Inheritance Tax Relief: Farms Debate

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Department: HM Treasury

Inheritance Tax Relief: Farms

Robbie Moore Excerpts
Monday 10th February 2025

(1 day, 18 hours ago)

Westminster Hall
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Robbie Moore Portrait Robbie Moore (Keighley and Ilkley) (Con)
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It is a pleasure to serve under your chairmanship, Dr Murrison. Here we are again! As we speak, thousands of farmers are once again rallying outside the gates of this building. Over the past six months, our farmers have repeatedly been told by this Labour Government that their way of life is expendable and that their hard work, their sacrifice and their future can simply be priced up and taken away. Is it any wonder that our farmers have shown up in such vast numbers again today?

Make no mistake: it is not just our farmers who are outside our gates. Across the country, more than 148,000 people have signed the petition because they know, just as Opposition Members do, that the family farm tax is wrong, is vindictive and must be scrapped now. I thank the hon. Member for South Norfolk (Ben Goldsborough) for leading this petitions debate, but I have to say that he did a disservice to the petitioners, who put their faith in him to lead this debate, by not actually forming an opinion. He communicated strong arguments, but he did not form an opinion. He was a mere spokesman and did not use his opportunity in this debate to voice properly their concerns.

What an image for our farming community to take away from this debate! Where on earth is the Secretary of State for Environment, Food and Rural Affairs? The shadow Secretary of State, my right hon. Friend the Member for Louth and Horncastle (Victoria Atkins), is sitting beside me. Where on earth is the farming Minister? He is absent. What message does it send that the Labour party has filled up its Benches but that only five Labour Members spoke, despite having the opportunity to voice their concerns in this three-hour petitions debate, and that all five of them voted against scrapping the family farm tax when we brought the motion to the House? This is probably one of the most important debates we could have on this issue, and yet once again those with responsibility for rural areas and our farmers are missing in action. There are Labour Members who have turned up but have not even contributed to the debate, despite representing large rural constituencies.

Where is this Government, who claim to be on the side of rural Britain? If they had actually visited some of their farming communities, they would know just how damaging to our farming community their choice to implement the family farm tax is. They might have had some of the devastating conversations that I and many Conservative Members, including the shadow Secretary of State, have had. I would like to share some of them.

Just last week, in Northamptonshire, I met George, who has worked on his farm all his life and is nearly in his 80s. Unfortunately, he is extremely ill. He knows from his diagnosis that he does not have long to live, but he is not sure whether he will live beyond 26 April. He knows that if he should pass away before 26 April, his IHT bill will be zero, but if he passes away after 26 April, the tax bill for his family will be well over £1 million—a debt that his family simply cannot sustain. Taking his own life was an option that was put forward to me. These are horrific choices and unthinkable amounts of pressure for any individual or family to be put under, never mind some of the most vulnerable people in our society.

Graham Stuart Portrait Graham Stuart
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My hon. Friend is giving a very powerful speech. It is true that George was given no notice and no ability to plan for this important impact on his life and on everything he has worked for—but is it not worse than that, because he explicitly relied on a promise not to do this? That makes it particularly unforgivable.

Robbie Moore Portrait Robbie Moore
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I could not agree more.

Julia Buckley Portrait Julia Buckley
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Will the hon. Member give way?

Robbie Moore Portrait Robbie Moore
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I will answer this point before giving way. I could not agree more with my right hon. Friend the Member for Beverley and Holderness (Graham Stuart): the electorate were sold false promises in the run-up to the general election. They were specifically told that this Labour Government would not change agricultural property relief, but that is exactly what the Government have done.

How will the Minister communicate with George? What will he tell George, based on the promises that were given in the run-up to the general election? I cannot believe how many times I have asked this, but will the Government commit to recording suicide statistics across the farming sector as we move closer to April 2026? If the Minister is so determined to carry on with his family farming death tax, will he at least look at changing the abruptness of the tax’s implementation, in order to protect the most vulnerable in our farming community? It cannot be right that this Government are forcing people to make those decisions.

Another point that has been made is that the tax also hits our next generation, the very young people we need to power our industry forward. What does the Minister say to Gemma, the granddaughter of a lifelong farmer who has been forced to split up the family’s farm, leaving their future in doubt? What does the Minister say to the thousands of young farmers up and down the country, many of whom are outside this building right now, who are in a similar situation because of this Government’s choices? I spoke to a few of them outside, before coming into this House. The same concerns have been raised by my hon. Friend the Member for Dumfries and Galloway (John Cooper) and my right hon. Friend the Member for East Hampshire (Damian Hinds).

Then there are the tenant farmers. About a third of agricultural land is farmed by tenants. I spoke recently to Tom, a tenant farmer who stands to lose not only his livelihood but his family home, as his landlords scramble to reduce their IHT liability before April 2026. The Tenant Farmers Association is already warning of the mass renegotiation of many agricultural tenancies ahead of the family farm tax kicking in. For the tenant farmers there is no protection, because the Government did not see fit to recognise their unique situation. Will the Minister recognise the injustice to which tenants like Tom are being exposed through this Government’s choices? Will he provide protections for those with tenancies and for the whole agricultural sector?

Many points have been made by Opposition Members, including by my hon. Friend the Member for Chester South and Eddisbury (Aphra Brandreth), who talked about the wider implications on our food sector. Just last week, I was at the Yorkshire agricultural machinery show, where I met a tractor dealer who is also in a family business and struggling to stay afloat. Why? Because confidence is draining from the farming sector, and orders for new tractors, machinery and equipment have reduced significantly.

Carla Lockhart Portrait Carla Lockhart (Upper Bann) (DUP)
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I commend the hon. Member for his sterling work. He will know that early mornings, late nights, no holidays and low profit margins make up a typical day in the life of British farmers. They do it because they love the land, and they do it to feed our nation and sustain our rural communities. Does the hon. Member agree that this tax grab is a wrecking ball that will decimate our family farms? If Labour proceeds with it, it will have the death of rural Britain and rural Ulster on its hands. We need to stand up, stop this tax grab and ensure that the farmers outside this building today are heard in this place.

--- Later in debate ---
Robbie Moore Portrait Robbie Moore
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I could not agree more. It is telling that we have had strong representation in this debate not only from Northern Ireland, but from Scotland and every part of this United Kingdom. All Members have voiced their concerns that Labour’s choice to bring in the family farm tax will have catastrophic consequences not only for the hard-working families who are outside the gates of the Houses of Parliament right now, but for the wider agricultural sector.

Similar comments were made to me at the Yorkshire agricultural machinery show, which I attended earlier this week. Machinery dealers told me that they are being impacted not only by the lack of confidence resulting from Labour’s choices to reduce inheritance tax relief, but by the consequences of employer national insurance and other pressures being put on the wider sector. As if that were not bad enough, the business owner I spoke to will, by their own calculation, face a nearly £800,000 tax liability on death as a result of the changes to business property relief. That business has been trading for over 130 years and now faces the end of the line.

The impact is not just on farming family businesses, but on the wider agricultural sector. As my hon. Friend the Member for Gordon and Buchan (Harriet Cross) said, the NFU has undertaken research that suggests that unfortunately 75% of farming businesses will be affected. Research released recently by Savills suggests that 88% of farmland will be affected. Research conducted by the Central Association of Agricultural Valuers suggests that the Government underestimate fivefold the tax impact. These are professionals in the industry, and the Government are not even willing to listen to their points.

John Lamont Portrait John Lamont
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My hon. Friend is speaking powerfully about the issues that will affect the farming community. He mentioned the NFU; I met NFU representatives in Scotland recently and was appalled that the Treasury had refused to meet them. The representative body of farmers in Scotland is reaching out repeatedly to Treasury officials for a meeting to discuss its concerns, but Treasury Ministers and their teams are refusing to engage. They are just not listening. Does my hon. Friend agree that the Treasury is just not taking its responsibilities as seriously as it should to understand the impact?

Robbie Moore Portrait Robbie Moore
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My hon. Friend makes the point powerfully: collectively, all industry bodies and professionals in the sector are united. The NFU, the CLA, the CAAV—of which I put it on record that I am a fellow, having previously practised as a rural practice surveyor, so I understand the implications on the value of farmland—and Savills, as a key land agent, are all saying exactly the same thing: that this Government’s policy will have catastrophic consequences. My understanding is that the Chancellor has not yet even bothered to reach out to any of those professional organisations to sit round a table and try to understand their concerns. That point was made very eloquently by my hon. Friend the Member for Bridlington and The Wolds (Charlie Dewhirst).

Dave Doogan Portrait Dave Doogan
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The shadow Minister is articulating the substance of the issue with great passion. Does he agree that at the heart of this fiscal misadventure is classic Treasury dogma, whereby the principal objective is to quantify the price of something and take no cognisance of its value? APR and BPR will unravel for this Government. Does he agree that it would be far better for them to take steps to row back on this policy now, rather than waiting for it to go absolutely pear-shaped?

Robbie Moore Portrait Robbie Moore
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The hon. Member makes a very powerful point: this is about the choices that the Labour Government are imposing on many of our family farming businesses. Those families are now having to make difficult decisions about whether to look at disposing of land, plant and machinery or livestock to fit an IHT liability that may come down the line. All of that is reducing their productivity, which will have an impact not only on those family farming businesses, but on UK food production and UK food security. That is why I join all Opposition Members in calling on the Government to change course immediately.

Farmers are not multimillionaires. Many struggle to break even. As my right hon. Friends the Members for Beverley and Holderness and for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) have said, the vast majority of returns for our farming businesses are less than 1%, yet in most cases the value of the land on which they sit will be severely affected by the IHT changes, because the threshold that the Government are bringing out is £1 million. When the average size of a farm in England is 200 acres, and we take into account the farmland, the cottage that might exist on the farm, the plant and machinery, the livestock and the growing crops or stocks that may be in store, the value will be significantly higher than £1 million. That is why the Government need to listen to the NFU and its statistics.

Jim Shannon Portrait Jim Shannon
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I commend the shadow Minister. He is speaking exceptionally well and encapsulating the opinion of almost everyone in this Chamber. I thank him for that. In my contribution, I referred to the threshold. Instead of being £1 million on a rateable value in the ’70s, ’80s, ’90s and the whole way through, it should be at today’s value. Does he therefore agree that the threshold should be not £1 million, but at least £5 million?

Robbie Moore Portrait Robbie Moore
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I say to the hon. Member that the Conservatives have been absolutely clear: we would axe the family farm tax, and we would reverse the changes to business property relief and agricultural property relief, which have such huge and catastrophic implications. In my view, the Government need to go further—not tinker with thresholds, but provide proper, decent certainty to the whole agricultural community by reversing this provision, which will have catastrophic implications that they admit themselves will give the Treasury revenue of only about £500 million. In my understanding, that would keep the NHS going for about 20 hours. Given the detrimental impact that the changes will have, the Government should think about reversing this disastrous policy.

For the 10th time of asking in this place, what impact assessment has the Treasury made of the effect on growth within our entire agricultural sector as a result of the autumn Budget? What about all the other negative implications—employers’ national insurance, the minimum wage increase, the de-linked payments significantly reducing, and capital grants disappearing—even before we start talking about the family farm tax?

When this tax was first announced at the Budget, I thought that maybe our new Labour Government were being naive. Perhaps they did not understand the catastrophic impact their Budget would have on our farming businesses, and would soon change course. After six months, however, the Government have consistently refused to listen to the NFU, the CLA, the Tenant Farmers Association, the CAAV, Opposition Members and others who have repeatedly tried to expose the damaging impact of the tax.

John Lamont Portrait John Lamont
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My hon. Friend is being very generous with his time. One group he has not yet mentioned is the supermarkets: Tesco, Asda, Marks & Spencer, Lidl, Aldi, the Co-op, Sainsbury’s and Morrisons have all urged the Labour Government to pause and consult, because the UK’s future food security is at risk as a result of this policy.

Robbie Moore Portrait Robbie Moore
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That is absolutely the point. Others outside the sector, including all our supermarkets, have come together in agreement to say how catastrophic the damage caused to the farming sector by this Labour Government will be. Indeed, the 250,000 who signed the petition launched by the shadow Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Louth and Horncastle, which was presented to the Treasury a month ago, all agree with the comments that Opposition Members are making.

The Labour Government have wilfully ignored the farming community, the machinery dealers, the feed merchants, the auction marts, the supermarkets, the wider agricultural sector, including accountants, bank managers and land agents, and indeed the wider public. All have voiced their concerns that the family farm tax will have a crippling impact on UK agriculture. On top of that, as I said, the Chancellor continues not to meet any stakeholders. Today, as we have seen, no DEFRA Minister has even had the decency to turn up to this debate, despite its being of incredible importance.

No, the Government were not being naive. The reality is much worse. What is now clear is that this Government’s family farm tax is purposely vindictive. Indeed, I now believe that it was designed to be this way. The Government’s actual intent is to send a strong message to our farmers that they are not needed, that they do not matter and that they do not play a vital part in our national agenda.

As someone who has been involved in agriculture all my life since entering this place, this is personal to me. That is why we on the Conservative Benches do value our farmers. That is why the Conservatives will axe the family farm tax and reverse the changes to agricultural property relief and business property relief—no ifs, no buts.

As I have said, I can only hope that the Minister is about to get to his feet to confirm, right now, today—with all of our farming community watching this debate and many others on the streets of Westminster after travelling from far afield to get here—that his Government will listen, make changes and, hopefully, axe their vindictive family farm tax. If he does not, I can tell him that Opposition Members will keep coming back, again and again, until he and his Government finally stand up for our farmers up and down this country.

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Andrew Murrison Portrait Dr Andrew Murrison (in the Chair)
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I am grateful to the hon. Lady for giving me notice of her point of order. As she probably knows, it is not a point of order, but her remarks are now on the record.

Robbie Moore Portrait Robbie Moore
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Further to that point of order, Dr Murrison. In my contribution, I was making very clear the live and real conversations, concerns, queries and frustrations that have been brought forward not only to me in my position as shadow farming Minister but to other Members on this side of the House and, indeed, to organisations that sit outside this House, namely those representing the farming community. These are real live issues and representations that have been brought to us. Therefore, I do think it is just and right to use my role as the shadow farming Minister to bring before this House, in front of the Government Minister, those very live concerns and real conversations that are happening in many family farm homes just now.

Andrew Murrison Portrait Dr Andrew Murrison (in the Chair)
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The shadow Minister will know that is not a point or order either, but his remarks are on the record.