Farming and Inheritance Tax

Greg Smith Excerpts

Wednesday 4th December 2024 Commons Chamber

[Greg Smith (Mid Buckinghamshire) (Con)]

At Treasury questions yesterday, I raised with the hon. Gentleman the case of Upper Peppershill farm in Long Crendon, a small 380-acre arable farm in my constituency, which the shadow Secretary of State and the Leader of the Opposition visited a few weeks ago. The family have calculated that if they borrow the money to pay this new tax, it will take them 40 years to pay it back. What does the Minister say to the Seed family in Long Crendon about the tax bill they face?

[James Murray]

It is not appropriate for me, as a Minister, to give specific tax advice to one family, but I will talk about the general principles behind our reform. In fact, I was about to begin setting out some of the detail of our policy.

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[Tim Farron (Westmorland and Lonsdale) (LD)]

It is my utter privilege to speak on behalf of my party and 1,500 farmers in Westmorland and Lonsdale. I represent people all the way from the Yorkshire dales and the North Pennines to the Lake District and the Cartmel peninsula.

We are proud of our farmers not just because they feed us and care for our environment, but because they are the stewards of our heritage. When UNESCO awarded the Lake District world heritage site status, it gave as much credit to the farmers as it did to the glaciers that formed the landscape in which we live, which drives a tourism economy with more than 20 million visitors a year. We seriously value our farmers, and they need to hear that, because the tone of the debate—not just today, but over the last few months—has suggested that politicians do not value farmers. However, words are cheap.

[Greg Smith]

I have no doubt about the hon. Gentleman’s personal commitment, but do not the Liberal Democrats have a credibility problem? For all the rhetoric in this Chamber and outside, when they actually get their hands on power in local government, such as in Oxfordshire, they brutally attack their farmers by banning all meat and dairy?

[Tim Farron]

That is nonsense. Wherever Liberal Democrats are in control, we back and support our farmers and are proud to do so.

Talk is cheap, and most people in this House will at some time quite rightly have uttered the sentiment that British farmers are the best in the world, without actually understanding why. It is true that they really are the best in the world, and that is because the way in which our farming economy is structured is based on the family farm. Family farming makes a difference because it has close husbandry, higher environmental standards, higher welfare standards and better quality produce. It is not an accident that British farming is the best in the world.

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[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.

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[Callum Anderson]

I would be happy to were there not too little time. These investments are about more than money. They represent a vision for a resilient and sustainable future. On the inheritance tax point, the Government’s approach is balanced and fair.

[Greg Smith]

Will the hon. Member give way?

[Callum Anderson]

I will not on this occasion. Just last night, the former Conservative Chancellor Lord Clarke agreed with our approach, saying that he was team Chancellor. He said it was

“a strange exemption…which is why so many rich people buy agricultural land”.

He is not wrong. As others have said, in 2021-22, the top 7% of wealthiest claimants accounted for 40% of the total value of APR, at a cost of £219 million to the taxpayer, as my hon. Friend the Member for Rugby (John Slinger) said. The majority of claimants will not be affected. Couples inheriting farms can still pass up to £3 million tax-free, and any additional assets will be taxed at half the standard rate, with payments spread over 10 years.

This Government are delivering a new deal—a square deal—for farmers, including measures to ensure that British produce is prioritised in Government procurement, that farmers are not undercut by low-welfare imports and that energy costs are reduced through innovative solutions. Our farmers deserve a Government who listen, support and invest in them, and this Government are committed to doing just that.

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[Joe Morris]

I thank the hon. Member for her intervention. She and I must have a slightly different view of a very long time. A few weeks ago is not a very long time for me. I am talking about years in which local farming communities were ignored.

The botched Brexit deal that the Conservative party secured did not do any farmer any favours. Labour is the only party that is genuinely serious about countryside renewal. We cannot pack communities across Northumberland in aspic and pretend that they do not need houses or services. That is why the Conservatives lost. That is why I am here.

[Greg Smith]

Will the hon. Member give way?

[Joe Morris]

I have taken plenty of interventions in a short time.

Ultimately, the Government will be judged on the success of our record and whether we can get the farming budget into the pockets of farmers. I have every faith that the Government and DEFRA will do that. I do not believe that the Conservative party could honestly say that it ever trusted its DEFRA Ministers to do the same.

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[Sam Rushworth]

I will not take any interventions, but only because other colleagues want to get in.

There are concerns, but I must say that when I met farmers in my constituency recently, they agreed with me that a bigger concern for them, as many colleagues have said, is profitability. The motion could have talked about economic stability for lower inflation and interest rates, and it could have talked about cutting rural crime, which would also cut insurance premiums. If I may say so, I welcome the Equipment Theft (Prevention) Act 2023 from the hon. Member for Mid Buckinghamshire (Greg Smith), but there needs to be secondary legislation.

[Greg Smith]

I agree.

[Sam Rushworth]

Thank you. Let us work together.

I am pleased that the Government are defending against floods and disease. I am pleased that we are committed to protecting standards in trade deals. I am pleased that we are committed to getting a veterinary agreement with the EU to cut red tape. I am pleased with the public sector procurement targets. However, we need to do something on rules about food labelling in order to prevent “farmwashing.” We also need to do more to strengthen farmers’ bargaining power with supermarkets. I am pleased with the changes to planning laws that will allow a lot of farmers to invest.

I would just say to my own party and to the Government that we need to bring these forward faster. Farming in my constituency is on life support. There is, in fact, good will towards this Government and what we are trying to do, but we cannot afford to wait another 18 months, particularly for the basic payment scheme transition. We need upland farmers to be able to access the sustainable farming incentives. I know the SFIs are in the pipeline, but they cannot wait 18 months to receive them.

Oral Answers to Questions

Greg Smith Excerpts

Tuesday 3rd December 2024 Commons Chamber

[Mr Speaker]

Order. [Interruption.] No, we are going to have a little talk now, because this is not fair; I have to get all these other Members in. I understand that these are set questions, but questions and answers should be short—it works both ways—otherwise I cannot get Members in and it makes my job impossible. Please work with me.

[Greg Smith (Mid Buckinghamshire) (Con)]

The owners of a 380-acre farm in my constituency have worked out that they would have to spend 40 years paying back the money that they would have to borrow because of the changes to agricultural property relief. When will the Chancellor start listening to farmers rather than hiding behind Treasury figures?

[James Murray]

We are taking an approach that balances significant tax relief for family farms with the need to fix the public finances in as fair a way as possible. The hon. Gentleman will have seen the data that the Treasury has put out, based on claims data from His Majesty’s Revenue and Customs. It shows how few farms will in fact be affected. The measures are a fair and balanced way to fix the public finances, which we desperately needed to do given our inheritance from the Conservative Government.

Oral Answers to Questions

Greg Smith Excerpts

Tuesday 29th October 2024 Commons Chamber

[Emma Reynolds]

The Chancellor launched the landmark pensions review in July, which I am leading and which is looking at measures to drive more UK pension investment into the UK economy, boosting growth but also improving pension savers’ outcomes. I know that there is interest in this agenda across the House.

[Greg Smith (Mid Buckinghamshire) (Con)]

Countryside Alliance research shows that rural households spend up to £800 a year more on fuel than urban households, so further to the question from my hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti), will the Chancellor protect rural communities in the Budget tomorrow?

[Emma Reynolds]

The hon. Gentleman is urging me to comment on the Budget, but he will have to wait until tomorrow.

Oral Answers to Questions

Greg Smith Excerpts

Tuesday 3rd September 2024 Commons Chamber

[Rachel Reeves]

Yes, absolutely; pension credit can be backdated by up to three months, and we will ensure that that happens. We are also working closely with Liverpool city council to ensure that the constituents in Liverpool Wavertree, and indeed in all our constituencies, are getting the support that they entitled to. The poorest pensioners, who are entitled to pension credit, should get it. It is a travesty that 800,000 missed out under the last Conservative Government. We will ensure that pensioners entitled to support get it.

[Greg Smith (Mid Buckinghamshire) (Con)]

T2. It is estimated that the Bank of England will require a further £110 billion of taxpayer subsidy to cover long bond sale losses through to 2030. So why is the Chancellor clobbering pensioners to save £1.5 billion a year when she could be challenging the Bank of England to save tens of billions of pounds a year?

[Rachel Reeves]

Before I became a Member of Parliament I was an economist at the Bank of England and I respect the independence of the Bank of England. The previous Government undermined that independence. That contributed to the economic chaos that we saw under the last Conservative Government. This Government will never go down that route.

Public Spending: Inheritance

Greg Smith Excerpts

Monday 29th July 2024 Commons Chamber

[Rachel Reeves]

I do not believe that any member of the previous Cabinet could not have been aware of the scale of this cover-up and the scale of the overspending. They should hang their heads in shame. Instead of coming to this Chamber today and issuing platitudes, they should have done the right thing and apologised to the country.

[Greg Smith (Mid Buckinghamshire) (Con)]

The Chancellor has made two key political decisions this afternoon: one, to fund extraordinarily high public sector pay increases; and two, to clobber pensioners to pay for it. Will she explain to the House and every pensioner who will lose their winter fuel allowance in the process why she did not challenge the Bank of England on the taxpayer bailouts that it requires, to the tune of tens of billions of pounds, to cover its losses from bond sales?

[Rachel Reeves]

First, it is an extraordinary omission that the previous Government did not set affordability criteria for the independent pay review bodies, which meant that they were able to come back with these recommendations. It would be almost without precedent not to accept recommendations from an independent pay review body. If the hon. Gentleman wants to go to the doctors, nurses, teachers, police officers and those in the armed forces in his constituency and say that they do not deserve a pay increase in line with private sector wages, that is up to him, but I believe that those public sector workers deserve those pay increases.

On pensions and the winter fuel payment, this is not the decision I wanted to make and it is not the decision I expected to make, but we have to make in-year savings, which is incredibly difficult to do. Without doing that, we would put our public finances at risk. We are ensuring that everybody who is entitled to pension credit—the poorest pensioners—continue to get the winter fuel payment, and we will work with the Department for Work and Pensions, local authorities and charities to boost the take-up of pension credit.

Oral Answers to Questions

Greg Smith Excerpts

Tuesday 7th May 2024 Commons Chamber

[Laura Trott]

As ever, my right hon. Friend is absolutely right.

[Greg Smith (Buckingham) (Con)]

In the past financial year, Buckinghamshire Council supported 4,186 people struggling with the cost of living through the £4.8 million of funding from the household support fund. The council’s Helping Hand scheme continues, with £2.4 million of funding through to this September. Does my right hon. Friend agree that Buckinghamshire households who are struggling with the cost of living should get in touch with Buckinghamshire Council to get the help and support that they need from the Helping Hand scheme, which is funded by this Government?

[Laura Trott]

My hon. Friend is completely correct. The household support fund has done so much to help people struggling with the cost of living. I commend the way that Buckinghamshire Council has handed out the money, and, indeed, will continue to do so throughout the year.

Oral Answers to Questions

Greg Smith Excerpts

Tuesday 6th February 2024 Commons Chamber

[Jeremy Hunt]

I will always look at anything that helps businesses to grow and expand. I set up and ran my own business for 14 years. Can I gently say to the hon. Lady that it is slightly incongruous to argue for lower taxes when the SNP has given Scotland the highest taxes in the United Kingdom?

[Greg Smith (Buckingham) (Con)]

4. If he will make an assessment of the potential impact of the loan charge on levels of bankruptcy.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

I have heard the concerns expressed by hon. Members on the impact of the loan charge, and I have pushed His Majesty’s Revenue and Customs for firm assurances on the safeguards that it has in place. No one will be forced by HMRC to sell their main home or access their pension funds early to pay their loan charge debts, nor has HMRC petitioned for bankruptcy, which would be only a last resort and is in nobody’s interest. There is substantial support in place to help people in debt, including agreeing time-to-pay arrangements with them.

[Greg Smith]

I am grateful to my hon. Friend for that answer and his engagement with the loan charge and taxpayer fairness all-party parliamentary group, including a meeting this evening with its officers. In an internal document that surfaced as part of the 2019 Morse review, HMRC admitted to around 100 bankruptcies from the loan charge. Can the Minister tell the House why that figure has never been given publicly by HMRC, and what the figure is today?

[Nigel Huddleston]

Again, I thank my hon. Friend for championing this area and his great concern for the human stories behind the difficult circumstances resulting from some of these schemes. As I have said, I am constantly seeking reassurance from HMRC on this matter, and my understanding is that where bankruptcies have occurred, it has often been because of requirements outside of the loan charge, not from HMRC; indeed, some people have declared bankruptcy of their own volition. However, if my hon. Friend has evidence to the contrary, I would like to know about it.

Loan Charge

Greg Smith Excerpts

Thursday 18th January 2024 Commons Chamber

[Greg Smith (Buckingham) (Con)]

I will do my best, Madam Deputy Speaker. I congratulate the right hon. Member for East Antrim (Sammy Wilson) not only on securing the debate but on the incredibly powerful and eloquent way in which he opened it—I entirely endorse his speech.

Indeed, alongside the right hon. Gentleman and the noble Baroness Kramer, I serve as co-chair of the all-party parliamentary group on the loan charge and taxpayer fairness. It is through that lens, and given the many constituents of mine who are victims of the loan charge, that I have become profoundly troubled by what I can only describe as one of the most significant crises faced by British taxpayers, certainly in my living memory.

The loan charge has haunted, and is still haunting, thousands of our constituents throughout the country, bringing with it a train of despair and destruction that should weigh heavily on HMRC and all of us in this House. To date, an estimated 60,000 people have been affected by the loan charge. Tragically, as has already been said, 10 of those people have come to the tragic conclusion of ending their own lives. I invite the House to reflect on a retrospective HMRC tax policy that has led to 10 people—I pray no more—ending their lives.

Those are not numbers on a page; they are human tragedies. Each one is a poignant reminder of the injustices felt by individuals who are still grappling with the devastating consequences of the amount of money asked of them—in some cases, more than they earned in the first place—as the right hon. Gentleman mentioned. The profound impact of the loan charge extends its reach far beyond mere statistics and financial repercussions. It is a devastating narrative that encompasses contractors, freelancers and agency workers from all walks of life. Those professionals, seeking compliance under IR35 legislation, took and followed professional guidance in good faith.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

On the point about taking advice and being led by agencies and promoters, does the hon. Member agree that it is simply scandalous that none of those agencies has been pursued by HMRC for their part in this, and that that further heightens the injustice felt by those who are being pursued?

[Greg Smith]

That is a point on which we have consensus. It is outrageous that promoters have not been pursued. The all-party parliamentary group has considered and taken evidence on that, and I will certainly continue to push that point in this debate and for the weeks, months and years ahead, in trying to get justice for all the victims of the loan charge and holding to account those who gave that advice, who, I suggest, knew what they were doing.

[Dean Russell (Watford) (Con)]

I thank my hon. Friend for giving way and the right hon. Member for East Antrim (Sammy Wilson) for securing the debate. Does my hon. Friend agree that protecting the coffers of the state should never take precedence over protecting the lives of our constituents?

[Greg Smith]

My hon. Friend makes an incredibly powerful point with which I entirely agree. Part of the ask of this debate and of the all-party parliamentary group on the loan charge and taxpayer fairness is a fair settlement that people can actually afford to pay; that takes into account—dare I say it—reality; and that understands what people actually earn and that they acted in good faith and took the professional advice that I mentioned a few moments ago.

[Wera Hobhouse]

Will the hon. Gentleman give way?

[Greg Smith]

One more time.

[Wera Hobhouse]

The hon. Gentleman is being generous. Is it not the case that what we need is proper transparency in how Government bodies operate? When so many people see these problems again and again, that really undermines trust in Government.

[Greg Smith]

I agree with the hon. Lady. Of course we need transparency across all walks of life—Government or otherwise. The right hon. Member for East Antrim referred to the Horizon scandal and the Post Office. There is a clear similarity, and there needs to be an inquiry and serious action. How can a body of the state—the Post Office in the case of the Horizon scandal, and HMRC in the case of the loan charge scandal—be autonomous in being judge, jury and executioner at the same time? We simply have to take that away. Checks and balances must be built into HMRC if we are to see justice for the loan charge victims, as well as for victims of any other scandal that might well come about.

I could say much more on this subject, but I am mindful of the time limit that you have set, Madam Deputy Speaker. I am incredibly grateful to my hon. Friend the Minister for his letter yesterday offering a meeting with the all-party parliamentary group. I hope that we can get that meeting in the diary as soon as humanly possible so that we can have meaningful dialogue on how to get to a settlement, a review of HMRC practices and justice for the loan charge victims. Given the colleagues whom I have seen bobbing, particularly from the Conservative Benches, I suspect that we will hear many more powerful stories and testimonies from victims of the loan charge, whose lives we should see as totally valuable and deserving of our attention and of justice.

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[Greg Smith]

My right hon. Friend’s powers of forensic analysis are second to none, but does he agree that it is actually slightly worse than that? He is entirely right in what he says, but there are also cases, particularly for those affected by the loan charge, where people have allowed themselves, against their better instincts and judgment, to make a false confession of guilt. They have gone through the process and ended up having to pay an extortionate amount of money and think the matter settled; then, HMRC has come back and gone after even more.

[Sir David Davis]

Yes, my hon. Friend is right. I am afraid that one of the characteristics of miscarriages of justice—I have forgotten who raised this point earlier, so please forgive me for not referencing them—is that the victim at the beginning is probably the most unpopular person in society. They are thought to be guilty and may even doubt themselves over whether they have made a mistake. These people, by and large, have been compelled to do what we are talking about. They have been offered a job on these terms only, so they have had no choice, but then they think, “Well, maybe I should have known.” Then, like the sub-postmasters, they are persuaded by the people dealing with them that they are the only one.

Until our campaign started, all these people felt that they were the only one, or one of a few nasty tax evaders—not tax avoiders—so they gave in. Of course, it is like the Gestapo: confession never saves you; it is a step to execution. That is how it works, I am afraid. That is true of all big organisations full of people who are well-intentioned, but who defend the institution. That is why, answering my right hon. Friend the Member for North East Somerset, it goes on through Government after Government after Government. It is not the Ministers who do this, but the members of the institution.

Oral Answers to Questions

Greg Smith Excerpts

Tuesday 19th December 2023 Commons Chamber

[Laura Trott]

If the hon. Gentleman can give individual examples, I ask him please to let us know. It is, obviously, extremely important that we enforce this, but I should point out that we will increase the levels by 9.8% next year, which will make a significant difference to households up and down the country.

[Greg Smith (Buckingham) (Con)]

Is not the more fundamental problem with the question posed by Opposition Members the fact that the OBR’s forecasts are never right?

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[Jeremy Hunt]

If the hon. Gentleman has any evidence of people behaving improperly or illegally, he should tell the police, and he will get the full support of this Government and the whole House in bringing the matter to justice. But let me just say to him that any responsible Opposition should understand that in a crisis there is a trade-off between speed and taking longer to prevent fraud, and we took the right decision to save as many lives as possible.

[Greg Smith (Buckingham) (Con)]

T3.   I am hearing from a concerning number of small businesses in my constituency that they are slowing down as they approach the VAT threshold, rather than doing what the whole economy needs them to do and going for growth. Ahead of the spring Budget, will my right hon. Friend look at substantially shifting the VAT threshold upwards?

[The Financial Secretary to the Treasury (Nigel Huddleston)]

My hon. Friend is a great advocate for small businesses. The Government recognise that accounting for VAT can be a burden on businesses, but that is why, at £85,000, the UK has a higher VAT registration threshold than any EU member state and the second highest in the OECD, keeping the majority of UK businesses out of VAT altogether. In the 2022 autumn statement, it was announced that the VAT threshold would be maintained at its current level until 31 March 2026. As always, the Government keep taxes under review.

Autumn Statement

Greg Smith Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Jeremy Hunt]

I am happy to discuss that matter with the Secretary of State for Work and Pensions. I recognise that the hon. Lady has campaigned on the issue sincerely for some time. I will say, though, that the decision to increase local housing allowance to the 30th percentile will help 1.6 million families with an extra £800. I hope she recognises that that will make a difference.

[Greg Smith (Buckingham) (Con)]

From tax cuts for 27 million workers to incentives for business to grow, support for pensioners and a continued lifeline for our great British pubs and pints, I warmly welcome the good start that my right hon. Friend has made on reducing the tax burden as we recover from the pandemic and the energy shock. I thank him in particular for the recognition he has shown to the self-employed, not just by reforming class 2 and class 4 national insurance contributions to make them fairer, but by sending the signal that, just as the self-employed were an integral part of our recovery from the time the Labour party crashed the economy when they were last in government, we now need as many people as possible to take the step to start their own enterprise and help this country grow.

[Jeremy Hunt]

I could not agree more with my hon. Friend. The whole purpose of our approach is to make it easier for people who are prepared to take risks to work hard, and no one exemplifies those values better than the self-employed. I thank him for being one of this country’s greatest defenders of the great British pint.