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Minister says claim 70,000 farms to be stung by inheritance tax change is 'absolutely crazy misinformation'
19 November 2024, 19:19
Environment Secretary Steve Reed discusses the farmers' protest with Andrew Marr
A Labour minister has told LBC that claims that 70,000 farms will be affected by the inheritance tax change amount to misinformation.
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Environment Secretary Steve Reed told LBC's Tonight With Andrew Marr that an estimate by the Country Land and Business Association (CLA) that 70,000 farms - all those of 50 hectares or more, with a value of more than £1 million - will be affected by the change were "absolutely craziness".
The figure cited by the CLA represents around a third of the UK total.
Mr Reed said that 500 farms would be affected and no more.
His comments came after farmers descended on Westminster in a mass protest against the inheritance tax changes.
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The change announced by Labour in the October Budget was to get rid of agricultural property relief on some farms.
Previously, farming businesses qualified for 100% relief on inheritance tax on agricultural property and business property.
But now the tax is being imposed on farms worth more than £1 million, with an effective tax rate of 20% on assets above the threshold, rather than the normal 40% rate for inheritance tax.
Mr Reed said: "There's a lot of misinformation flying around. I've seen figures, I'm saying to you, 500 affected, maximum. I've seen people saying 70,000 will be affected.
"It's absolute craziness where these numbers are coming from. I know that farmers are hearing that and not knowing what to believe.
"But these projections from HMRC, validated by the independent OBR, validated by the IFS, very authoritative and independent sources are saying that only a small number of the very wealthiest and biggest farms will be affected. The rest will not.
"And so family farms will continue to be passed from generation to generation as they should be."
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Asked if there would be any changes following the protest, he said: "We'll always listen to farmers. I spent a lot of today listening to farmers and the past few weeks listening to farmers.
"I think that's absolutely the right thing to do but the policy is not going to change, but we'll always make sure the implementation is correct."
A key issue raised by farmers in response to Labour's tax announcement is that many will have to sell up to pay the bill - because while their farms may be valued highly as an asset, they do not produce much profit.
Mr Reed said the government would work to make farms more profitable.
"We don't have to accept that they're going to make such low levels of profit," he said.
'Do farmers' tax protests show Labour's Budget is starting to unravel?' asks Andrew Marr
"So, one of the things this government has done is we've allocated £5 billion, the biggest ever budget in our country's history, towards sustainable food production.
"We're seeking to negotiate a new trade deal with the EU to get British food exports flowing across the borders again. We want to use the power of public procurement to buy British to put money in farmers pockets."
Earlier, the CLA said the government had lied about the impact of the tax, and said protesters had "every right to be angry".
CLA president Victoria Vyvyan said: "Ministers claim the inheritance tax cap hits only the rich, but it could put 70,000 farms - big and small - at risk. All will be questioning their future, and whether they'll have one to pass on.
"Farmers shouldn't need to be marching to London; ministers should be marching to them.
"They need to understand the real damage and fix it before they destroy confidence in the rural economy."
