Farming and Inheritance Tax
Markus Campbell-Savours Excerpts(2 weeks, 4 days ago)
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Markus Campbell-Savours (Penrith and Solway) (Lab)
I must admit that, as a new Member and a novice when it comes to the fine details of parliamentary procedure, I am surprised that we are debating this issue in this way today. As the Opposition know, the agricultural property relief measures announced in the Budget were not included in the Budget vote last month. They also know that the measures will be included in a future Finance Bill alongside other measures that will be subject to the technical consultation in the new year. This decision is simply not being made today, despite the disingenuous social media posts that imply otherwise.
This detail matters to me, because I have spent the last few weeks speaking to farmers in Penrith and Solway to try to understand the full impact of the inheritance tax proposals, knowing that I have months left to engage with DEFRA and the Treasury and to seek important amendments. Let me be clear: if today was the real vote, I would vote against the Government’s plans. I am no rebel—I am a moderate—but during the election, I read what I thought were assurances from my party that we had no plans to introduce changes to APR. On that basis, I reassured farmers in my constituency that we would not, and now I simply am not prepared to break my word. I am told that there is no Labour MP in the country with as many farms as I have in Penrith and Solway, and I hope my colleagues will understand my feelings on this.
Today, however, we are debating a frankly irrelevant motion from the Conservatives. The motion fails to acknowledge how they failed to deliver for my farmers, how they failed to deliver on trade deals after Brexit, and how they set budgets for new rural payment schemes, but could not make the schemes accessible. They made manifesto commitments for the public sector to buy British that never materialised, and they failed to spend flood prevention money that is desperately needed by my farmers on the Solway plain. They failed to deliver reforms of inheritance tax rules that farmers know were being abused by non-farmers at their expense. I simply will not walk into a Lobby with people who talk a good game on farming but do not deliver. Their motion starts with the words, “That this House regrets”, yet 14 years of failure do not even get a whisper.
Madam Deputy Speaker (Ms Nusrat Ghani)
I listened to the Member’s speech very closely. Paragraph 20.13 of “Erskine May” states:
“Formerly, the House strictly observed a rule against anticipation”.
That was designed to restrict debate on a subject to the type of proceedings deemed to be the most effective. As the word “formerly” suggests, the rule is no longer strictly observed and has not been for many years. The principal provision in the Budget relating to agricultural property relief is not contained in the Finance Bill currently before the House, so the question of anticipation does not arise. In any case, I am firmly of the view that any absolute rule should not prevent Members, whether acting individually or as parties, from holding the Government to account. I hope that that satisfies the Member; it is not a point for him to respond to right now.
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.
Business Property Relief and Agricultural Property Relief
Markus Campbell-Savours Excerpts(2 months ago)
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Markus Campbell-Savours (Penrith and Solway) (Lab)
I might have this wrong, but I understand that the Tenant Farmers Association has suggested that there could be scope for reforming these taxes in a way that is of benefit to long-term tenancies. What is the hon. Member’s view on whether such reforms would be worthwhile?
Harriet Cross
I would obviously I have to see what the TFA suggested, but I think that we need to look at the agricultural sector as a whole. If land is being taken out of farming for any purpose, it is not going to be available for tenants, so if landowners are feeling compelled to sell their land because they have to cover an IHT bill, it does not matter what happens with reforms down the line; that land will not be available for tenants to access. I fully support the tenanted sector—it is a vital part of our farming sector—but, on its own, it will not be enough to keep land in production.
BPR is important for every family business the length and breadth of the country, and therefore in all of our constituencies. Family-owned businesses are the beating heart of the British economy. Across the UK, there are approximately 5.3 million family businesses, employing over 14 million people and contributing £225 billion per annum to the Treasury. BPR is especially vital for small family businesses—including many in my constituency of Gordon and Buchan—which form the backbone of our local economies, providing much needed local employment, stability and resilience in the face of economic and environmental challenges.
Businesses that rely on BPR to survive a succession event are often significant local employers, and their failure would have a knock-on effect on local services and on business rates, which are vital for local authorities. Other models of business ownership, such as plcs and those backed by private equity, do not face a tax charge on the change of ownership, so BPR is a vital mechanism to ensure that family businesses—85,000 of which are passed to the next generation each year—are at least on a level playing field.
About 77% of family small and medium-sized enterprises are first-generation businesses. Without BPR, these family firms would lose the opportunity to grow and transition into successful next-generation businesses. If, following a succession event, businesses effectively have to take a 40% hit on their finances or asset base to cover an IHT bill, what chance is there for them to secure longevity and flourish in the future? As we approach the Budget, I hope the Minister and his Government will take on board that APR and BPR are vital to the long-term planning and investment of rural areas and family businesses. It is not an overstatement to say that the future of rural communities and our food security depend on it.
In particular, the Government should focus on four things: providing clarity and reassurance on their intentions regarding APR and BPR; committing to maintaining those reliefs in their current form for at least the duration of this Parliament; commissioning an independent review on the wider economic and social impact of those reliefs beyond just the direct cost to the Treasury; and engaging meaningfully with rural communities, farmers and family business owners before pursuing any future changes.
APR and BPR are not mere tax reliefs; they are the foundation of a thriving, sustainable and entrepreneurial United Kingdom. They support our farmers and family businesses, pillars of our communities that have been there for generations. They ensure that businesses can continue to operate following a succession event and allow for the long-term planning necessary for farms and family businesses to develop and thrive. I look forward to hearing Members’ contributions.