Labour MP becomes first to attack party’s inheritance tax raid on farms

Markus Campbell-Savours, the Labour MP for Penrith and Solway, said he would rebel against Rachel Reeves’ Budget measure to extend inheritance tax

A Labour MP has become the first to break ranks and declare he would rebel against his party’s controversial ‘farm tax’.

The move will increase pressure on the chancellor Rachel Reeves to U-turn on her inheritance tax raid, which critics say could sound the death knell for many family farms.

Markus Campbell-Savours, the Labour MP for Penrith and Solway, said he was "not prepared to break my word" to farmers in his constituency.

As MPs prepared to vote on a non-binding Conservative motion against the tax, he added: "If today was the real vote I would vote against the government's plans."

Farmers protesting in central London over the changes to inheritance tax rules (Andrew Matthews/PA) (PA Wire)

Ms Reeves is facing a revolt in rural England over her decision to extend inheritance tax to family farms.

Thousands of farmers brought Westminster to a standstill last month when they descended on the capital to voice their opposition to the changes.

They mean that farms valued at £1m or more would be liable for 20 per cent inheritance tax.

The Treasury says that, with tax allowances included, only farms worth £3m and above would be affected, just 28 per cent of family farms. But official Defra figures appear to suggest as many as 66 per cent could be hit.

Mr Campbell-Savours told MPs: "Let me be clear, if today was the real vote I would vote against the Government's plans.

"I'm no rebel, I'm a moderate. But during the election I read what I thought were assurances from my party that we had no plans to introduce changes to APR (agricultural property relief). On this basis I reassured farmers in my constituency that we would not. Now, I'm simply not prepared to break my word.

"I'm told that there is no Labour MP in the country with as many farms as I have in Penrith and Solway and I hope my colleagues will understand my feelings on this.

"However, we're debating a frankly irrelevant motion from the Conservative Party, a motion which fails to acknowledge how they failed to deliver for my farmers."

The Conservative motion said figures from the National Farmers' Union suggest that "some three-quarters of farms will be affected".

Shadow environment secretary Victoria Atkins said her party had tabled the motion to give Labour MPs representing rural seats "time to reflect and consider whether they can continue to support this vindictive tax".

She said: "Before ambitious backbenchers, or indeed (Treasury minister James Murray), get to their feet and accuse these farmers and us of scaremongering - something they've been happy to do in the past - think on, discover some humility and compassion and ask why tens of thousands of decent, hard-working and sensible people across the United Kingdom know that the Chancellor has got it so wrong."

Ms Atkins added on farmers: "They feed us and now they need us. Labour MPs need to join us and axe the family farm tax."

A Treasury minister also batted away calls to U-turn if the policy turned out to affect more farms than the government expects.

Reform UK deputy leader Richard Tice asked: "Will the minister agree, given the massive discrepancy in the impact of this policy, that if the data shows in 12 months, in 24 months that the Government had got this catastrophically wrong, that you will actually revisit this policy and do a U-turn?"

Treasury minister James Murray told him: "When we approach policies in Government, we thoroughly test them and consider the detail of that policy. We consider the data of that policy and we make sure that any conclusions we draw are based on the correct set of data."

MPs rejected the Conservative motion on UK farming and inheritance tax by 339 votes to 181, a majority of 158.