Upper Bann MP Carla Lockhart has urged the Labour government to support the agri-food sector rather than “powering ahead” with inheritance tax reforms.
Speaking in UK parliament recently, she said: “Farmers are the backbone of our economy and the people who work tirelessly to feed the nation.
“At a time of ongoing conflict around the globe, when the supply of daily living necessities like food and fuel are under threat, forcing prices to unprecedented heights, the government should be firmly focused on protecting the agri-food industry.
“Instead, its ill-thought-out policies are risking food security by jeopardising the long-term sustainability of family farms across the UK.”
The Democratic Unionist Party’s agriculture spokesperson went on to discuss the inheritance tax change introduced by Rachel Reeves, the UK’s Chancellor of the Exchequer.
Inheritance tax
The tax legislation, expected to be introduced in April, will place a cap on inheritance thresholds of £2.5m.
This allows spouses or civil partners to pass on up to £5 million in qualifying agricultural or business assets between them before paying inheritance tax, on top of existing allowances.
Lockhart acknowledged that the government had “partially increased” the agricultural and business property relief threshold from £1 million to £2.5 million, but said the move would “still leave many farms exposed”.
She said: “Despite the pre-Christmas partial U-turn, thousands of small and medium-sized family farms will still be heavily impacted.
“In Northern Ireland, where the value of farmland is proportionately higher than anywhere else in the United Kingdom, DAERA (Department of Agriculture, Environment and Rural Affairs) estimates that 4,500 farms, mainly within the dairy sector, will still be affected.”
‘Discouraging investment’
The MP said that the uncertainty surrounding the inheritance tax and business property relief changes has been “discouraging investment within the agricultural sector”.
She said: “Families are delaying decisions about expanding their businesses, ordering agricultural machinery, improving farm infrastructure or investing in new technology.
“That hesitation ripples throughout the rural supply chain and has a real and immediate impact on the wider agricultural economy.
“Many businesses who rely on farmers for their ‘bread and butter’ trade are reporting a decline in turnover.”
The MP said that that “additional tax burdens could leave farmers and other family firms feeling further disadvantaged compared with businesses in Great Britain”.
