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‘Only the richest estates will be asked to pay’: Labour’s DEFRA Secretary hits back after backlash over inheritance tax plans for farms

Toby Keel Toby Keel

Steve Reed, Secretary of State for Environment, Food & Rural Affairs, has explained the government's position on inheritance tax and farming.

Earlier this afternoon in our Property Talk analysis of the budget, Annabel Dixon talked through the furore over the new rules on inheritance fax for farmers’ estates.

It’s clear from the initial strength of the reaction that this is a huge issue for those on both sides of the argument, and on Friday afternoon Steve Reed, Secretary of State for Environment, Food & Rural Affairs, wrote a piece for the Daily Telegraph explaining that much of the criticism so far has been wide of the mark.

As well as insisting that only a small percentage of farms will become liable for inheritance tax under the new rules, Mr Reed also refers to the fact that many enormously wealthy people have put large chunks of their assets into farming. Some have even been open about the fact that they have done so with a view to avoiding inheritance tax.

‘I am not prepared to let our public services continue to crumble while the wealthy buy up huge estates robbing young farmers of their dreams, just to avoid paying their taxes,’ writes Reed.

‘This is scandal. I completely understand farmers’ anxiety at any changes. But rural communities need a better NHS, affordable housing and public transport we can provide if we make the system fairer. That is why the Labour Government has announced plans to reform Agricultural Property Relief.

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‘Only the richest estates will be asked to pay – not small, family farms as some misleading headlines have claimed.

‘Look at the detail and you’ll see that the vast majority of farmers will not be affected at all. 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 family farms while also fixing the public services those same families rely on.

‘True to form, the Conservatives are backing wealthy tax avoiders instead of supporting plans to fix the economy that will benefit everyone, including our farmers.’

The NFU and CLA, meanwhile, have both launched protests and campaigns demanding that the policy is scrapped before it even starts, and without doubt there will much more to come on this issue in the coming days, weeks and months.