Budget Blow for Chancellor Rachel Reeves
Chancellor Rachel Reeves has suffered another budget blow with a revolt by rural Labor MPs against inheritance tax for farmers. On the final day of the budget debate in the House of Commons, Labor backbenchers called for a U-turn on controversial proposals.
Inheritance Tax Proposals
Plans to introduce a 20 percent tax on farm properties worth more than £1 million from April attracted tens of thousands of protesters to London, with many fearing huge tax burdens that would ultimately force small farms to sell. Farmers have staged numerous protests against the tax in Westminster.
Vote on the "Family Farm Tax"
MPs voted on the so-called “family farm tax” shortly after 8 p.m. on Tuesday. Dozens of Labor MPs appeared to have abstained from voting, and one backbencher – joined Conservative members in voting against. The vote, the fifth of seven at the end of the Budget debate, saw Labor’s vote fall by 44 votes to 327, from 371 in the first vote on tax changes.
Call to Stand Up for Farmers
The mini-mutiny was followed by a call for Labor MPs from the National Farmers Union to abstain from voting. "To Labor MPs: We ask you to abstain from voting on the budget resolution 50," the NFU demanded. "With your help, we can show the government that there is still time to do the right thing on the family farm tax. Policies with such cruel human costs require change. Now is the time to stand up for the farmers you represent."
Reaction from Farmers Union
After the vote, the president of the National Farmers Union said: "The MPs who have shown their support are the rural Labor Party representatives. They represent rural working people and have spoken out on behalf of their constituents." "It is vital that the Chancellor and Prime Minister listen to the clear message they have delivered this evening. The next step in the fight against the family farm tax is to eliminate the impact of this unjust and unfair policy on the most vulnerable members of our community."
Government’s Response
The government won the vote comfortably by 327 votes to 182, a majority of 145. But the mini-mutiny showed the Chancellor and Sir Keir Starmer that the newly elected county Labor MPs were ready to revolt.
Concerns from Labor MPs
One Labor MP said earlier in the debate: “There remain significant concerns about the proposed changes to Agricultural Property Relief (APR). Changes that mean many, not least older farmers, have not yet made arrangements for asset transfers are devastated by the impact on their family farms.” Another Labor MP abstained from voting after telling MPs: “I am asking the government to look again at effective inheritance tax.” "Most farmers are not wealthy land barons; they live hand-to-mouth and benefit from tiny, sometimes non-existent profit margins. Many were specifically advised not to hand their farms to children, (but) they now face huge, unexpected tax burdens."
Conclusion
Labor MPs from rural constituencies who did not vote included several members, showing their disagreement with the proposed inheritance tax for farmers. The revolt by rural Labor MPs against the inheritance tax for farmers is a significant blow to Chancellor Rachel Reeves and the government. The issue remains a contentious one, with many farmers and rural communities opposing the proposed tax changes.
