Business Property Relief and Agricultural Property Relief

Patrick Spencer Excerpts

Thursday 17th October 2024 Westminster Hall

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

It is a pleasure to serve under your chairmanship, Dr Huq. I join in the tributes to my hon. Friend the Member for Gordon and Buchan (Harriet Cross) for securing this important debate. Like many Members, I am motivated to engage in it because I represent a rural constituency that is made up of many small and large farm holdings.

Without making this sound like my maiden speech, Suffolk is a beautiful rural constituency with a stunning landscape. It is known for its contribution to our food system, and it is home to many market towns where family-owned butchers, bakers and grocers source their produce from local farms. Even breweries do so. Adnams Southwold is in the next-door constituency, but it sources all the ingredients for its famous beers and other products from farms in the local area. One in seven jobs in Suffolk have some relationship to the food production industry. One only has to go to the Suffolk Show to see the importance of farms, farming and agriculture to our local economy. As a result, we have to take seriously the livelihood and financial sustainability of our farms.

It is worth remembering that farms are, as many Members have said, small businesses with tight margins and high capital costs. One way we could greatly threaten the long-term financial sustainability of farms, which are so integral to our economy and community, is to threaten the owners with a tax if they pass the family farm down to the next generation.

Let me explain why that is a bad idea. First, as with the taxation of many forms of capital, liquidity is being demanded from a resource that is fundamentally illiquid. As we have heard, the Government will fundamentally force many farms to sell off parcels of land, and when farm owners realise that it is hard to sell off small parcels of land, they will be forced to sell their whole holding. Don’t believe me? Eighty-six per cent. of respondents to a poll of farmers conducted by the Country Land and Business Association said that they would have to sell some or all of their land if they were faced with a new IHT obligation.

Secondly, those who can shoulder the cost of a new tax on their farm and business will simply have to reallocate a lot of their capital away from more productive sources of investment, such as cattle, machinery and labour. That has grossly negative economic and social consequences. My next-door neighbour is a relatively well-heeled farmer who also uses his land to provide a wedding venue and rental properties—that is something we have heard about. If we place farmers under more financial stress, they will simply have to close down those businesses. Let us not forget that many of those businesses provide really important jobs and incomes and, fundamentally, pay tax in our economy. We are taxing one half of the equation only to take away from the other.

Thirdly, the proposal will yield an irrelevant amount of money in the long run. We have all read the report from the Institute for Fiscal Studies that says that agricultural relief costs the Exchequer £400 million a year. To put it bluntly, I know that many people in the Treasury and Labour Members see landowners as rich rent seekers who invest in property to avoid IHT. But let us look at the contribution that people such as James Dyson have made to our food production industry by incorporating technology and environmental standards into the sector, or at the incredible impact of the Grosvenor group in restoring peatland and moorlands in parts of Cheshire and Lancashire. That will have a hugely positive impact on wildlife numbers and carbon emissions.

If the Treasury genuinely believes that we should tax farmers in the hope that they will release land to housing and property developers—trust me, we are not going to solve the housing crisis by building houses on farmland in Suffolk. It will be solved by investing in units in towns and cities, where young people really want to live and where footfall already exists. Such an argument ignores all the positive impact that many farmers have made, and it completely neglects the thousands of small families who are not rich and who may be forced to sell their farm despite having tended to the land for generations. The imposition of a new tax on inherited land will have a sad impact on family-owned farms, of which there are too many in my constituency to name. Many have spoken in recent years of the increasing difficulty of running their farms in the current economic climate. They have to negotiate a labyrinth of new environmental regulations, a new post-Brexit payment system, an energy crisis that has pushed their costs through the roof, higher interest rates and increasing competition from abroad.

To remove agricultural and business relief from these small family-owned farms could push many over the edge. What a loss that would be to our economy, to our communities and to the many families who have owned, farmed and maintained their land for generations, and who will continue to do so for generations to come.

[Dr Rupa Huq (in the Chair)]

I call the first Front-Bench spokesperson: Will Forster for the Liberal Democrats.

Winter Fuel Payment

Patrick Spencer Excerpts

Tuesday 10th September 2024 Commons Chamber

[Wendy Morton]

My hon. Friend makes an important point. It comes back to how this is about political choice, and I am here to stand up for my pensioners in my constituency.

I also point out that it was the Conservative party in government that drove up pension credit applications by 73% in just 12 months. It is important that we do not forget that. Pension credit take-up is often an entrenched issue. People in my constituency are often too proud to apply. The process is too complicated: 22 pages, 243 questions and, as we have heard, nine weeks to determine the outcome of the application.

Tackling pension credit take-up is important, but it is not the solution to the crisis that pensioners face today. Only weeks ahead of the winter, they need help now. According to Age UK, across the UK, around 2 million pensioners who badly need the money to stay warm this winter will now not receive it. Losing the winter fuel payment will make it significantly harder for them to keep warm, which undermines their health and wellbeing. As we have heard, pensioners often have serious health conditions and disabilities. Often, they live in older properties, and in the north or in my constituency in the west midlands it is often colder than in other parts of the country. Pensioners are all disproportionately affected, yet there is no sign of an impact assessment, just a Chancellor who, seemingly, storms ahead with her political decision.

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

Will my right hon. Friend give way?

[Wendy Morton]

I will continue because I am conscious that others want to get the chance to speak.

There is no time for older people on low incomes to set aside money—if they have it—to help them get through the winter. Being at home in the cold increases the risk of raised blood pressure, stroke, heart attacks and hypothermia. I did not vote for this callous cut earlier today. I will not pick the pockets of those who have worked hard all their lives, doing the right thing by their families and this country. I will continue to speak up for my constituents, who deserve better than this. This is so wrong.

--- Later in debate ---

[Patrick Spencer]

I think all hon. Members are very disappointed not to see a proper impact analysis of this decision. Does my hon. Friend agree that the best way to analyse the impact of such a policy is to speak to the people who sent us to this place, as she is saying, and to hear the utter fear and concern they have about its impact?

[Rebecca Harris]

My hon. Friend is spot on. It is the anxiety that it causes people. They do not know if they will live another 18 months or 25 years. People on fixed incomes, with no ability to raise that income, are very worried about spending money. There is also a large and, sadly, growing cohort of elderly residents who are developing dementia, and one of the early symptoms, often, is financial anxiety, including in people whom we would think of as really quite wealthy. I have known residents who have regressed to thinking that they are still living under rationing because they grew up as a lad in abject poverty, and they will not spend money. Being told, “Here’s £300 for fuel,” makes a world of difference to those people.

I was not a fan of Gordon Brown, who once gave a derisory 75p increase to pensioners, but this policy was a huge success—credit to him. That is why my Government never changed it. For £300 for every pensioner, we give incredible peace of mind that they can put their heating on—

--- Later in debate ---

[Sir Ashley Fox (Bridgwater) (Con)]

I speak on behalf of 19,300 pensioners in my constituency who are set to lose their winter fuel allowance. Some 23% of my constituents are aged 65 or over, which is well above the national average. Many retired people in my constituency have done the right thing: they have worked all their lives, paid their national insurance stamp, and now have a small private pension and modest savings. It is because they have done the right thing that many of those pensioners are not eligible to claim pension credit. This Government are choosing to punish them for the prudent and conscientious choices they made through their working lives by withdrawing this important means of support.

Labour justified the decision to cut the winter fuel allowance by talking about its alleged poor economic inheritance. Let us take a moment to clear up some facts. In 2010, the budget deficit was about 11% of GDP at £157 billion. Today, it is about 4% of GDP. In 2010, unemployment was about 8%, and today it has halved and is about 4%. In May 2010, inflation was 3.4%. Today it is 2%. This is not the worst economic inheritance since the war.

[Patrick Spencer]

I am sure my hon. Friend will agree when I say that the economic inheritance that the Government received is incredible, considering that we had to deal with the covid pandemic crisis as well as the Russian invasion of Ukraine. That put huge pressure on our economy.

[Sir Ashley Fox]

My hon. Friend makes an important point. It just emphasises the fact that when the Chancellor says that it is a tough decision that has to be made, she is actually making a political choice. She has chosen to give train drivers earning £60,000 a year a pay rise of 15%. She has chosen to cut the income of retired people with a pension of £15,000 a year. That was her choice, and the British people will judge her and the Labour party on it.