Farmers will have to stump up hundreds of thousands of pounds under Labour’s inheritance tax plans, the Conservative Party has claimed.
Shadow business secretary Kevin Hollinrake warned Labour MPs who intend to have a pint in a local pub and a chat with farmers this weekend to “think again” following yesterday’s Budget.
Business minister Douglas Alexander defended the Government’s reforms of inheritance tax, saying “difficult and necessary choices” had to be made.
From April 2026, the first £1 million of combined business and agricultural assets will continue to attract no inheritance tax. But for assets over £1 million, inheritance tax will apply with 50% relief, at an effective rate of 20%.
During business and trade questions, Mr Hollinrake told the Commons: “The Labour members who are thinking of going back to their seat for a pint in a local pub and a chat to local farmers, I think I would think again.
“A publican contacted me last night, of a mid-size pub saying to me that because of yesterday’s changes, he will be £120,000 a year worse off, moving him from profit into loss. When they said their plans were fully costed and fully funded, yesterday was a massive broken promise wasn’t it?”
Business minister Sarah Jones replied: “(Mr Hollinrake) oversaw the worst Parliament for living standards in modern history, and we couldn’t choose that inheritance, and we have made choices.
“I would say to (Mr Hollinrake), would he rather we didn’t compensate for the infected blood scandal? Would he rather we didn’t compensate for the Horizon victims, for whom there was no money in the Budget on his watch? Would he rather we didn’t invest in the health service?
“Would he rather that we didn’t increase the minimum wage? Would he rather we didn’t support carers? Would he rather that we made choices that he made? Which was to cut national insurance for workers when he had no budget to do so.”
Shadow business secretary Kevin Hollinrake said Labour’s budget was ‘a massive broken promise’ (James Manning/PA)
Mr Hollinrake then said: “Their choice was to hit businesses and that’s because there’s not an ounce of business experience amongst any of them.
“Labour’s death taxes will hit farms and businesses. Families with a typical farm will have to find hundreds of thousands of pounds or see their farms broken up and sold.
“The Environment Secretary, their colleague, said 10 minutes ago they had no intentions of putting death taxes on businesses. That was a broken promise wasn’t it?”
Ms Jones replied: “I’m not going to take any lectures from the opposition who said – and I quote – ‘F business’. The cheek of the opposite party to come at us when we are clearing up the £22 billion black hole which we inherited when we are setting in train stability.
“I spent quite a lot of yesterday, as (Mr Hollinrake) would expect, talking to businesses, having meetings with businesses about the Budget and its implications, and we talked about the potential for growth, we talked about the long-term stability and changes that we are making on this side of the House, unlike the previous government.”
Later in the session, Conservative former minister David Mundell asked: “Farming and agricultural businesses employ thousands of people in my constituency and make a huge contribution to the local economy, so can the minister set out exactly how yesterday’s Budget will help them develop and grow?”
Business minister Douglas Alexander replied: “Farmers, like any other business people, need the stability that will be delivered as a consequence of fixing the foundations that were set out yesterday.
“I similarly represent a constituency with a number of farmers, I’m aware of the concerns that have been raised in relation to inheritance tax, but frankly there are difficult and necessary choices that had to be made yesterday, because of the choices that were not made by the government in which he served.”