Why a Scottish MP thinks the UK Budget delivers ‘further harm’ to farming communities

A Scottish Lib Dem has warned farmers face “further harm” after changes announced in Labour’s first Budget.

Under plans announced last week, inheritance tax will be charged at 20 per cent on farms worth more than £1 million, although the Chancellor has said that in some cases the threshold could in practice be about £3m.

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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.

Now Orkney and Shetland MP Alistair Carmichael has had an urgent question in the Commons, highlighting past undertakings by the DEFRA Secretary of State that he would not raise inheritance tax on farmers.

Mr Carmichael called for the government to publish data behind several claims made by ministers in support of the tax changes.

The Lib Dem MP, who is chair of the Environment, Food and Rural Affairs Select Committee, also noted concerns about the removal of the ringfence for devolved farm funding, and questioned the compatibility of the Budget with the government’s stated aim of increasing food security.

“Building up strong and resilient farming communities should be a goal for anyone who cares about our environment, our food security and our economy,” he said. “At the heart of that goal surely has to be a full-throated defence of family farming up and down the country.

“I was disappointed by the minister’s responses today. They reinforce the impression many in our communities have that the government still does not understand why this Budget has provoked so much concern. The failures of the previous Conservative government cannot justify further harm to farming communities.

“There is still time for the government to take stock, listen to farming voices and build consensus around future tax rules. They should start by pressing pause – and giving us some transparency about how these plans came about in the first place.”

It comes as the head of the National Farmers’ Union (NFU) warned the “completely unfair” change to inheritance tax for farms has left farmers across the UK worried for their future.

NFU president Tom Bradshaw said he had never seen “the weight of support, the strength of feeling and anger” over the plans to impose inheritance tax on farms worth more than £1m, and added that many farmers wanted to be “militant” over the issue.

He said: “We will continue to try and work with the government to get to a resolution, but something has to change. I have never seen the weight of support, the strength of feeling and anger that there is in this industry today.

“Many of them want to be militant. Now we are not encouraging that in any way shape or form, but government need to understand that there is a real strength of feeling behind what this change means for the future of family farming in this country.”

A government spokesperson said: “Ministers made clear that the vast majority of those claiming relief will not be affected by these changes. They will be able to pass the family farm down to their children just as previous generations have always done.

“This is a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on. We remain committed to working with the NFU and listening to farmers.”