Fresh blow for Reeves as Labour hit with rebellion over tractor tax

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Dozens of Labour MPs abstained from the vote, while one backbencher voted against controversial measures to impose inheritance tax on farmers

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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 “deep concerns” about the impact on farmers.

It came after the National Farming Union (NFU) called on Labour MPs to abstain from the vote and “show that they truly back the working people of the countryside”.

Backbenchers argued that most farmers are “not wealthy land barons”, and said the measure failed to tackle “abuse by the celebrities and the billionaires” 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 “fair way forward”.

MPs voted in support of the government’s plans, with 327 votes to 182 – a majority of 145.

Speaking in the Commons Budget debate on Tuesday, Mr Campbell-Savours said: “There remain deep concerns about the proposed changes to agricultural property relief (APR).

“Members 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.

“Many 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.

“I was one of those Labour candidates, and it’s for that reason I’ll be voting against the Budget resolution enabling these changes.”

Mr Campbell-Savours said he wants to be able to walk around his community “knowing I did all I could for them”, and could not do so if he broke his word.

In the Budget, the chancellor announced that any of a £1 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 year’s budget, with the introduction of a 20 per cent rate on agricultural land and businesses worth more than £1 million.

Samantha Niblett, Labour MP for South Derbyshire, welcomed concessions for married couples in the Budget but said: “I do plead with the government to look again at APR inheritance tax.

“Most 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.

“We 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.”

Terry Jermy, Labour MP for South West Norfolk, said Ms Reeves’s Budget has failed to tackle the “abuse by the celebrities and the billionaires” 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 “take immediate action” if changes to agricultural property relief led to farm closures.

Mr Murray replied: “The changes that we’ve set out to agricultural property relief are a fair way forward.

“They represent generous relief to people whilst raising money for the public finances, and at this Budget, the chancellor announced that any unused £1 million allowance for the 100 per cent rate of agricultural property relief and business property relief will be transferable between spouses and civil partners.”

Mr Murray insisted the chancellor “took fair choices on tax, that protected investment in our public services and that made our economy more secure”.

Ahead of the vote, NFU president Tom Bradshaw said: “Without change, the family farm tax will trap the most vulnerable members of our community, the elderly and terminally ill, with no ability to plan. It’s inhumane and it’s cruel.”

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."

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