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Opposition MPs have called on the Government to reverse the “devastating” change to farmers’ inheritance tax.

In the Budget, Rachel Reeves announced that inheritance tax will be charged at 20% on farms worth more than £1 million, although the Chancellor has said that in some cases the threshold could in practice be about £3 million.

The move has caused a considerable backlash from farming and countryside communities, and led to a dispute over just how many farms and farm businesses would be affected.

During an urgent question in the Commons, the Conservative MP for Bridlington and The Wolds, Charlie Dewhirst, said farmers in his constituency “categorically do not” support the measures.

He told MPs: “They are shattered by this announcement and the impact on my community will be devastating. Now, can I ask the minister today to do the right thing and withdraw these plans?”

Environment Minister Daniel Zeichner said farmers had told him “they were concerned about the way in which the system was being abused”.

He added: “I’m afraid this is a Budget that stands in its entirety, and the whole country needs stability, so it will stand.”

Conservative former minister Kevin Hollinrake said the move is a “transition from family farms to the state” justified by “warped socialist ideology”.

He told MPs: “The minister talks about a transition, talking to farmers in Bedale on Friday, the only transition they can see is transition from family farms to the state.

“Does he realise that the farming industry is one of the least profitable sectors in the country, return on capital employed 0.5% – that’s the Government’s own figures, that’s around a 20th of the typical profit margin in the UK.

“Other than by some warped socialist ideology, how can he justify taking away 40 years of profits to the typical farm?”

Mr Zeichner replied: “(Mr Hollinrake) may wish to remember the agricultural transition was embarked upon by the then government, a seven-year transition process.

“We’re just over halfway through it, and it’s important that it’s maintained in a stable, sensible way, and that is exactly what we’re doing.

“So my answer to his question is, the challenge that was put to me was maintain stability, don’t tear up those schemes, maintain them, make them work, and that is exactly what we are doing.”

The Environment Minister earlier pledged the Government’s “unwavering” support for farmers and rural communities.

He told the Commons: “Currently, small farms can find themselves facing the same levels of tax bills as much larger farms, despite having a much smaller asset.

“20% of inheritance tax is claimed by the top 2%, 40% is claimed by the top 7%, that’s not fair, it’s not sustainable, and sadly, it’s been used, in some cases by wealthy landowners to avoid inheritance tax, and that’s why this Government has announced plans to reform agricultural property relief.”

Mr Zeichner went on to say: “73% of agricultural property relief claims are less than £1 million, the vast majority of farmers will not be affected, they’ll be able to pass a family farm down to their children, just as previous generations have always done.

“It’s a fair, balanced approach that protects family farms, while also fixing the public services those same families rely on.”

Labour MP Bill Esterson accused the Tories of “defending tax avoidance” in their criticism of the Government’s measures.

The member for Sefton Central told the Commons: “It’s extraordinary that a small number of wealthy landowners have been using agricultural property relief to avoid inheritance tax.

“What is more extraordinary is how the party opposite have defended tax avoidance in the way that they have.”

Mr Zeichner replied: “(Mr Esterson) makes a powerful point. Not only do those people seem to relish finding ways of creatively running their accounts, some of them even, of course, take money to write columns about them as well.”

Shadow rural affairs minister Robbie Moore said farmers “feel completely and utterly betrayed by the measures in this Budget”.

He said: “Does the minister realise that the vast majority of farming families aren’t multi-millionaires?

“Most are cash poor with many struggling to break even, so how does the Secretary of State expect farmers to do more with less? And why is he happy to hand our next generation of farmers an impossible tax bill?

“Next, the Government claims small family farmers will be protected, yet the CLA (Country Land and Business Association) and the NFU (National Farmers’ Union) have today disputed the Government’s figures, so will he commit to release a full assessment of his policy, including an impact on national food security?”

Mr Zeichner replied: “The figures are absolutely there, they were published by the Treasury for all to read.

“They are the facts on these estates that have made claims on agricultural property relief in the last year available. They’re there for everyone to see – it’s not difficult, it’s not complicated, they are there.”

Tuition fee rise ‘morally wrong’ and only a ‘sticking plaster’ for universities

The Prince of Wales will have a high-level meeting with South Africa’s president during a week of events in Cape Town highlighting the royal’s Earthshot Prize.

William’s audience with Cyril Ramaphosa was described as a “follow-up” to the state visit made to the UK by Mr Ramaphosa in 2022.

The two men will sit down for talks and be joined by Foreign Secretary David Lammy, in the country for a meeting with his South African counterpart Ronald Lamola.

The future king begins a four-day visit to Cape Town on Monday, taking part in a series of events shining a light on young African climate activists, and the fight against the illegal wildlife trade, with the Earthshot Prize awards ceremony the highlight on Wednesday.

William’s visit starts with an event with young environmentalists from across Africa and South East Asia who are taking part in the inaugural Earthshot Prize Climate Leaders Youth Programme.

Antony Phillipson, Britain’s high commissioner to South Africa, said ahead of the royal visit: “I would just highlight that we are actually delighted to have the Prince of Wales here this week for Earthshot week, and we will be taking the opportunity of doing some bilateral events with him, and for him.”

He added: “We very much see this as a follow-up to the state visit … which we continue to see here as a very historic moment between the UK and South Africa.”

The high commissioner categorised the royal family’s diplomatic role as the “highest level you can engage” and the policy underpinning a given event would be conducted through follow-up engagements by government ministers.

Dubbed the prince’s “Super Bowl” moment, the prize-giving ceremony on Wednesday will recognise environmental solutions to “repair” the planet and will be broadcast to 50 African countries with a potential African audience of millions, and screened online.

Cape Town’s Table Mountain and other landmarks will be lit up green during the four-day Earthshot Week hosted by the city and attended by William, and 1,000 community stalwarts have been invited to the ceremony in recognition of their efforts.

The Earthshot Prize’s green carpet has been a fixture since William first staged the awards ceremony three years ago in London, followed by Boston and Singapore last year.

Guests have been asked to “re-wear” their wardrobe or spotlight African designers to highlight the importance of local talent and sustainable fashion and arrivals on the famous walkway will be livestreamed on the Earthshot Prize’s YouTube channel, with hosts Ebuka Obi-Uchendu and Moozlie.

The awards event will be staged in a reusable dome that has been used for a number of events, with the production ceremony creating around 650 jobs locally. It will be opened by composer and singer Lebo M, performing Circle Of Life from The Lion King in a pre-recorded performance from the top of Table Mountain.

Octogenarian RAF veteran takes vulnerable youngsters under wing as foster carer

By Christopher McKeon and Richard Wheeler, PA Political Staff 03/11/2024

Chancellor Rachel Reeves has said she was “wrong” when she said during the election campaign that she would not need to raise taxes, but insisted further increases will not be needed.

During a campaign event on June 11, Ms Reeves said she would not need to raise taxes beyond the increases already set out in the Labour Party’s manifesto.

But delivering her first Budget on Wednesday, she announced £40 billion of tax rises, including increases to employers’ national insurance contributions and changes to inheritance tax and capital gains tax, as she sought to pay for investment in public services such as schools and the NHS.

Appearing on Sky News’s Sunday Morning with Trevor Phillips, Ms Reeves said she had been “wrong” during the election, because she did not “know everything” about the state of the public finances.

She said: “I arrived at the Treasury on July 5, just over a month after I said those words. I was taken into a room by the senior officials at the Treasury and they set out the huge black hole in the public finances, beyond which anybody knew about at the time of the general election.”

The size of that “black hole” between the previous government’s commitments and what it was actually spending has been disputed.

The Government has claimed it amounts to £22 billion, while the Conservatives have dismissed it as “fiction”.

But the Office for Budget Responsibility said the previous government had failed to disclose around £9 billion of additional spending pressures at the time of the last Budget in March, adding that the position may have changed between March and July.

Announcing the tax rises on Wednesday, Ms Reeves gave an “absolute commitment” that there will be no tax increases on “working people”, saying they Government has “wiped the slate clean” after the Tories’ “mismanagement”.

She said: “It’s now on us.

“We’ve put everything out into the open, we’ve set the spending envelope of this Parliament, we don’t need to come back for more, we’ve done that now, we’ve wiped the slate clean.”

Pressed on whether she will return with more tax rises, the Chancellor replied: “I’m not going to be able to write five years worth of budgets on this show today, but there’s no need to come back with another Budget like this, we’ll never need to do that again.”

Economists at the Institute for Fiscal Studies and the Resolution Foundation suggested after the Budget that current spending plans mean the Chancellor will have to find £9 billion more after next year to avoid making cuts to unprotected departments.

But Ms Reeves is counting on economic growth to help avoid further tax rises.

She is expected to set out a series of reforms to pensions, welfare and industrial strategy in the coming weeks.

Combined with reforms to the planning system to speed up building projects, Labour hopes the changes will be enough to significantly boost investment, productivity and economic growth.

Tuition fee rise ‘morally wrong’ and only a ‘sticking plaster’ for universities