Rachel Reeves has rejected an alternative proposal to her inheritance tax raid on family farms which farmers across the UK have damned for being “cruel” and warned will spell the end of their sector.
The chancellor was confronted over her plans by former Tory minister John Glen during a hearing of the Treasury select committee in parliament, as he warned that it will have “a profound impact” on the farming community.
Mr Glen, whose Salisbury constituency has farming interests, suggested that if Ms Reeves had wanted to “target large wealthy people who buy vast tracks of land” to avoid tax, then she could have looked at business assets rollover relief.
“If you had a higher threshold you would then save a large number of farms that just do not have the liquidity [to pay the new inheritance tax],” he said.
He suggested that the figures quoted by Ms Reeves that it only effected one in four family farms was because she was including so-called “hobby farms” of three acres or less.
Mr Glen warned that even with the 10 year interest free deal to be allowed to pay off the inheritance tax, then farmers would still be lumbered with an “unaffordable” £100,000 or more a year.
But Ms Reeves rejected his proposal promising to write to Mr Glen and the committee with more details later.
She claimed that 40 per cent of the previous inheritance tax relief went to just 7 per cent of farms and 22 per cent of it to 2 per cent of farms.
Ms Reeves told the committee that the old rules which had been in place were unsustainable adding: “I think we have got a fair balance.”
She promised to “work with farmers to explain how this new system will work.”
But farmers, who plan to protest in large numbers on 19 November in London, have told The Independent of a mental health crisis already hitting the sector because of financial problems.
