The government has suffered yet another blow, as rural Labour MPs rebelled over plans to impose inheritance tax on farmers.
Dozens of Labour MPs abstained from the Commons vote, while one backbencher – Markus Campbell-Savours – voted against the measures, expressing âdeep concernsâ about the impact on farmers.
It came after the National Farming Union (NFU) called on Labour MPs to abstain from the vote and âshow that they truly back the working people of the countrysideâ.
Backbenchers argued that most farmers are ânot wealthy land baronsâ, and said the measure failed to tackle âabuse by the celebrities and the billionairesâ who buy farmland to avoid paying a full inheritance tax bill.
But treasury minister James Murray insisted changes the government made in the Budget are a âfair way forwardâ.
MPs voted in support of the governmentâs plans, with 327 votes to 182 â a majority of 145.
Speaking in the Commons Budget debate on Tuesday, Mr Campbell-Savours said: âThere remain deep concerns about the proposed changes to agricultural property relief (APR).
âMembers across the House have made the case against these changes, changes which leave many, not least elderly farmers, yet to make arrangements to transfer assets, devastated at the impact on their family farms.
âMany farmers feared this was coming. Some transferred in advance. Others contacted Labour candidates who reassured them, based on public commitments from the then shadow secretary of state for Defra, that APR would not be touched.
âI was one of those Labour candidates, and itâs for that reason Iâll be voting against the Budget resolution enabling these changes.â
Mr Campbell-Savours said he wants to be able to walk around his community âknowing I did all I could for themâ, and could not do so if he broke his word.
In the Budget, the chancellor announced that any of a ÂŁ1 million APR and business property relief allowance that goes unused will be transferable between spouses and civil partners.
However, the move has not stopped criticism from the farming community, which has fiercely opposed the changes since they were proposed in last yearâs budget, with the introduction of a 20 per cent rate on agricultural land and businesses worth more than ÂŁ1 million.
Samantha Niblett, Labour MP for South Derbyshire, welcomed concessions for married couples in the Budget but said: âI do plead with the government to look again at APR inheritance tax.
âMost farmers are not wealthy land barons; they live hand to mouth on tiny, sometimes non-existent profit margins. Many were explicitly advised not to hand over their farm to children, (but) now face enormous unexpected tax bills.
âWe must acknowledge a difficult truth: we have lost the trust of our farmers, and they deserve our utmost respect, our honesty and our unwavering support.â
Terry Jermy, Labour MP for South West Norfolk, said Ms Reevesâs Budget has failed to tackle the âabuse by the celebrities and the billionairesâ who buy farmland to avoid paying a full inheritance tax bill.
Labour MP for North East Hertfordshire, Chris Hinchliff, asked Treasury minister James Murray whether the government would âtake immediate actionâ if changes to agricultural property relief led to farm closures.
Mr Murray replied: âThe changes that weâve set out to agricultural property relief are a fair way forward.
âThey represent generous relief to people whilst raising money for the public finances, and at this Budget, the chancellor announced that any unused ÂŁ1 million allowance for the 100 per cent rate of agricultural property relief and business property relief will be transferable between spouses and civil partners.â
Mr Murray insisted the chancellor âtook fair choices on tax, that protected investment in our public services and that made our economy more secureâ.
Ahead of the vote, NFU president Tom Bradshaw said: âWithout change, the family farm tax will trap the most vulnerable members of our community, the elderly and terminally ill, with no ability to plan. Itâs inhumane and itâs cruel.â
And speaking afterwards, he added: “The MPs who have shown their support are the rural representatives of the Labour Party. They represent the working people of the countryside and have spoken up on behalf of their constituents.
“It is vital that the chancellor and prime minister listen to the clear message they have delivered this evening. The next step in the fight against the family farm tax is removing the impact of this unjust and unfair policy on the most vulnerable members of our community.”
