I received a phone call and was told the government will lift the planned inheritance tax threshold for inherited farmland from £1m to £2.5m. Combined with an exemption which allows farmers to pass on assets to their spouses tax-free, a couple will be able to pass on up to £5m in qualifying assets.
I am delighted with this news. It has also been warmly welcomed by the NFU – National Farmers’ Union, which has now ended its campaign on this issue.
I have been part of a lot of work to get to this point. This includes letters to ministers and meetings with government, as well as engagement with constituents, local farmers and the NFU.
The NFU asked concerned Labour backbenchers to abstain on resolution 50 of the budget, which related to this issue. I did this, even though it meant breaking the whip, because it continued a constructive dialogue in a way that voting against the resolution would not. The fruits of this are seen in today’s result.
The government has listened to farmers. It has made changes to protect their businesses, which often make only small profits despite the often-significant value of the land they occupy.
In the context of the dire economic inheritance the current government received from its predecessors last year, this is a considerable achievement.
There is still a challenge with those who have little meaningful interest in farming, some of whom are wealthy famous folk off the telly, who buy a farm to draw subsidies and insulate themselves against tax – despite their considerable wealth made elsewhere. I am not at all against people making money, but that approach exploits farming, artificially inflates the value of farmland and threatens food security.
That is part of why the principle of this policy was right. But the threshold at which it was to be applied was too low, and the government has made changes accordingly.
Today’s announcement, combined with the work the government is taking forward from the review by ex-NFU president Minette Batters, will help farms be profitable and ensure food security. Poor management of subsidies under the previous government and the effect of Brexit means this work is vital.
I thank the local farmers and the NFU who have generously and constructively engaged with me and the government, which has allowed us to make the case to get to today’s announcement.
I also want to thank my colleagues in the Labour Rural Research Group (some of whom are in the picture with this post, which was taken at the LRRG and NFU reception at the recent Labour party conference) – especially Jenny Riddell-Carpenter MP and James Naish for Rushcliffe, who have done sterling work on this issue.