) (Lab)]

I am quite astonished because, as we sat in a pub car park in the run-up to the general election, farmers in my constituency told me—I kid you not—that they know they do better under a Labour Government but they often vote Conservative. It feels like the Conservatives have taken their loyalty for granted. The right hon. Gentleman has been talking about how hard things are, and I agree with him. Farmers talk about their margins, and those margins are tight, but who caused them to be in that situation? We are now in a position of power—

[Madam Deputy Speaker (Judith Cummins)]

Order. I remind Members that interventions need to be interventions. They should be brief and ask a question that is relevant to the speech being made.

[David Mundell]

I do not know whether the hon. Member for South Derbyshire (Samantha Niblett) was here for the speech of the hon. Member for Penrith and Solway, but he set out exactly what happened to him as a Labour MP, having given farmers assurances about what Labour would do in government and the farmers finding that they had been betrayed. Now, the choice is not final, as he said, and hopefully this debate has shown the passion of both farmers and those who represent rural constituencies.

[Markus Campbell-Savours]

I am glad that the right hon. Gentleman enjoyed my speech. Did he enjoy the bit at the end where I listed the abject failures of his Government?

[David Mundell]

I liked the honesty of the hon. Gentleman’s speech in setting out how the Labour Government had let down his voters by going back on their undertakings in relation to the policy. They should listen to what has been said in today’s debate, to farmers and to the hon. Gentleman, and they should change the policy.