Chancellor Rachel Reeves Budget clears first House of Commons hurdle

Rachel Reeves’ Budget, which she said will “rebuild Britain”, has cleared its first Commons hurdle.

MPs approved a series of Budget resolutions on Wednesday, which included an increase to employers’ national insurance contributions, a new tax on vapes, and a £22.6 billion boost to day-to-day NHS spending.

Other measures brought forward in the Budget include £11.8 billion in compensation for the infected blood scandal victims, imposing VAT on private school fees, and abolishing the non-dom tax regime.

The Chancellor has faced criticism for changes to inheritance tax for farmers, with many opposition MPs calling for the Government to reconsider this proposal.

Under the plans, inheritance tax will be charged at 20% on farms worth more than £1 million, although Ms Reeves has said that in some cases the threshold could in practice be about £3 million.

On the final day of debate, Conservative former minister Andrew Murrison said he supported measures to tackle land banking to avoid inheritance tax, but “attacking family farms is not on”.

Conservative former minister Wendy Morton called on the Government to “abolish what I and others would now term the family farm tax”, adding: “My farmers are devastated, promises made to them have been broken with no consultation, no opportunity to plan.

“This Government has shown it is no friend of the farmer, the producers of our food, the guardians of our countryside. From food heroes during Covid, to being abandoned in the cold.”

Business Secretary Jonathan Reynolds claimed that only 500 farms will be impacted by the change.

He told MPs: “I do think on a lot of the analysis – certainly on the Conservative Party’s analysis – what they forgot to do is aggregate the impact of the changes to those allowances on agricultural property relief, alongside the existing nil rate band and the ability to transfer those allowances between spouses in all cases.

“So, actually, if you look at the number, the total number across the UK of farms that would have been affected by this change, it’s only 500, yes, it’s 500 for the 2026/27 financial year. And I think that has been missed.”

He added that the criticism of the measure amounted to “a little bit of scaremongering” as he urged colleagues “to be clear with people about what actually the case is”.

Winding up the debate, shadow treasury minister Richard Fuller said: “This is a Budget of choices, and the choices are Labour’s choices and theirs alone. The choice to increase taxes, their choice to increase debt, their choice to change the fiscal rules, and their choice to rip up promise after election promise after election promise.”

He added: “This Budget of broken promises sends a series of clear messages. Don’t start your own business, because Labour will tax you.

“Don’t have a plan to hire new employees, because Labour will tax you. Don’t take a risk and expect to keep a reward, because Labour will tax you.

“Don’t invest in the education of your children, because Labour will tax you. And don’t, whatever you do, farm your land to grow British food, because Labour will grind you into that very same ground and tax you too.

“Finally I say to the minister, the trust that has been broken in this Budget will not be recovered. People will never forget what happens when Labour are given their chance, will never forget the harm done when Labour makes its choices, and will never forget that Labour’s first budget was a Budget of broken promises.”

Treasury minister Tulip Siddiq said: “It’s not often I agree with (Mr Fuller), but he said we had choices, and the truth is, we did have choices. And guess what? We chose to act.

“In 10 years’ time, the country will look back at this Budget as a moment in which we got Britain’s future back.

“This is the moment where, in the future, the economy would have grown because we chose to prioritise a healthy workforce. This is the time when, in the future, we will have record levels of investment because we prioritise fiscal responsibility and economic responsibility.

“This is the time when people will have more money in their pockets because we prioritise protecting hard-working people’s payslips. The merry-go-round of austerity and economic irresponsibility is over. We made a choice; we made a choice to rebuild Britain.”

Published: 07/11/2024 by Radio NewsHub