Moray visit sees Scottish Labour leader Anas Sarwar address Agricultural Property Relief cut criticisms

Scottish Labour Leader Anas Sarwar has responded to local criticism of decisions taken by the new Labour government at Westminster.

The senior politician, who has family ties to Moray, sat down with The Northern Scot during his visit to Elgin last week.

He addressed concerns raised by the farming community about changes to Inheritance Tax, nicknamed a “Family Farm Tax” by Conservative politicians.

The MSP also said he had “sympathy” about the whisky industry’s concern over an increase on whisky taxes, but argued it was “proportionate”.

Also addressed was the future of RAF Lossiemouth, with the Scottish Labour leader arguing that a new defence deal with Germany was a show of confidence in Moray’s airbase.

Announcing the first Labour budget for 14 years, Chancellor Rachel Reeves revealed that Inheritance Tax rules for farmers are set to be tightened.

Currently, agricultural land and buildings are exempt from inheritance tax.

But from April 2026, those passing on more than £1 million of farming land and assets will face a 20 per cent tax on anything above the threshold.

Highlands and Islands Conservative MSP Douglas Ross labelled the measure a “family farm tax”, and warned that it may lead to the collapse of the local farming industry.

However, Mr Sarwar said there had been “misinformation” in the heated debate over the measures.

The Scottish Labour leader argued that very few farms would actually face Inheritance Tax under the rules.

Under the rules, a farm owned by a married couple would only face being taxed if the value exceeded £3 million.

This is because both owners would have their own £1 million of inheritance tax relief for farm land, along with a £500,000 tax-free inheritance tax allowance for property.

However, according to the HM Treasury website, a single person leaving a farm as inheritance would only have a £1.5m allowance.

Mr Sarwar said those facing inheritance tax on farms would have up to 10 years to pay before interest is added - rather than the six months provided for typical inheritance tax cases.

The MSP also described this measure as “proportionate”, emphasising that farmers would still be paying less than half the inheritance tax paid by other sectors.

“It's something that's only going to hit a very, very small number of farmers, not the broader farming community we have here in Scotland,” Mr Sarwar said.

“I think it's important to get that right.

“That is a proportionate and balanced approach that actually only a tiny minority of farmers will be hit by, rather than large swathes of farming communities.”

He also argued that the decision was taken because Labour found significant problems in the public finances and chose to “look it dead in the face”.

“All of these decisions are made in the context of crisis,” he added.

“It's not the case that we have chosen to make difficult decisions, and they are difficult decisions, for the sake of making difficult decisions.

“We had a choice - do we walk past the black hole of public finances or do we look it dead in the face?

“We've chosen to look it dead in the face.”

Mr Sarwar added that cash raised from raising taxes was helping to support £38 million of regeneration work in Elgin, originally launched by the last Conservative government, which survived the Labour budget.

In the pipeline as a result of the “investment”, he argued, were improvements to Dr Gray’s Hospital and maternity services, along with the education system.

The Scottish Labour Leader was also quizzed on the Government’s decision to increase taxes on whisky, despite pressure from organisation like the Scotch Whisky Association (SWA).

While pubs are set to benefit for a reduction in taxes on draught beer, the price of a typical bottle of whisky is expected to rise by more than 30 pence from February 2025.

This was despite the SWA having called on Labour to reverse a 10.1 per cent hike imposed by the Conservative government in August 2023.

Mr Sarwar said he had “a lot of sympathy” for the industry’s frustration about the rise.

“I can understand that, when the Conservatives put on a massive hike on excise duty in the last parliament, that was obviously a cause of massive frustration for the industry,” he said.

“We've obviously chosen a much more proportionate increase in terms of increased excise duty.

“But we have to look at the support for the industry in the round.

“We are working very closely with the industry to look at how we can reduce production costs in order to improve the bottom line for the sector.”

He added that new government were in talks with Brand Scotland, to look at ways to increase global exports of whisky and other Scottish products.

“You've seen the fruits of that already in terms of the deal that we signed with Brazil around the positive benefit that is for Scotland's whisky industry,” Mr Sarwar said.

“The trade negotiations we're having with many countries around the world at the moment.

“We have an ongoing trade negotiation with India, there's ongoing trade negotiations with many Arab countries and other parts of the world.

“Our produce plays a massive part of that.

“The whisky industry plays a huge part in terms of those trade negotiations.

“All of these are huge potential benefits for Scotland's whisky industry.”

The Scottish Labour leader also accused SNP politicians of “hypocrisy” over their criticism of the tax rise, while imposing Minimum Unit Pricing.

Asked about the future of RAF Lossiemouth, which is to benefit from a recent defence deal between the UK and Germany, Mr Sarwar said Moray’s air base would “absolutely” play an important role in years to come.

“It's such a key part of our strategic defence infrastructure,” he said.

“It's a quality workforce, a quality airspace, a quality part of our defence that we will continue to support and want to see it thrive.

“I think what you've seen from the deal with Germany is a genuine attempt from a new government to reset our relationships with the European Union, to reset our relationship with our strategic defence allies.

“And that is good for our defence infrastructure, but we also hope it's good news for getting more investment actually into the industries here in Scotland.

“And it is a conversation that we're continuing with many nations, around how we can get them to invest in some of their own defence infrastructure by spending here in Scotland.”