For the last few months, there have been repeated and regular protests by farmers over inheritance tax changes to their estates. These are, without a doubt, farcical. To sum it up, the change is an immense burden on the agricultural community with very little relative benefit for the government – what a disaster!
Firstly, the technical part, what has changed? It can be broken down into 2 parts. Prior to the Labour budget, agricultural property relief meant there was no tax when passing a family farm down to the next generation. There is now. Currently, a tax-free threshold of £1 million exists but above that, there is a 20% rate of tax. Secondly, agricultural property relief (APR) and business property relief (BPR) will be combined. APR covers the physical land on the farm whilst BPR covers the ‘business assets’. This means any farm machinery, livestock, deadstock (crops in the ground) etc. In practice, this means that instead of having a tax-free amount that can be passed down in each of the APR and BPR categories, there is only one tax-free amount that can be passed down – ultimately meaning that less can be passed down without being taxed.
So, farmers have to pay more tax and according to the government this money will be spent on public services. More funding for public services sounds brilliant but at what cost? Why should you be outraged at these changes? And why are they crippling for your food security and, ultimately, the future of small British farms?
Firstly, there could be a loss of small, generational farms in the UK. Despite what you might be led to believe by the media, this is not a tax that is hitting big corporations the hardest. The people this could most drastically impact are small, generational family farms in the UK. These are not run by so-called ‘millionaire farmers’ by any stretch of the imagination. These farmers may be asset rich, meaning the land they own is very valuable, but they are not cash rich. When farmers die, their children will be forced to sell their land to pay the tax bill. How is that fair? Farming is in absolutely no way a glamourous job. Getting up at 5am to tend to livestock, having crops fail, unpredictable weather, constant expenses when machinery breaks down, is anything but glamorous. Why do farmers do it? Because it’s in their blood and they want to maintain their farm for their children. They want to serve their country and put food on your table whilst being custodians of the countryside. This tax is how the government is choosing to repay them.
Secondly, Labour don’t seem to understand farming. You would think that a policy of such significance would have had quite a lot of thought put into it. It has been so poorly researched that the government can’t even tell you how many farms this is going to affect. Rachel Reeves and the Treasury say 500 estates will be affected, whilst the Department for Environment, Food and Rural Affairs (Defra) thinks it will be 209,000 farms. How do they not know? Whilst the Treasury cited alternative data, you would think they looked at a range of data from a range of years to get an accurate picture of the policy’s effect. No. It seems the Treasury have very little data on BPR and didn’t look at how many farmers claimed it last year, thus, they don't have an accurate idea of what will happen when it is combined with APR.
We could also see a very real decrease in food security and a rise in food prices. The world is undeniably becoming a less secure place and the UK produces less than 60% of the food its population eats. With fewer farms being able to produce food as there is nobody to farm them, food prices will be pushed up during a time of soaring prices.
So, what is the government response to the widespread unrest they have caused? To advise farmers who are worried to look into tax evasion. Telling. This quite clearly shows that they have begun to recognise that they didn’t think this policy through before announcing it, largely because they didn’t have any consistent data, and don’t want to admit this to the public by reversing their decision.
In this short article alone, it is clear that this policy is completely and utterly farcical. The policy hasn’t been thought through, is based on incoherent data that differs from what farmers and their representatives are providing, and will have reprehensible consequences. It isn’t targeting millionaire farmers. The threshold of £1 million in today’s world is not a lot. Perhaps if they raised this threshold, there would be less outrage. Regardless, it is targeting the small, generational family farms and farmers who have worked all their lives to protect their land, and who are no longer reassured by the fact that their children can do the same. Instead, they will have to sell their life’s work and family home when they are already at 'breaking point' to pay a tax bill from a government undeniably stabbing them in the back.
Image: Associated Press
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