HC Deb 24 January 2002 vol 378 cc1003-4
9. Mr. Chris Mullin (Sunderland, South)

What plans he has to review the provision of roll-over relief on capital gains tax on the sale of agricultural land for development; and if he will make a statement. [27559]

The Paymaster General (Dawn Primarolo)

We currently have no plans to review this relief, which supports trading including farming.

Mr. Mullin

May I put it to my hon. Friend that the windfall profits arising from planning permission for agricultural land are already sufficiently enormous without it being necessary to award the landowner tax relief as well, especially since one of the effects is artificially to inflate the price of agricultural land? Whose idea was this? How can it possibly be in the public interest? Is it really not about time that a stop was put to it?

Dawn Primarolo

I have discussed this matter with my hon. Friend before and I know that he follows the subject very closely. The proceeds of the sale have to be reinvested in trade assets for the roll-over relief to be available in the first place. Roll-over reliefs are designed to allow traders to Modernise and expand without an immediate charge to tax being made on the money of the business.

I continue to have an open mind on the subject and I have considered closely the factors that interrelate with the sale of land, particularly farming land, for greenfield development. I am not convinced that roll-over relief is the problem, but I understand that the subject is dear to my hon. Friend's heart. I look forward to continuing to discuss the issue with him. If he has any further information, I shall be more than happy for him to send it to me and for me to reconsider it.

Alistair Burt (North-East Bedfordshire)

When the hon. Lady is examining submissions about tax relief and other initiatives for the Budget, will she take into consideration a recent European Commission survey that showed that, contrary to the beliefs of some Labour Members, Britain provided the lowest state aid to agriculture of any country in the European Community, whether that was measured as a percentage of GDP or in terms of the number of people employed?

When the hon. Lady thinks about initiatives for the future, will she bear in mind the difficulties that agriculture has faced and will she therefore consider favourably tax changes that will help farmers? Will she particularly consider the initiatives suggested by people in that hard-pressed sector, because she is very unlikely to receive any suggestions from the Ministers with responsibility for agriculture?

Dawn Primarolo

I am sure that the hon. Gentleman is aware that a vast array of tax reliefs and supports are available for the farming community. He went on to make an important point about the diversification of rural communities and about considering ways in which we could assist that. I assure him that the issue is a high priority for the Government. I take his contribution to be a Budget representation and I will draw it to the attention of my right hon. Friend the Chancellor.

Mr. John Smith (Vale of Glamorgan)

May I welcome my hon. Friend's comments? The last thing in the world that we should be doing is putting up more barriers to farmers diversifying from agricultural overproduction and into new rural industries. I shall meet members of the Glamorgan branch of the NFU in Cowbridge tomorrow, and I would be delighted to be able to tell them that the Government plan to do even more to help them with diversification.

Dawn Primarolo

My hon. Friend can take my best wishes and those of my hon. Friend the Economic Secretary to the group that he will meet. I am sure that he will be able to reassure its members that the Government continue to take the views of the rural community very seriously. Not least, I point to the substantial help that Customs and Excise and the Inland Revenue were able to give members of the rural community during the difficult period that they all experienced during the foot and mouth crisis.

I would like my hon. Friend to echo the comments that I have made to him and to the hon. Member for North-East Bedfordshire (Alistair Burt) about the fact that diversification of rural communities is of great importance to the Government. We will continue to take forward that programme as best we can and, as my right hon. Friend the Chancellor would expect me to say, as resources allow.