Clause 1
Ruth Jones Excerpts(1 month ago)
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Gareth Davies
That is exactly right. I will let the Minister address that point, but let me pay tribute again to my hon. Friend, who has been a forceful champion for farmers across the country and has consistently raised these issues. That goes back to my point about the warnings provided to the Government about the practical implications of the changes, with their impact on family farms in particular. They were ignored until this point. The Minister will have to explain why that was.
Indeed, the Chartered Institute of Taxation has warned that schedule 12’s failure to allow allowances to be allocated to specific property could undermine many wills as currently drafted. This creates a tremendous amount of uncertainty, disputes and real hardship.
Where the cap is exceeded, the first inheritance tax payment will fall just six months after death. If that deadline is missed, the estate will be hit with a punishing interest rate. Within six months, family farms must secure probate, value complex agricultural and business assets, calculate the liability and then raise the cash—often by selling parts of the estate to make the first payment. The NFU has been clear that expecting probate within six months is “unrealistic” given the complexity of valuing agricultural businesses, as my hon. Friend pointed out. In practice, families and personal representatives will miss the deadline—through no fault of their own—without a confirmed tax bill and without the funds to pay for it.
The Government’s expectation is simply unrealistic. The approach is flawed, and the window must be extended. If clause 62 is agreed to and the Government do not finally concede, family farmers and businesses in my community of Lincolnshire and those across the country will not rest until these changes are fully reversed. The only consolation I can offer farmers and businesses watching the votes closely tonight—they will be watching every single one—is that the next Conservative Government will scrap these immoral changes.
Ruth Jones (Newport West and Islwyn) (Lab)
I rise to speak on schedule 12. I greatly welcome the Government’s changes to the proposed agricultural property relief and business property relief thresholds. As Chair of the Welsh Affairs Committee, I am proud of the work that my Committee has undertaken on reviewing the Welsh farming industry and the report with clear recommendations that we produced before the Budget. I also thank the Treasury for its swift response to our report as well as the changes that it has made to the thresholds. These changes show that the Government are listening not just to farmers but to the Welsh Affairs Committee and Welsh Labour MPs.
The new higher thresholds are a win for Welsh farmers. Raising the allowance for 100% relief from £1 million to £2.5 million will ensure that the changes to inheritance tax are properly targeted at the wealthiest estates while ensuring that smaller-scale family farms remain protected. Couples will now be able to pass on £5 million-worth of agriculture or business assets between them, tax free. This additional relief will have a particularly significant impact in Wales, given its specific context, which is very different from England. This was a key finding of the Welsh Affairs Committee’s recent inquiry.
Ben Lake (Ceredigion Preseli) (PC)
I commend the hon. Member on her leadership of the Welsh Affairs Committee. She rightly said that the Committee did stellar work on reviewing the potential impact of the proposals on agriculture in Wales. Further to her point about the unique nature and structure of the agriculture industry in Wales, does she agree that, regardless of the changes that the Treasury has introduced, it would do well to undertake a specific Wales-wide impact assessment of these changes?
Ruth Jones
Absolutely; the hon. Member makes a point that I am going to come on to later.
Welsh farms are typically smaller than those in England, with 55% being less than 20 hectares, and 66% of Welsh farms are cattle and sheep farms situated on hilly or mountainous terrain, compared with just 12% in England, which also has a much higher concentration of arable farming. This leaves Welsh farms with the lowest average income of the four nations—£18,000 lower than in England. Welsh family farms are also a cultural bastion of the Welsh language, with almost half the people working on Welsh farms speaking Welsh as their first language—more than double the Welsh average.
While the Government’s changes to APR and BPR are likely to disproportionately benefit Welsh farmers, the diverse nature of farming across the four UK nations needs to be considered when making such significant changes. That is why the Welsh Affairs Committee continues to call for the Wales-specific impact assessment of the Government’s changes to inheritance tax that the hon. Member for Ceredigion Preseli (Ben Lake) just referenced. It is critical that those with the broadest shoulders pay their fair share of tax. That is why it is important that we close the inheritance tax loophole that allowed wealthy investors to purchase agricultural land as a way of avoiding tax.
Ensuring that the tax burden falls fairly relies on effective data, however. The Welsh Affairs Committee and I remain concerned about the availability and accuracy of the data used to justify the thresholds set for APR and BPR, particularly in regard to Wales. The Government have thus far been unable to provide any estimate of the number of Welsh farms that will be affected by these reforms to inheritance tax. Such data is critical when considering any potential impacts on the Welsh farming sector, given its greater financial precarity and reliance on low-income, family-run livestock farms. We cannot afford to be complacent. I hope that the Government will ensure that they take specific account of the unique cultural, environmental and economic circumstances of farming in Wales when making such significant policy decisions. I wholeheartedly support the changes to the APR and BPR as laid out in the Government’s amendment to schedule 12.
The Chairman of Ways and Means (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Oral Answers to Questions
Ruth Jones Excerpts(7 months, 1 week ago)
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Rachel Reeves
It was the hon. Member’s Government, when they were on this side of the House, who froze those allowances, taking more money out of the pockets of working people. Despite that, they left a £22 billion black hole in the public finances. I will take no lessons from Conservative party, which has opposed everything that is needed to invest in our public services. We are in the mess we are in because of the damage that it caused.
Ruth Jones (Newport West and Islwyn) (Lab)
Euan Stainbank (Falkirk) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
The Government recognise the critical contribution that transport makes to our growth mission. The Government increased the capital envelope by over £100 billion at the autumn Budget last year, and by a further £13 billion at the spring statement. Taken together, that represents a big increase in capital investment. As a result, the transport capital budget, excluding High Speed 2, will increase by 1.9% per year in real terms over the spending review period. That investment will improve connectivity in our towns, cities and villages, reduce journey times and increase transport reliability. For areas of transport that are devolved, it is up to the Scottish and Welsh Governments to allocate their funding and be accountable to their respective Parliaments for those decisions.
Ruth Jones
I welcome the announcement in the spending review that railway projects in Wales, including five new stations east of Cardiff, will receive an extra £445 million in funding over the next decade. Will the Chancellor provide more detail as to how the money will be specifically allocated and when work will begin?
Rachel Reeves
It was a pleasure to be in Cardiff just after the spending review to look at the difference made by the investment that the Labour Government are putting into transport in Wales. The spending review and the infrastructure strategy recognised Wales’s long-term infrastructure needs and how they have been neglected for too long by the Tory party. We delivered at least £445 million for rail enhancements, which provides funding for continuing to develop and deliver the stations identified in the Burns review, including Newport West and Somerton. Plans for future rail investment in Wales will be made in close consultation with the Welsh Government and through engagement with the Wales Rail Board.