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Bid to soften change rejected by Treasury

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Bid to soften change rejected by Treasury

A bid by the department for rural affairs to soften changes to inheritance tax for farms – possibly by exempting some older farmers – has been rejected by the Treasury.

The Treasury said there would be no change or mitigations to the policy, which will see an end to inheritance tax exemption for some farms.

From April 2026, farms worth more than £1m will face an effective inheritance tax rate of 20% – half the usual rate of 40%.

BBC Newsnight understands that the Department for Environment, Food and Rural Affairs (Defra), which represents the interests of farmers in government, believes it was not properly consulted over the change.

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The department was informed about the policy the night before it was announced in the Budget.

The move has been branded “disastrous” by the National Farmers’ Union (NFU), with some farmers warning it would decimate the countryside.

Defra suggested softening the policy to exempt some older people, possibly those over the age of 80.

The April 2026 start for the policy means they may not have time to make use of existing rules to skip inheritance tax by passing on an asset seven years before death.

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But this suggestion has been dismissed by the Treasury, which said it had taken “a fair and balanced approach”.

Since its introduction in 1984, agricultural property relief (APR) has allowed small family farms – including land used for crops or rearing animals, as well as farm buildings, cottages and houses – to be exempt from inheritance tax.

The Treasury said 40% of APR had been going to “the 7% wealthiest claimants”, and that it had “made a difficult decision to ensure the relief is fiscally sustainable”.

It put this against a backdrop of “public services crumbling [and] a £22bn fiscal hole inherited from the previous government”.

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“Around 500 claims each year will be impacted and farm-owning couples can pass on up to £3m without paying any inheritance tax – this is a fair and balanced approach,” a spokesperson added.

There are divisions in government over the change.

Some ministers believe it will only have an impact on relatively wealthy farmers – a couple using all their inheritance tax benefits will be able to pass on a £3m farm tax free. Any inheritance tax charge on farms can be paid over 10 years.

But other ministers believe the chancellor is in danger of undermining Labour’s relations with rural Britain while raising a relatively small amount of money.

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The change could raise around £560m.

Some sources in government have expressed concerns that the chancellor is creating unnecessary grief over a change that is not, in relative terms, a huge money spinner.

There are concerns that the change – which has proved controversial among farmers since its announcement – could become “totemic” in rural Britain.

The NFU warned it would “snatch away the next generation’s ability to carry on producing British food” and see farmers forced to sell land to pay the tax.

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A rally to protest against the plan will be held in Whitehall next Tuesday.

There is also a dispute around the figures used to calculate the changes.

Farmers leaders have been told by Defra that the figures come from the Treasury and not their department.

Tom Bradshaw, the president of the NFU, said that Defra figures showed the changes would have an impact on 66% of estates.

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The Treasury said the figure was 28%.

Clive Bailey, founder of the Farming Forum which is also organising a protest in central London next week, said on Thursday that any change to the new rules “would be a step forward”.

Mr Bailey, who farms in Staffordshire, said the suggested exemption should cover people much younger than 80.

Compared with the wider population, farming sees “a lot of people who should have retired already still working”, he told BBC Radio 4’s Today programme.

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He called the inheritance rules “so poorly thought out”.

The cost of running a viable farm exceeded £1m, he said, arguing that the government needed to sit down “with real family farmers or agricultural economists”.

“We’re not special, but the economic circumstances of farming are very different to other industries.”

A Defra spokesperson said:

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“With public services crumbling and a £22bn fiscal hole inherited from the previous government, we have made the difficult decision to reform Agricultural Property Relief in a balanced and fair way.

“All ministers support the policy and it will not change.”

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Wes Streeting faces pushback over assisted dying stance

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Wes Streeting faces pushback over assisted dying stance

Health Secretary Wes Streeting is facing pushback from senior Labour figures over his repeated strident interventions against a move to legalise assisted dying in England and Wales.

MPs will have their say on the issue later this month – in what is known as a free vote, where they are not instructed how to vote by their parties.

The government is attempting to maintain a neutral stance.

Cabinet Secretary Simon Case, the UK’s most senior civil servant, told ministers last month they should “exercise discretion and should not take part in the public debate”.

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But Streeting’s view became public after he told a large, notionally private, meeting of Labour MPs what he thought.

Since then, in interviews, he has repeatedly set out his objections.

This week, he suggested a change in the law would mean the NHS would have less money for other things.

Some of those hoping for a change in the law fear the health secretary’s interventions risk putting plenty of Labour MPs off backing it.

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Others, some publicly, some privately, are irritated with Streeting and think he ought to wind his neck in a bit.

The bill, which was published this week, would allow terminally ill adults expected to die within six months to seek help to end their life.

Two doctors and a High Court judge would have to verify that they were eligible, and had made their decision voluntarily.

Kim Leadbeater, the Labour MP behind the bill, said she found some of Streeting’s remarks “quite disappointing and quite upsetting”.

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And Labour peer Baroness Hodge, a former minister, told the BBC’s Politics Live programme that Streeting should take account of what the cabinet secretary had asked of ministers and “hold fire a little bit”.

She added: “His argument about costs? We spend most of the NHS money on the last months of life.”

And now, Streeting’s cabinet colleague Liz Kendall, the work and pensions secretary, has spoken out in support of the bill, telling me: “I have always believed in giving people as much choice and control as possible.”

She added: “With all the right safeguards that this bill has, I believe it is an important step forward on such a difficult issue.

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“Fewer and fewer of us have the sudden deaths that used to happen in the past. People often have a long and slower death. And we do need to talk about what makes for a good death.”

Kendall insisted she was “a great champion of Wes Streeting”, but pointedly added “this is something people have different views about”.

One of Streeting’s team told me: “Wes has approached this issue in a genuine, thoughtful and considerate way, setting out his own view while respecting others’ views.”

They said he had initially been asked his views in a private meeting of Labour MPs, but once that leaked, he felt it necessary to explain publicly why he had come to his opinion.

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The debate highlights the peril for the government, even when it grants all its MPs, including ministers, a free vote on an issue.

Were the bill to pass, would that leave the health secretary unable to carry on in his role?

His team insist he would carry on, and point out other ministers in the health department disagree with him, so it is certain some health ministers will find themselves on the losing side of the argument.

And what about the prime minister? He has previously set out his support for a change in the law, but will he make that view explicit again this time?

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And how awkward could it be if he found himself on the losing side of the argument, were hundreds of his own MPs to oppose a change?

The first vote on the issue will take place in the Commons at the end of the month.

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‘Desperate’ parents taking baby formula risks

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PA Media Chris Webb and wife Portia with baby Cillian at the count of the Blackpool South by-election in 2024PA Media

Blackpool South MP Chris Webb became a father in February

The high cost of baby formula is forcing many parents to “resort to extreme and unsafe measures to feed their babies”, an MP has told the Commons.

Blackpool South MP Chris Webb, himself a new parent, is calling for tighter pricing regulations on the sale of baby formula, amid concerns about rising costs and out-of-control marketing to new parents.

A recent report by the Competition and Markets Authority (CMA) revealed the cost of some brands had risen by more than a third in just two years.

Mr Webb, who has a nine-month-old son, raised the issue in his first adjournment debate as an MP.

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He told the Commons: “As the father of a nine-month-old baby, I know how emotionally charged and difficult it is to navigate infant feeding.

“I have seen that with my own son, who would not take to breastfeeding, so we had to resort to infant formula,” he said.

He said in his constituency alone, where child poverty has increased by 30% in the past year, and with the average tub of formula costing a “staggering £14.50” many parents were “resorting to extreme and unsafe measures to feed their babies.”

“A black market has sprung up for infant milk, and it is one of the most commonly shoplifted items,” he said.

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The MP also said he regularly read “heart-breaking posts” on local forums from parents in “utter despair” begging for baby food donations to tide them over until the next pay day.

Photos of baby products in The Food Warehouse - run by Iceland.

The MP said many parents are despairing at the high cost of baby formula

He said that by seeking cheap or free milk online, parents risked feeding their babies a product “potentially laden with bacteria”.

The MP also said hospital admissions for under-ones with gastrointestinal problems are almost treble the national average in Blackpool

“Dehydration – a common complication of gastroenteritis – is a particularly serious risk, and it is exacerbated by parents’ inability to access or properly prepare formula,” he said.

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As a volunteer for Blackpool food bank for more than seven years, he said he had witnessed first-hand how urgent progress is needed.

In a call to arms, he added: “I invite ministers to consider the voices of parents in Blackpool, who are at the sharp end of this price crisis.”

The CMA’s recommendations include the government issuing NHS-branded baby milk and removing branding from baby milk in hospitals.

Stephen Kinnnock, Minister for Care, thanked Mr Webb for raising the issue.

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He said: “I want to assure him that we are committed to addressing the concerns raised by the CMA so that the infant formula market delivers the better outcomes that parents deserve.”

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Neil Gray ‘sorry’ after chauffeur trips to football

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Health Secretary Neil Gray apologises for Aberdeen football games ‘error’

Health Secretary Neil Gray has said he is sorry he did not go to a “wider range” of football matches after using ministerial cars to attend four Aberdeen games.

The Dons fan was driven by a chauffeur to watch three games at Hampden, as well as a home match. He registered the events as official government visits.

In a statement to parliament, Gray said he should have attended a greater variety of games to avoid giving the impression he was acting “more as a fan and less as a minister”.

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The Scottish Conservatives accused him of having a “jolly to watch the football” at taxpayers’ expense.

Gray also said he had used the chauffeur service for five Scotland games.

The health secretary told MSPs that he had been joined by a family member or guest at six of the matches. He said that they travelled with him but at no additional cost to the taxpayer.

Gray said all the engagements were “official ministerial business”, and that he had not planned to attend only Aberdeen club matches.

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He said: “I should have made sure that I attended a wider range of games and not just Aberdeen, and I apologise for my error.”

The SNP MSP added: “I am a football fan. I follow Aberdeen. But I should not have allowed the impression to be given that this played any role in my engagements and I am sorry for my error.”

PA Media Ronaldo at Hampden Park between two Scotland playersPA Media

The health secretary was driven in a ministerial car to Scotland v Portugal at Hampden in October

Gray was given VIP tickets to Aberdeen matches at Hampden three times, once in his current role and twice when he was wellbeing economy, fair work and energy secretary.

The Airdrie and Shotts MSP watched Aberdeen v Hibernian in Scottish League Cup semi-final in November, and the final against Rangers in December, as well as the semi-final of the Scottish Cup against Celtic in April.

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The minister was also driven to an Aberdeen home league match against Livingston in May during a day of ministerial visits in the city.

He said he was a guest of the SPFL at the first two matches, and of the SFA at the Celtic match.

Gray told MSPs he discussed a range of issues at the Hampden matches, including pyrotechnics, business engagement in sport and the SPFL’s work to support community wellbeing.

In March 2022, while serving as minister for culture, Europe and international development, Gray used the chauffeur service to go to Scotland matches against Ukraine and Poland.

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After becoming economy secretary, he was driven to two European Championship qualifiers against Georgia and Norway in June and November 2023.

Last month, he attended Scotland’s game against Portugal at Hampden.

‘Taxpayers duped’

Scottish Conservatives called for a parliamentary investigation under the ministerial code.

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Deputy leader Rachael Hamilton accused Gray said: “Taking family members and guests to these games, in limos paid for by the taxpayer, confirms beyond all doubt that these meetings were not government business, but a jolly to watch the football.

“Taxpayers have been duped and Neil Gray must now refund them in full.”

Gray said the ministerial code makes clear that family members or guests can accompany a minister.

Labour MSP Neil Bibby said the minister’s attendance at the Aberdeen v Livingston game at Pittodrie has “raised particular eyebrows” and asked for further details of the discussions to be published.

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Scottish Greens co-leader Patrick Harvie said the “real issue” was the minister’s use of a government car and there would not have been a problem had he used public transport.

Speaking to journalists following Gray’s statement, First Minister John Swinney said he would not refer the health secretary for an investigation under the ministerial code.

He said the statement had addressed “all the issues that need to be considered” and he now considers the matter “closed”.

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Donald Trump: I don’t think he is racist

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Donald Trump: I don't think he is racist

Wales’ first minister has said she does not think the incoming US president Donald Trump is racist.

During a BBC radio phone-in, Labour’s Eluned Morgan said: “There were a hell of a lot of black people and Latinos who voted for him in the election.”

Her words contrast with those of Labour London Mayor Sadiq Khan, who called Trump “racist”, “sexist” and a “homophobe” in an interview in May and urged his party to “call him out”.

Speaking on Radio 5 Live on Thursday, Morgan said the UK had to “keep as good a relationship with the United States as we can”.

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UK Labour Labour Foreign Secretary David Lammy previously called Trump a “neo-Nazi-sympathising sociopath”, in 2018 when he was a backbench MP, but has dismissed those comments as “old news“, insisting he would be able to find “common ground” with the president-elect.

On Thursday morning’s phone-in Morgan was asked by presenter Nicky Campbell if Trump was a racist.

“I shouldn’t think he is, to be honest,” she said.

“There were a hell of a lot of black people and Latinos who voted for him in the election.”

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The first minister added that the American vote had to be respected: “We need a strong relationship with the United States irrespective of who leads the country.

“It’s our biggest area in terms of inward investment,” she said.

She said she was worried about the potential of additional tariffs, however. “It will hit our economy,” she warned.

During his election campaign Trump pledged to impose a 20% tariff on all imports into the United States and a 60% tariff on Chinese imports.

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During Thursday’s programme, which marked Morgan’s first 100 days leading the Welsh government, the first minister also called for farmers to “calm down a bit” over changes to inheritance tax.

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Council tax in England set to rise by up to 5%

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Getty Images A council bin worker empties bins into a lorry in Ipswich, SuffolkGetty Images

Council tax bills in England are set to rise by up to 5% next April, after the government confirmed it was sticking with the current cap on increases.

Communities Minister Matthew Pennycook told the Commons this was the “right threshold”, as he pointed to the pressures on council budgets.

It means the average household faces an above-inflation increase of more than £100 to their to their council tax bill next year.

Pennycook said the government expects an extra £1.8bn to be raised through council tax in 2025/26.

But the Conservatives claimed Labour had left a “black hole” in council finances.

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Under current rules, councils in England providing social care services can increase tax rates by up to 5%, while others can increase rates by up to 3%.

Councils who want to increase bills above this level must get permission from the government or hold a referendum.

According to government figures, the average band D council tax set by local authorities in England for 2024-25 was £2,171 – an increase of £106 or 5.1% on the previous year.

On Wednesday, the prime minister’s press secretary told reporters the 5% threshold set by the previous government “remains the same”.

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It came after Conservative leader Kemi Badenoch pressed Sir Keir Starmer during Prime Minister’s Questions over whether the cap would be kept in place, with the PM sidestepping the question.

Answering an urgent question on the issue in the House of Commons on Thursday, Pennycook defended the decision to keep the cap.

The minister said the government was committed to protecting the most vulnerable through the 25% discount on council tax for people who live alone and other support schemes.

He added that this means more than eight million households do not pay a full council tax bill.

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Pennycook was also challenged over the financial pressures facing councils.

Liberal Democrat MP Lee Dillon said his party was “deeply concerned that people are simply paying more council tax for fewer services”.

He highlighted the increased costs for councils from inflation, wages and demand for local services and urged the minister to ensure they did not have to close libraries, cut bus routes or reduce road repairs as a result.

In response, Pennycook said: “The government certainly recognises the pressures on local authorities and the burdens placed on households as a result of 14 years in which local government was run down.”

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“We are determined to turn that situation around,” he added, pointing to an extra £4bn in new funding for councils in last month’s Budget.

The Local Government Association has welcomed the extra funding for councils, but warned they still face significant pressures in areas like adult and children’s social care and homelessness support.

The County Councils Network also said the money “does not eradicate councils’ funding gap”, meaning they would “have little choice but to raise council tax and still need to take difficult decisions over services to balance their budgets”.

Conservative shadow communities minister David Simmonds claimed the government had left a £2.4bn “black hole” in councils budgets.

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“Answers to parliamentary questions show that the government is expecting spending power to increase by £3.7bn, funded by grants of £1.3bn,” he told the Commons.

He added: “Whilst nobody would want to see the [council tax rise] referendum limit scrapped simply to bail out central government, the announcement of the 5% constrains local authorities when it comes to their fundraising.

“Will it be our High Streets through increased business rates or will it be other council services through significant cuts that will need to fill their £2.4bn black hole?”

Pennycook rejected the figure, saying it did not take account of more than £300m raised in business rates and an expected £300m in additional new housing.

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He pointed out that the 5% cap on council tax rises was in place when the Conservatives were in government and called on the party to clarify whether they believed it should be abolished or reduced.

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Building more prisons not answer to crisis, says review chief

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Building more prisons not answer to crisis, says review chief

The man in charge of a review of the prisons crisis says building more jails is not the answer and a more “strategic” approach is needed to free up space.

The former Conservative Justice Secretary David Gauke has been called in by Labour to review sentencing, following the early release of nearly 3,000 offenders in recent weeks.

The sentencing review was a Labour manifesto pledge and the party has also appointed Lord Timpson, former head of the key-cutting chain that hires ex-offenders and chief of the Prison Reform Trust, as its prisons minister.

Gauke, who was justice secretary under Theresa May, has previously suggested that jail terms of less than six months should be scrapped.

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The UK prison population has roughly doubled in the last 30 years, with capacity lagging behind, and in September the system came within 100 places of running out of space altogether.

Gauke told BBC Radio 4’s Today programme that this autumn’s crisis release of prisoners was unavoidable for the new Labour government because of “the circumstances they inherited”.

Stressing “I do not speak as a Labour person”, he said “any government of any colour would have been forced to make that decision, or something very like that decision, at that particular time”.

He warned projections showed demand for prison cells would continue to “increase very significantly”, but he hoped the sentencing review could help avoid the same crunchpoint in future, by reducing the number of people sent to jail.

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“What we want to avoid is a situation where prisoners are being released as a short-term, reduce-the-pressure moment,” he said.

“What we have to be is more strategic – we have to make sure that prison capacity meets demand and that means we have to look at the question of demand on prison places and that’s I think where looking at the sentencing regime is necessary and important.”

The current prisons crisis had built up over 30 years, Gauke said, due to successive government decisions to make average sentences longer, creating a situation where the UK “relies much more heavily on prison than any other western European country”.

Although he said prisons were an important part of the justice system, he questioned whether the UK should keep on building more prisons because “it’s very expensive and…evidence does not suggest that it’s an effective way of reducing crime”.

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Instead, he talked about using technology to create tougher non-custodial sentences, following approaches taken by other countries with much lower prison populations.

With more than half the women in jail serving sentences of six months or less, Gauke said reducing the female prison population was also an option to free up space.

He said: “Clearly there are some women prisoners who must go to prison, who commit serious offences and it’s right that prison is where they go, but I think there is a case for looking at short sentences more generally.

“There’s a particular issue with women offender who are very often themselves victims of crime, very often face issues with mental health, substance abuse and so on that could be addressed outside prison.

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“So I would certainly want to look at that, and I said this as justice secretary, I think we could reduce the female prison population.”

Latest government figures show more than half of women are sent to jail for less than six months, compared to 3% of the total prison population being behind bars for that length of time.

The sentencing review is now open for submissions from the public about how the prison system can be improved and will submit findings to the Lord Chancellor by Spring 2025.

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