Chancellor warned of impact inheritance tax changes could have on rural economy in Wales

Rachel Reeves’ has been warned that moves to apply inheritance tax to family farms will seriously threaten the rural economy in Wales.

Ms Reeves announced today (30 October) that she would cap relief on the inheritance of agricultural land and family businesses, both of which can be passed on tax free under current rules.

Llinos Medi, the Plaid Cymru MP for Ynys Mon, said she feared the change announced in the Budget would hit farms hard.

She said: “I am afraid that changes to rules on inheritance will seriously threaten Welsh family farms which are the backbone of the rural economy.”

Funding

Ms Medi criticised the lack of serious changes to Wales’ funding formula, and said the Chancellor had passed up the chance for significant change.

She told the Commons: “Today the Chancellor had the opportunity for a transformative change, but I’m afraid that Chancellor has decided to give with one hand and take with another. Plaid Cymru recognise the terrible financial legacy inherited from the Conservatives, but this was not the way to fix it.

“No fairer funding formula for Wales. No sign of the £4 billion worth of HS2 consequential owed to Wales, no devolution of the Crown Estate, and no U-turn on the Winter Fuel Allowance or an end to the cruel two-child benefit cap. They could have tried to spread the pain with bigger contribution by the very richest through a wealth tax, for example.”

Direct spending

However, Welsh Affairs Committee chairwoman Ruth Jones welcomed funding for Wales announced in the budget on Wednesday afternoon (30 October)’

The Labour MP for Newport West and Islwyn told the Commons: “This is a long-awaited Budget. We have in Wales waited 14 years for a Budget from a Labour Government in Westminster, a Government who will finally work with and not against the Senedd in Cardiff, and provide support for the people of Wales.”

She added: “I really welcome the £1.7 billion of new money for Wales both through the Barnett formula but also through direct spending. Most notably, I welcome the substantial increase in Barnett consequential for (the) Welsh Labour Government to put towards day-to-day spending on public services like the NHS.

“I welcome the support for steel communities, both through the Transition Board but also protecting the Levelling Up funding in Port Talbot and elsewhere. I of course welcome the £25 million to make coal tips safe, and I’m so glad our Government has stepped in so quickly to do this important work.

“I welcome the £430 million in funding for communities across Wales and investment zones to drive economic growth, and I welcome the money for rail projects with the promise of a sustainably funded future.”