Farming inheritance tax row: Labour MP tells Northern Ireland farmers it is time for discussion about National Security implications of threats to UK food supply

The argument was made yesterday at Parliament’s Northern Ireland Affairs Committee, where witnesses from the farming community were giving evidence about threats to the viability of farming.

Both the Stormont Department of Agriculture and the Ulster Farmers’ Union (UFU) estimate that 50% of NI’s 24,000 farms are under threat by recent changes will see all farm assets worth over £1m subjected to inheritance tax.

Giving evidence to MPs were UFU president William Irvine, Richard Beattie, president of the Young Farmers Clubs of Ulster, and Peter McCann, Northern Ireland correspondent of the Irish Farmers Journal.

Their appearance was in the wake of the Labour government announcing a shock hike in inheritance tax on farms across the UK, which the UFU argues will disproportionately hit Northern Ireland farms because land values are higher here while farms are much smaller and tend to be family owned.

Labour MP David Smith asked whether farmers should be involved in forming the government’s new defence industrial strategy in light of world events.

Mr Irvine was certain they should.

“The world is quite frightening at the minute from the potential of a war, weather events are getting more extreme, and medical people would say that there is the potential of another pandemic,” he said.

However he said that only “lip service” was paid to food security in the UK.

Mr Beattie added that in America “food security is national security ... whereas here we're only 58% self-sufficient”.

He noted that in the 1930s, before the outbreak of war, the UK had been “very relaxed” about its food security.

The Labour MP told the panel it was “worth further discussion”.

The panel said there had been no consultation on the changes, which could have avoided many problems.

Mr Irvine said he discussed the matter with a member of the Agricultural Law Association in Northern Ireland.

While government has issued formal advice on how to raise the tax threshold from £1m to £3m, the lawyer advised him: “That's all very well, but in my 27 years, I know of no family that would have ticked all those boxes to have achieved the £3m threshold.”

Lib Dem MP Dr Al Pinkerton asked the panel what suggestions they would make to government.

Mr Irvine replied that the tax measures won’t stop big entities buying large blocks of land, as it will still be profitable for them.

Mr McCann said the best option was to raise the taxation threshold, potentially to £20m, but then to take something akin to a capital gains tax approach to any abuse of the system.

Then if the next generation sells the farm they inherited, the government could “hit them with inheritance tax, because they will have the cash to pay for it”.

Mr Beattie said that a similar system is in operation in Germany.

Mr Irvine said Jim Shannon MP had facilitated a productive meeting on the issue with DEFRA Secretary Steve Reed on Monday, who had in turn agreed to set up a meeting between the UFU and Chancellor Rachel Reeves.