Labour MPs revolt towards Rachel Reeves as inheritance tax row explodes | Politics | News | EUROtoday

Labour MPs have pleaded with the Government to evaluation its plans to impose inheritance tax on farmers, because the Commons voted in help of the proposal. Markus Campbell-Savours, Labour MP for Penrith and Solway, rebelled and voted towards Chancellor Rachel Reeves’s modifications to the tax, telling the Commons he needed to do all he might for his group.

Backbenchers argued most farmers are “not wealthy land barons”, and the the measure did not deal with “abuse by the celebrities and the billionaires” who purchase farmland to keep away from paying a full inheritance tax invoice. Treasury minister James Murray insisted modifications the Government made within the Budget are a “fair way forward”. But Terry Jermy, Labour MP for South West Norfolk, stated there have been “fundamental flaws” with the inheritance tax plan.

Mr Jermy stated: “Farming is in crisis. Just this year, we have seen the second worst harvest on record, and confidence is at an all-time low. Longer, hotter summers, drought and flooding, delays to schemes such as the sustainable farming incentive, biosecurity threats, frustration with planning, permits and licensing, and the dominance of the supermarkets all erode the sustainability of the sector and weaken our food security immeasurably.”

He stated it was a fantasy that many farmers had been rich. The Labour MP stated: “Farming is so often misunderstood and caught out by the view that land ownership equals wealth. If a farmer owns 200 to 400 acres of land, as many of the 500 farmers in my constituency do, they may well be wealthy if they did something with that land other than farm it, but if they continue to farm the land, that value is theoretical and will return very little profit. That should be of huge concern to this country and this Government.”

In the Budget, the Chancellor introduced that any of a £1 million APR and enterprise property aid allowance that goes unused can be transferable between spouses and civil companions.

However, this has not stopped criticism from the farming group, which has fiercely opposed the modifications since they had been proposed in final 12 months’s price range, with the introduction of a 20% fee on agricultural land and companies price greater than £1 million.

Samantha Niblett, Labour MP for South Derbyshire, stated: “Farmers in my constituency simply cannot see past the broader inheritance tax changes. They remember that Labour promised no such changes before the general election and that our manifesto declared that food is the first line of defence, yet right now this country has just six days’ worth of food supplies. With global tensions rising and instability growing even closer to home in Europe, we should be doing everything possible to support the very people who help keep Britain fed.

“Most farmers are not wealthy land barons; they live hand to mouth on tiny and sometimes non-existent profit margins. Many were explicitly advised not to hand over their farms to their children, and they now face enormous and unexpected tax bills.”

Markus Campbell-Savours, Labour MP for Penrith and Solway, stated: “There remain deep concerns about the proposed changes to agricultural property relief.

“Over the course of a debate that has raged for more than a year, Members from across the House have made the case against these changes. They are changes that leave many, not least elderly farmers yet to make arrangements to transfer assets, devastated at the impact on their family farms.”

Jenny Riddell-Carpenter, Labour MP for Suffolk Coastal, stated: “The debate about farming inheritance has shone a spotlight on something deeply important, the fragility of farming profitability in Britain today. At the heart of my concern is a simple economic truth: you cannot tax a business that is not profitable. Even in good years, many farmers in my constituency struggle to break even.

“A typical 200-acre arable family farm, worth about £2 million, makes only about £27,000 in profit. Many family farms in Suffolk Coastal would not recognise even that figure.

“Farmers are not opposed to reform. They know that for far too long, agricultural property relief has been used as a loophole for the very wealthy to shelter their assets. So yes, closing that loophole is right, but we must do it in a way that protects working family farms, which simply cannot absorb a tax bill that they have no means to pay.”

North West Leicestershire Labour MP Amanda Hack stated: “The changes to allow the transfer of inheritance tax allowances to a surviving partner are welcome, but I know the worries of farmers in my constituency, so I ask Ministers to keep the inheritance tax thresholds for farmers under review.”

MPs voted 327 to 182, majority 145, in help of the Government’s plans.