House of Commons · Urgent Question
05 January 2026 · 60 other contributors
Opened by Victoria Atkins Con Louth and Horncastle
Summarised by AI from the official record, so it can contain mistakes.
Victoria Atkins raised concerns about agricultural property relief and business property relief 2026-01-05 in the House of Commons. A government minister responded. Other MPs also contributed.
Key points
MPs spoke in turn to share their views and ask questions. Here's what each person said.
Opened the debate
Will the Minister confirm the changes to agricultural property relief and business property relief, explain why a U-turn was necessary after significant opposition from farmers and rural communities, provide figures on how many estates will still be affected by these changes, include tenant farmers in the reforms, acknowledge past errors and the impact on families, and apologise for the distress caused?
Question
Why did the Government U-turn on tax reforms? Does it have to do with a Labour Back-Bench rebellion? Can the Minister confirm if tenant farmers are included in these changes?
Minister reply
The change was made after continued listening to representatives of family businesses and the farming community, including the National Farmers’ Union. The threshold is increased from £1 million to £2.5 million. Tenant farmers are not explicitly mentioned but the impact on them needs further clarification.
Question
Does the Minister acknowledge past errors and apologise for distress caused by these changes?
Minister reply
The Government acknowledges feedback from the farming community but does not see an apology as necessary. The current position is seen as a fair and responsible choice.
Question
Does the Minister agree that the changes now make reliefs fairer to family farms while still achieving their purpose of reducing tax sheltering?
Minister reply
Yes, the balance is right. The top 4% of claims accounted for over half the Exchequer cost of business property relief and the top 7% of claims accounted for 40% of agricultural property relief.
Question
Will the Government now scrap the policy in its entirety?
Minister reply
The changes are fair and proportionate. The Liberal Democrats can table amendments but they will not pass as the Government believes raising £300 million from these reforms is legitimate.
Question
Does the Minister agree that Labour’s measures are now well on track to raise food security and help family farmers?
Minister reply
Yes, the Government is supporting sustainable farming with a £11.8 billion fund, along with initiatives such as the environmental land management scheme.
Question
Can the Minister publish the impact assessment done on this change?
Minister reply
Figures are drawn from actual claims and HMRC engagement, showing up to 275 estates would be affected before changes now halved to around 185. These figures are published and included in letters sent to all Members.
Question
Does the Minister agree that these changes show Labour is listening to rural areas and serious about policy development?
Minister reply
The Government acknowledges engagement with MPs on this issue and emphasises its commitment to supporting farming communities.
Question
Does the Minister agree that we also need to tackle supermarkets and unfair practices, and address lots of the long-standing issues to ensure farming profitability? The urgency stems from the urgent need for systemic changes in farming.
Minister reply
I thank my hon. Friend for her work on the Select Committee. My understanding is that Ministers are looking at what more we can do to ensure farmers receive a fair price, while supporting a competitive supermarket and retail system.
Question
What discussions is the Minister having inside government about other policies, such as the policy on rates for public houses in rural areas, to ensure that this error is not made again? The urgency lies in ensuring these issues are addressed promptly.
Minister reply
As the tax Minister, I look continually at what improvements we can make. If there are changes right hon. Members would like to see, they are welcome to write to me.
Question
It is important that we have these conversations with Labour MPs and Members from across the House at every opportunity because this has damaged our farming communities. Does the Minister agree? The urgency stems from repairing the damage done over the past 14 months.
Minister reply
I thank my hon. Friend for her contribution, for her experience and expertise. We are coming forward with a revised position that increases the threshold from £1 million to £2.5 million, significantly reducing tax liability for many estates.
Question
Will the Minister apologise to the farming community for the last 14 months, and recognise that many hill farms in Cumbria will still be hit by this tax? Does this tax not remain an attack on British farming and on food security? The urgency lies in addressing the emotional and economic damage done to farmers.
Minister reply
If we had not made these changes in December, Opposition Members would have been standing here asking us to make them. We are doing it in good time before the Finance (No.2) Bill is voted into law later this year.
Question
I welcome the Government’s decision to amend the thresholds for APR and BPR, but this is only one part of a larger problem. For 50 years, our country has witnessed the gradual erosion of our rural community sustainability, national food security and farm profitability. I look forward to 2026 being the year that the farming sector gets the wider change it needs. The urgency lies in ensuring long-term sustainability.
Minister reply
The Batters review published just a few weeks ago sets out ideas that the Government can take forward to ensure farming is profitable and sustainable.
Question
Is the Minister aware that a significant number of my constituents will still face a significant inheritance tax bill that may prevent them from passing on their farm? If anxious about the scheme being used for tax avoidance, will he reconsider the NFU’s suggestion that there be a clawback mechanism? The urgency lies in ensuring fair and equitable treatment.
Minister reply
We will not be considering the clawback proposals. Instead, we have come forward with changes announced in December, which increases the threshold from £1 million to £2.5 million, reducing tax liability for many estates.
Question
Will this measure equally help those sorts of small businesses, which are vital to the overall wellbeing of the steel and engineering sector in Sheffield? The urgency lies in supporting small firms and family businesses.
Minister reply
The uplift in the threshold will mean that family businesses people wish to pass on will now be subject to a lower tax rate or not have to pay the tax at all in many cases.
Question
I was grateful for the opportunity to meet the Chancellor recently to highlight the impact that changes to APR and BPR would have on farmers in Derbyshire Dales. Since the change was announced, more than 100 farmers have written to me saying how pleased they are about it.
Minister reply
I thank my hon. Friend for his invitation. I will pass it on to the Chancellor of the Exchequer and carefully consider it myself.
Question
Where in the Labour manifesto did it say that there would be any tax restrictions on inheritance for farmers? Did Ministers not promise not to impose such a tax when they were in opposition?
Minister reply
The NFU published statements welcoming the changes that the Government have proposed. We were clear in our manifesto about returning economic stability to this country and bringing borrowing down, which is part of ensuring we do not continue to borrow at excessive levels.
Question
Can the Minister reassure me that he will continue to listen and engage with our farming communities in this way, recognising the value of farming and its contribution to the economy and food security?
Minister reply
I thank my hon. Friend for her strong representation of rural constituents. We are working hard on trade deals to improve access to markets for farmers here in the UK so they can export more of their produce overseas.
Question
Will he take a win for a hard-up Government and pause this policy pending a proper analysis?
Minister reply
Yes, we did discuss this at Treasury questions. We will amend the Finance Bill to increase the threshold from £1 million to £2.5 million, which is expected to raise £300 million for public services.
Question
Does the Minister agree that raising the threshold now achieves a balance between tackling abuse of the IHT system and rising land prices, and raising revenue required for public services?
Minister reply
I thank my hon. Friend for her question. She makes an important point. The top 7% of claims for agricultural property relief accounted for 40% of the Exchequer cost before changes, meaning £219 million in foregone tax revenue that we will now raise from the largest estates to help fund public services.
Question
On behalf of farmers across Chester South and Eddisbury, why did this decision take so long?
Minister reply
The Government wanted to ensure that changes in the Finance Bill were legislated before it was passed. We have continued to listen to farming communities and family businesses. The changes include increasing the threshold from £1 million to £2.5 million.
Question
Does the Treasury pay special attention to avian influenza and African swine fever to protect those family farms going forward?
Minister reply
I thank my hon. Friend for his strong representation of constituents since he was elected in 2024. DEFRA Ministers are alive to the issue and will continue to have conversations with hon. Members.
Question
Does the Minister agree that with the changes made to APR, findings of the Batters review and funding put in place by this Government, we can now turn a corner on that terrible decade for British farming?
Minister reply
I thank my hon. Friend for his comments and representation of farmers in Peterborough. We have taken steps to support farming communities and ensure sustainable practices.
Question
I urge the Minister to impress on colleagues the importance of buying British wherever possible and ensuring that much of the public sector food procurement is done with British farms. The best way to improve farming profitability is by ensuring farmland is not lost.
Minister reply
Thanking my hon. Friend for inviting me to his constituency, I want to work with him on procurement to ensure we can continue to support farmers and farming communities; Ministers across Government will continue to do that in the months and years ahead.
Question
Will the Minister apologise to those farmers for the fear, stress, and cost he has put them through? Will he indicate to many publicans across Staffordshire that the Government are going to U-turn on business rates so that they do not close rural pubs?
Minister reply
The Government have been listening to rural communities, farming representatives, and the representatives of family businesses. We came forward with changes that strike the right balance between ensuring a fair and sustainable tax system while continuing to protect smaller businesses and farms.
Question
Does he agree that where we have landed now strikes a much better balance, one that in relative terms favours small family farms compared with industrial concerns, institutional investors, and those looking to use agricultural property as a means of avoiding tax?
Minister reply
I thank my hon. Friend for his reminder that the previous Government were roundly rejected by the country at the last general election. People voted for change for the better with this Labour Government who will continue to represent and support farming communities up and down the country.
Question
This U-turn comes too late for too many. It is extraordinary to hear Labour MPs saying that their farmers are delighted; mine are sick with relief after 14 months. At the Liaison Committee, the Prime Minister accepted that he knew that some farmers had planned to take their lives or had already done so, yet it still took him well over a week to decide that rural lives matter.
Minister reply
Over the course of recent months—since I have been in Government, from September onwards—Ministers from DEFRA and the Treasury continued to engage with farming communities. As a result of this listening and engagement, we came forward with this change in time for it to be included in the Finance (No. 2) Bill.
Question
Can the Minister assure me that the Government will continue to listen to rural communities like mine?
Minister reply
Yes, I can reassure my hon. Friend that we will continue to listen to, and engage with, the over 150 Labour MPs who represent rural and semi-rural constituencies.
Question
Many farms in Glastonbury and Somerton are run by multi-generational family partnerships, rather than married couples. Those businesses will not benefit from the combined spousal allowance of up to £5 million. Will the Chancellor finally give up and completely leave farmers alone to get on with what they do best: producing food for the nation?
Minister reply
We think that continuing to raise around £300 million from this policy is the right thing to do, so that—alongside the other changes we are making—we can raise revenue in a fair and sustainable way to fund our public services.
Question
Does he agree that this country needs a rural strategy, which this Government should be delivering?
Minister reply
This Government have our farming road map. We have also published the Batters review, and we will be taking forward many of the proposals and recommendations in it to continue supporting profitability and sustainability for farmers and our farming communities.
Question
The past 14 months have been hell for the farmers of Dumfries and Galloway. Will he stop fantasising, like the wealthfinder general, about the money he can take out of agriculture and instead concentrate on helping British farmers to put British food on British tables?
Question
Where is the Chancellor to come and admit the error of her ways? Jobs have been lost, investment has been slashed, and lives have been lost by this grief tax. Will the Minister apologise to the farming community?
Minister reply
As the Minister with responsibility for tax, I am here answering questions about tax. The Government came forward last month with changes increasing the threshold from £1 million to £2.5 million in response to farmers and their representatives.
Question
Will he look carefully at what can be done now to help Welsh family farms maintain their farming tradition, given that previous Conservative Government's trade agreements will lead to limitless meat imports?
Minister reply
The previous Government negotiated poorly on trade deals. Labour has negotiated four new significant trade deals ensuring British businesses access more markets. We will continue to listen to rural communities and support them as they grow.
Question
When I met a number of farmers, all 400 were very concerned about the next phase of this Government’s relationship with rural Britain. Will the Minister ask his officials to put together a team to work closely with DEFRA to ensure that never again in this Parliament will such measures be undertaken as they were last year?
Minister reply
The right hon. Gentleman has mentioned the issue of trail hunting, which was part of our manifesto and animal welfare strategy.
Question
Along with many other Labour Members in rural seats, I have made that case to Ministers directly. What steps will the Government take and what steps can the Minister take, with colleagues, to ensure profitability is at the forefront of our work with farmers?
Minister reply
The Batters review focused closely on this, and we will be looking at its proposals and recommendations, ensuring we can do all that we can as a Government within the constraints to continue improving farming profitability.
Question
Will the Minister undertake not just to apologise to communities like mine but to ensure that the Government will genuinely start listening to rural communities? At the moment, they do not feel listened to or cared for by this Government.
Minister reply
We will continue to listen to rural and farming communities to support them as they seek to grow and invest in their businesses. We have been listening to representatives of farming communities and family businesses that we have come forward with changes.
Question
Can the Minister confirm that they are taking the necessary steps to ensure that we can, in a sustainable and environmentally-friendly way, produce the food that we need in this country?
Minister reply
We need to continue to work in partnership with farmers and their representatives and trade bodies to support sustainable food production in the UK. We are investing £11.8 billion of support over this Parliament.
Question
Will the Minister apologise for the heartache, pain, and suffering that he has caused South Shropshire farmers and businesses, and scrap the tax completely?
Minister reply
We will not be scrapping this tax completely. We have tabled an amendment that the House will have the chance to debate next week in Committee of the whole House on the Finance Bill.
Question
Does the Minister agree that 85% of all farming estates will now be protected from inheritance tax but, importantly, that we will maintain the original principle that tax avoiders should not use land to avoid tax at the expense of hard-working family farmers?
Minister reply
If someone has agricultural or business assets worth £2.5 million, for example, they will now pay £300,000 less in inheritance tax than they would otherwise have paid.
Question
First, why did it take more than a year to listen to farmers’ voices? Secondly, will the Treasury please engage brain before announcing policy in future and listen to and work with farming communities?
Minister reply
We will continue to engage with, listen to, and work with farming communities on policies we are putting forward.
Question
Can the Minister talk further about how the investment of £11.8 billion can help farmers like Richard and Jack Scantlebury in Harlow?
Minister reply
The Government is investing over £11.8 billion to support innovation, agritech, and growth for farming businesses to invest and grow, supporting their communities.
Question
What changed the Government’s mind about this tax? Who made the decision?
Minister reply
Government decisions are collective. The Government listened to farming communities, businesses affected by the £1 million BPR threshold, and representatives of family businesses.
Question
Can the Minister assure that we will take steps to support our farming community without selling them down the river with dodgy trade deals?
Minister reply
The Government has implemented trade deals seeking to support businesses access more markets and continues engagement with the European Union.
Question
Does the Treasury subscribe to the general commitment that all policymaking considers the impact on rural areas?
Minister reply
I can reassure that Ministers will continue to think through impacts on communities when coming forward with changes.
Question
What does the Minister have to say to families who have been forced to shell out thousands on professional services advice?
Minister reply
The Government has listened and raised the threshold from £1 million to £2.5 million, meaning a couple can pass up to £5 million tax-free.
Question
Will the Government take this opportunity to apologise to Gloucestershire farmers for 14 months of torment?
Minister reply
The Government has listened and come forward with a policy proposal that is balanced, raising £300 million from very large estates.
Question
Will it take another 14 months before he hears them and scraps this policy altogether?
Minister reply
We heard what farmers were saying, which is why we are coming forward with the changes announced last month.
Question
Can siblings pass on up to £5.65 million under the allowance?
Minister reply
They can each pass it on up to £2.5 million, and if a farm is owned by a brother and sister, they can pass up to this amount to whomever they choose.
Question
Will the Minister commit to consulting farming communities before making any future changes?
Minister reply
The Government has provided support, such as business rates capped at 15% for many pubs this year.
Question
Will the Minister commit to consulting farming communities before making any future changes?
Minister reply
The Government is committed to supporting farmers and will continue discussions on business rates support.
Question
Why did it take the Government so long to listen to the concerns raised by farmers? Would an apology not be appropriate?
Minister reply
We have listened carefully and made changes accordingly. We think that this is the right change, but we will continue to engage with farming communities on any further adjustments.
Question
Despite the partial U-turn, what incentives can the Minister offer to farmers who are still concerned about investment due to potential liability for inheritance tax?
Minister reply
The policy applies only to estates worth over £2.5 million or £5 million for couples; there are significant incentives to grow and invest in businesses as this tax rate is half of what others pay above the threshold.
Question
Would setting a flat £6 million level for agricultural property relief across the UK help alleviate uncertainty among farmers?
Minister reply
We believe it is right to have the same level of thresholds across the country, maintaining consistency with other parts of our tax system.
Question
Is the Minister sorry for causing unnecessary anxiety among farmers despite his previous reassurances?
Minister reply
The number of estates affected by this change will fall significantly as a result of our recent announcements, reducing tax liabilities for many.
Question
Why were changes to agricultural property relief announced without meaningful consultation with family farmers?
Minister reply
We continued to engage with representatives from the farming community and listened to their concerns, including meetings with specific farmer groups.
Question
What recognition does the Minister have for the emotional and financial cost incurred by farmers due to this 14-month delay in policy changes?
Minister reply
We recognise that many estates will no longer be affected by inheritance tax as a result of these changes, reducing the burden significantly.
Question
Can the Minister provide reassurance that this policy is not likely to change course again in the near future?
Minister reply
The Finance (No. 2) Bill will be law in the coming weeks, ensuring these changes are permanent.
Question
Will the Minister confirm that the Government will not agree to demands for lower food standards as part of a US trade deal?
Minister reply
We will always fight for British businesses and farmers in international deals.
Question
Will the Government publish an assessment of remaining farms that may need to be sold off due to inheritance tax liabilities?
Minister reply
The amendment setting out changes has been laid before the House, and we estimate that about 85% of farming estates will not face additional inheritance tax.
Question
What evidence is there to suggest that £2.5 million realistically reflects the value of a typical family farm in areas with higher land values?
Minister reply
We set these thresholds based on careful consideration and believe they are fair, reducing the number of affected estates significantly.
Government Response
The Exchequer Secretary acknowledges the urgent question from Victoria Atkins regarding changes to agricultural property relief and business property relief. He explains that reforms announced in December were made after careful consideration of feedback from the farming community and family businesses, aiming to protect more farms and businesses while maintaining the principle that valuable assets should not receive unlimited tax relief. The allowance for 100% rate of relief is increased from £1 million to £2.5 million from April 2026, allowing a couple to pass on up to £5 million of agricultural or business assets tax-free. This change, along with other reforms announced at the recent Budget, will reduce the number of estates affected by inheritance tax from an expected 375 to just 185 in the coming tax year, reducing liability for many remaining estates. The Government expects to raise around £300 million in 2029-30 from these changes and emphasises a record investment of £11.8 billion in sustainable farming over this Parliament.