Rural Labour MPs show worry over farm tax proposals

Labour MPs representing rural constituencies have voiced strong concerns regarding the governments plan to impose taxes on inherited farmland, following an initial parliamentary vote on the proposals. Reports indicate that dozens of Labour backbenchers chose to abstain during Tuesdays vote, which authorises the plans scheduled to come into effect in April.

Markus Campbell-Savours, Labour MP for Penrith and Solway, voted against the measures, warning that many family-run farms could face serious financial strain. Treasury minister James Murray defended the plan, arguing that taxing farm estates is a fair method to generate revenue for public services.

The proposed changes aim to introduce inheritance tax on agricultural assets valued over 1 million, reversing a relief that has been in place in its current form since the 1980s. Estates exceeding this threshold would be taxed at 20%, half of the standard inheritance tax rate, with the government projecting that the policy could raise around 520 million annually by 2029.

The initial announcement last year prompted protests from farmers across the UK, who warn that the policy risks breaking up long-standing family farms. While ministers avoided a full legislative confrontation last year, MPs were given a preliminary vote on the proposals ahead of the comprehensive vote on this years Budget legislation.

The motion passed in the Commons with 327 votes in favour and 182 against, but notably, 86 Labour MPs abstaineda higher figure than similar Budget votes in recent years. Sources from the Labour Rural Research Group suggest that roughly 30 backbenchers deliberately chose not to participate in the vote.

John Whitby, Labour MP for Derbyshire Dales, remarked on the strong sentiment among MPs: There is a very real concern about these proposals within our own ranks. The National Farmers Union, opposing the changes, had encouraged Labour MPs to abstain as a means of pressuring the government to reconsider the plans.

The government maintains that the current relief is inequitable and that the 1 million threshold, combined with existing reliefs of up to 500,000 per person, will continue to protect small family farms. A recent amendment allows unused portions of the 1 million allowance to be transferred between spouses and civil partners, which is expected to reduce the projected tax revenue by 70 million annually.

Labour MPs Jenny Riddell-Carpenter of Suffolk Coastal and Samantha Niblett of South Derbyshire acknowledged the concession but called for further measures to ease the impact. Niblett highlighted that many farmers are operating on narrow profit margins and that the party risks losing their trust over the inheritance tax changes.

Campbell-Savours explained his opposition by referencing his pre-election promise not to alter the relief, stating the policy could leave numerous farmers devastated at the impact on their family farms. Treasury minister Murray maintained that the revised plans offer a fair way forward, balancing relief for families with revenue for public services.

The proposals face resistance not only from Labour backbenchers but also from the Conservative and Liberal Democrat parties. Tory shadow environment secretary Victoria Atkins praised Labour MPs who abstained, recognising their stance as a sign of support for the rural communities they represent.

Author: Aiden Foster