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