Labour will spurn political will from rural areas 'without inheritance tax rethink'

Since the election last July, the Liberal Democrat MP has heard evidence from farmers, politicians and border experts on everything from biosecurity to the closure of the Sustainable Farming Incentive.

Yesterday, the Efra Committee - which is made up with two-thirds of Labour MPs - urged the Government to pause and delay the changes to inheritance tax, which would see a 20 per cent rate imposed on farms worth more than £1m.

In a wide-ranging interview with The Yorkshire Post, Mr Carmichael put the blame at the door of No11 Downing Street, saying: “The Treasury is drunk on power with a majority of 172.

“The root cause is the unwillingness of Treasury to listen.

“The Treasury clearly does not understand the nature of family farm financing.”

Rachel Reeves, the Chancellor, has said the policy is designed to stop the super rich buying up farmland to cut their inheritance tax bill.

However, Mr Carmichael said that the current policy - which offers a discounted rate - still incentivises this, while harming family farms.

“The Labour Party has had representation in rural communities that they have not had for decades.

“That one piece of tax policy risks undoing all of that.”

Mr Carmichael urged the Government to listen to its own backbenchers, who he says have been lobbying against the inheritance tax changes.

“What we’re saying is stop it, put it back for a year, do the proper impact assessments, the proper consultations that you should have done in the first place, and find a way of doing this so that you catch the super rich,” he explained.

“Fix it and you then open up the bandwidth for the government to come up with some coherent articulation of what they want to do with farming.

“For those Labour MPs in farming communities, the publication of the select committee report will be quite a significant event.”

York and North Yorkshire Mayor David Skaith, who has commissioned an assessment of the policy as part of a wider agriculture review, said a pause “could be a good idea”.

His own report was completed this week, and he said his team were currently combing through it to “understand how I can best support the sector”.

Mr Carmichael’s committee has also been conducting an investigation into food biosecurity at the border.

Following a foot and mouth outbreak in Germany on January 10, it heard from senior border officials that at-risk shipments were able to autoclear the border for six days, as the IT system failed to update.

However, only in the last month has Defra admitted that at least three pieces of cargo from Germany made it through border controls, and it has also banned personal imports of meat and dairy from Europe.

Mr Carmichael said this shows that biosecurity measures “are not up to scratch”.

He said he had sympathy that the Government is building a completely new post Brexit system, but criticised Defra for not being “open and honest”.

“It effectively took the select committee three months to get a proper account from Defra of those things that had slipped through the net,” he explained.

“If you put that back into the wider context of how Defra is seen as a department, that's just another thing where farmers say: ‘How can we have confidence in these people?’”

A government spokesperson said: “Our commitment to supporting our farmers and protecting Britain's food security is steadfast - which is why we are investing £5bn into farming, the largest budget for sustainable food production in our country’s history to put healthy, nutritious food on our tables.​

“Our reforms to Agricultural and Business Property Relief are vital to fix the public services we all rely on.

“Three-quarters of estates will continue to pay no inheritance tax at all, while the remaining quarter will pay half the inheritance tax that most people pay, and payments can be spread over 10 years, interest-free.”