The secretary of state in command of rural affairs, Steve Reed, has admitted he has modified his stance on farm inheritance tax due to the “£22bn black hole left by the Tories”.
When he was shadow DEFRA secretary, Mr Reed advised two farmers’ conferences a 12 months in the past Labour had no plans to vary inheritance guidelines, together with Agricultural Property Reduction (APR), which provides them a 100% exemption.
Within the funds final month Chancellor Rachel Reeves introduced farms price over £1m must pay 20% inheritance tax from April 2026.
There was no point out of inheritance tax for farmers in Labour’s manifesto.
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As farmers descended on Westminster in protest in opposition to the change, Mr Reed admitted he had modified his stance since final 12 months.
“We inherited a £22 billion black hole from the previous government, and the previous chancellor of the exchequer covered the scale of that problem up,” he mentioned.
“So none of us knew how difficult the problem would be when we were coming into government.”
He mentioned it’s “only right” to ask the “wealthiest landowners and the biggest farms to pay their fair share”.
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Farmers in tractors drive in Parliament Sq..
Pic: PA
Earlier, policing minister Dame Diana Johnson denied Labour had damaged a promise.
“I think the chancellor’s been very clear that she is not breaking promises that she made in the manifesto.”
When she was advised Mr Reed mentioned final December he wouldn’t change the foundations, Dame Diana mentioned: “Well, I don’t accept that.”
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Farmer outraged by taxes
Labour have mentioned they’re imposing the tax as a result of rich landowners are utilizing APR to keep away from paying inheritance tax.
The Nationwide Farmers’ Union (NFU) and the Nation Land and Enterprise Affiliation (CLA) each reported in November and December final 12 months Mr Reed had dominated out scrapping inheritance tax aid for farmland.
Requested on the CLA convention if he meant to do away with the tax break, Mr Reed mentioned: “We don’t. We have no intention of changing APR.”
He additionally advised the Nationwide Farmers’ Union (NFU) he wouldn’t be altering APR.
“This industry has been betrayed.”
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Farmers took half in a tractor protest exterior the Welsh Labour convention in Llandudno, North Wales this weekend
The federal government and farmers have been engaged in a row over what number of farms could be affected, with the Treasury saying 73% of farms wouldn’t be included, primarily based on previous claims.
Nevertheless, the NFU mentioned the Treasury has not included enterprise property aid (BPR), which farmers may also presently declare, and two thirds of farms will really be affected.
“It is tenant farmers and farmers in the middle who are going to be broken by this.”
