York and Yorkshire MPs have clashed in Parliament over government plans to introduce inheritance tax on the family farm, as announced in last week’s budget.

In a debate in parliament this week, the minister for food security and rural affairs, Daniel Zeichner (Lab-Cambridge), explained that families will be able to access 100% relief for the first £1 million and 50% relief thereafter—an effective 20% tax rate.

“That means that an individual can pass up to £2 million, and a couple up to £3 million between them, to a direct descendant, inheritance tax-free.”

The minister continued: “Seventy-three per cent of agricultural property relief claims are for less than £1 million. The vast majority of farmers will not be affected. They will be able to pass the family farm down to their children just as previous generations have always done."

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“It is a fair and balanced approach that protects family farms while also fixing the public services that those same families rely on. It is part of a Budget that will restore economic stability and begin a decade of national renewal.”

However, both Thirsk and Malton MP Kevin Hollinrake MP and Charlie Dewhirst, who represents Bridlington and the Wolds attacked the move, whilst York Outer MP Luke Charters defended it.

Mr Hollinrake has previously called the introduction of introduction of inheritance tax on family farms and businesses as ‘devastating for local communities’ saying they will lead to the closure and sale of many such businesses.

The MP has since met with local farmers, as well as Wetherby and Easingwold MP Sir Alec Shelbrooke on the issue, with both urging people to sign the nationwide Stop the Farm Tax petition.

In the House this week, Mr Hollinrake said he met farmers in Bedale on Friday and “the only transition they can see is the transition from family farms to the state.”

He asked the minister: “Does he realise that the farming industry is one of the least profitable sectors in the country? The return on capital employed is 0.5%—that is the Government’s own figure—and that is around a 20th of the typical profit margin in the UK. Other than by some warped socialist ideology, how can he justify taking away 40 years of profits for the typical farmer?”

The minister replied the tax was needed to ‘maintain stability.’

Earlier, Charlie Dewhirst MP said farmers in his constituency were “shattered by this announcement.”

The Bridlington and the Wolds MP added: “The impact on my community will be devastating. I ask the Minister today to do the right thing and withdraw these plans.”

However, York Outer Labour MP Luke Charters said: “I am proud to represent many wonderful farming communities. The young farmers I meet tell me that one of their biggest challenges is accessing rural mental health services. Does my hon. Friend welcome the record £22 billion extra going into the NHS, which will support access to rural mental health services?”

Minister Zeichner concluded the debate and added: “The likely outcome will be that people will put arrangements in place to pass on their farms at the appropriate time, pulling more younger people into farming, which will be a good thing.

“My overall message to farmers across Britain is, “This Government are on your side. We will support you. Look at the agricultural budget and the money that has been paid out of the flood budget. We are with you. Don’t listen to these people.”