A Cheshire MP has spoken in Parliament against planned changes to inheritance tax rules for farms.
Esther McVey said families who had farmed for generations could be forced to sell off their farms as a result of the new rules due to come into force in April 2026.
The Tatton MP said farmers in her constituency had told her the changes due to be brought in by the Labour government would have a devastating impact on them and for wider food security in the UK.
Labour insisted the vast majority of farmers would not be affected by the tax changes.
Under the new rules, any farm worth more than £1m would be subject to 20% inheritance tax – which is half the usual inheritance tax rate.
Farms were previously exempt, however, meaning they paid no inheritance tax when they were passed from one generation to the next.
As a result, many farmers have complained they could not survive the planned increase, arguing their only way to pay the tax bill would be to sell off some of their land – which would make their business unviable.
‘Asset-rich, cash poor’
Speaking in Parliament, Ms McVey said: “Farmers are asset-rich but in reality they are cash poor, and that is the crux of the matter.
“A seventh generation farmer told me she was hoping to pass her farm on to the eighth generation, but that now does not seem possible because if they have to sell a proportion of the land, which they will, that will make the whole farm unviable.
“Another farmer of mine, Richard Shepherd, a few years ago built a state-of-the-art cow cubicle shed for their dairy herd.
“A piece of modern technology he believed would prepare the farm for the challenges of the 21st century, investing in methods to produce high-quality, affordable and nutritious food—the type of innovation this country will come to rely on for food security in the future.
“However, now, with this change from the Labour government, he will owe between £600,000 and over £1 million in inheritance tax.”
Ms McVey also told the House of Commons about concerns raised by accountant Richard Barnett – who works with farmers in Cheshire.
She said Mr Barnett had told her the new tax rules would lead to an increase in the numbers of people wanting farm land up to the value of £1 million, to avoid inheritance tax.
Ms McVey added that Mr Barnett has said this, in turn, would lead to a reduction in the amount of revenue the treasury might generate from the policy as well as an increase in land prices.
She accused the government of “breathtaking ignorance” when it came to farming and rural issues and said that despite being told by farmers about the devastation it could cause, the Labour government had “put their head in the sand” by continuing to pursue policy.
The government claims about 27% of farms would be affected by the new inheritance tax rules.
The NFU believes the figure is far greater however, and this week hundreds of farmers took to the streets of London in their tractors to make their voices heard on the issue.
Ms McVey said the Labour Party was failing in its election manifesto promise to champion British farming and urged the government to rethink the policy.
