Damian Hinds MP speaks in Westminster Hall

East Hampshire MP Damian Hinds addresses Westminster Hall during a debate about the e-petition on farmers' inheritance tax.

Transcript

00:00When we talk about farming, we talk about food production and sufficiency and security,

00:11we talk about land stewardship, we talk about fairness, we talk about rural communities

00:16and the countryside way of life.

00:18All those things are true and relevant, but this is also a debate about economic growth.

00:23Because economic growth requires productivity gains, productivity gains require investment,

00:29and this policy is clearly going to hit badly investment in the vital rural sector.

00:34That is intuitively obvious because there's a new liability that these agricultural businesses

00:39have to plan for.

00:40But it also chimes entirely with what I hear in and around Hampshire from agricultural

00:47suppliers, from machinery dealers and so on, with redundancies, with depot closures, with

00:52projects being cancelled.

00:54And my question to the Minister is, what monitoring is the government doing of actual

00:58investment in the agricultural sector and the harm that that may do to productivity?

01:02Now it's often said, and it's been said again today, that farming is not like a normal business.

01:09My East Hampshire farmers are very quick to remind us it is a business and you have to

01:13be able to make a living, but it is abnormal in one key sense.

01:18Economists talk about normal profit and supernormal profit, there's no such thing as subnormal

01:22profit, because if you're not making enough to make the thing economic, the idea is you

01:26wouldn't be in the business.

01:27But many of these are.

01:29These are farmers who accept a sub-economic return on capital employed.

01:33And they do that because yes, it is a business, but it's more than a business.

01:38It's more than a job, it's more than just an investment.

01:41And Ministers should not expect the same approach to be taken if the family farms are broken

01:46up and replaced by something else.

01:49Now repeatedly the government have said, oh, don't worry because the effect of this will

01:52be reduced because couples can pass on assets between them.

01:55But we know because of the written question tabled by my right honourable friend, that

02:00actually only half of farmers are in couples.

02:04Almost half are individuals, and this is going to affect far more farms than I think the

02:09Treasury, to be fair to them, the officials even realised to begin with, and certainly

02:13the numbers that we have discussed in this House.

02:16I say to the Minister, there are reasons why this relief was brought in in the first place.

02:20It was not a loophole, it was not an accident.

02:23It was brought in to achieve a purpose, and there are reasons to why it was retained all

02:28these years.

02:29Now, Sir Edward, it is not unheard of for a government to discover that when it brings

02:33in a tax, its effect in practice is not quite as they expected when they did the spreadsheet

02:39and when the Minister signed off the sub.

02:40It is not too late for this Minister, for this government, to change their minds, to

02:45make significant changes, there's no shame in it, and I urge him to do so.

02:50Sam Rushworth.