Keir Starmer's government wants to tax farms worth more than a million pounds passed on as inheritances. Celebrities and the biggest rich have protested, as buying land has become a well-known way to avoid taxes. Just what were the farmers doing at this protest?
It isn’t often that the British protest, especially by the standards of our close neighbours, the French. That is even more true when speaking of British farmers who tend to be, on the whole, older, whiter, and conservative-leaning, thus even less inclined to make a noise than the rest of us. But in November, it was the farmers who ascended on Westminster. The farmers came to say they didn’t like the proposed changes to inheritance tax relief and exemptions just announced as part of the Government’s Autumn Budget. They brought their offspring to drive home the point, so part of the march was spearheaded by children riding toy tractors.
Arms in arms with the farmers walked the opposition politicians and former government members (remember Priti Patel?). Nigel Farage, not just a man of the people but the agrarian one this time round, arrived in shiny wellingtons that never saw a muddy field (or most likely any field) and the obligatory Barbour jacket. No burning tyres, no dumping manure in front of government buildings, but politicians in drag–farmers protest the British way. Here come assorted aristos, a TV farmer, and various other celebrities. Even Andrew Lloyd Weber who had barely found his way to Westminster when it was his duty to vote in the House of Lords (though was once flown by his party from New York so he could vote against tax credits for the working poor).
Whilst the Standard reported that the protest was 20,000 strong, it’s more likely that the number was closer to half that. These, however, are not the most important numbers being contested, for numbers are at the heart of the dispute between the Government and the farmers. How many farmers will now have to pay the inheritance tax? How many, and how much?!
To help everyone understand this equation, the stage enters Jeremy Clarkson, the Amazon Prime TV farmer. He asks those gathered to raise a hand if they own a family farm and then lower it if they think they will be unaffected by what the Government proposes. Most, if not all the hands stay up in the air. ‘I rest my case’, says Clarkson. Da liegt der Hund begraben, say I, borrowing from our other neighbours. Because unlike what the farmers claim, not every farm worth over one million pounds will be affected by the new legislation. In practice (and because of how the tax system is rigged in favour of married and/or child-having people), only farms worth over circa three million pounds would be affected for a couple, and 1.5 million for a single person. And in 2021-22, there were only 117 farms valued above two and a half million pounds. Only the part of the estate above the three million threshold would be taxed at the measly rate of 20 per cent. The rest of the married folk can only dream of such exemption; their inheritance tax is forty per cent applied to anything above 650,000 pounds (325,000 for a single person). Farmers, unlike the rest of us, will have a decade to pay their dues on agricultural and business property to the Treasury. A decade of interest-free payments whilst even student loans are no longer interest-free. According to experts, most farms valued over three million still won’t have to pay any inheritance tax with basic estate planning and using the generous ‘gift’ allowance.
According to the Government’s tax specialists, only about 500 farms would be affected by the change to inheritance tax relief each year. Even if these figures are slightly off, the policy is more about closing a path for tax dodgers and preventing further accumulation of land in the hands of a few than it is about taxing the inheritance of working farmers. Buying land has become a well-known tax avoidance tactic. The farms are not just in the hands of small farmers passing the land, stock and machinery from generation to generation. Forty per cent of all sold farmland in 2023 was grabbed by ‘lifestyle’ and other investors, whilst working farmers bought less than half of all farms sold that year.
One can perhaps sympathise with the shock that the Budget announcement caused the farmers. They were never before liable to pay any inheritance tax on farms. They could be forgiven for getting the numbers wrong since they never had to think about them. And farmers are not the only ones suffering from this delusion of inheritance tax impending doom! About a third of us are convinced that our benefactors will be liable to pay inheritance tax whilst, in reality, only a tiny percentage of all the UK estates qualify. In the 2020-21 year, only 3.73% of all estates paid inheritance tax. No access to free education and deference to the class system is evidently paying off. For some. We are up in arms about the perceived unfairness of the inheritance tax (which most of us won’t pay) when we should be taxing more land that is not family-farmed and second homes whilst we are at it. We should prevent the land and properties from becoming assets to be traded, invested in, hide money from the taxman, or make passive money off. How many flats does one need to own to live? How much land?
Half of the land in England alone is owned by less than 1% of its population. About 25,000 people (who inherited the land due to coincidence of birth alone) and corporations control half the country. Farming land brings in tax relief not just for farmers but also for landlords. Between 2018 and 2020, only 44 per cent of those who benefited from agricultural tax relief had received any trading income from agriculture at any point in the five years before death. Almost two-thirds of all Agricultural Relief went to only 200 estates each year, with an average estate value of £6 million. Each of those estates claimed more than £1 million in relief. If we allow rich people to buy even more land only because they can, not because they are into feeding the nation, the value of the land will continue to rise. Not just to farmers’ detriment. It’s just a shame the farmers seemingly chose to listen not to the experts but the likes of Clarkson who, in the interview with The Times, admits he’s campaigning for ‘no inheritance tax on land’. If the family farmers considered what is set out in the Budget, there might still be a protest against it, but mostly from the non-farming landowners. Indeed, other protesters in Westminster who, it is safe to assume, never did a day of farming in their lives included Marquis of Granby (clearly worried as his inheritance counts 4,5000 acres of farmland and a castle), Viscount Garnock, Lady Alice Manners and other big land owners. It has been quite a party. Just open the November issue of Tatler. Then, shed a tear for the Crown, Clarkson, Bamford or Dyson. Especially Dyson, who, oh dear, dropped to the 5th place on this year’s the Sunday Times Rich List (from the 2nd in 2022) with his estate worth just under 21 billion pounds.
According to Dyson, the ‘’spiteful’’ Autumn Budget is set against the farmers. What a shame he didn’t think of the farmers when he championed leaving the single market. Dyson, the hard Brexit torchbearer, sang visions of the UK becoming the Singapore of Europe before relocating his company headquarters from Wiltshire to Singapore in 2019 and hoovering up swaths and swaths of British land. Land for which he keeps receiving, like other big landowners, public money subsidies. What’s not to like - the more land you own, the more subsidy you get, whether you are farming or not. The average British farm is only 82 hectares. Almost half of all the farms are less than twenty hectares. Dyson owns 36,000 acres of land across five counties.
What the Labour government is trying to do is no small feat. If they were to U-turn on this policy, they should slap even more than the proposed tax on any farm worth more than three million. Or, better still, implement a tax regime which differentiates between a genuine farmer and a farmland owner. What happened so far, however, illustrates how important it is for the government to communicate effectively with us, the voters, especially because most of the media has always been sympathetic to the land-owning class.
When the EU farmers took to the streets early last Spring, the papers were delighted, pointing out how brilliant of us to have left the EU with all their farming problems. Now our farmers are angry. And there is plenty the farmers should get angry about. British farmers are undercut by any post-Brexit trade deal with a country far, far away that does not adhere to the same food production standards. They have great difficulties selling to the EU, our closest market. Neverminded the tariffs, we don’t have enough seasonal workers nowadays, and soon, there will be no governmental subsidies that, for a short time, matched the EU agricultural payments from which we opted out. This year’s payouts are already 50-70 per cent less than what the farmers received before Brexit from the EU. Like the proverbial turkeys, after voting themselves out of a single market, farmers embraced tax dodgers as their spokespersons. They protested less over Brexit consequences than the inheritance tax on the landowners - the rich who drive up the price of the land but not the worth of people working on it.
Speaking of turkeys, in 2021, the festive dinners of those of us celebrating X-mas were saved by turkeys reared in Poland and France. It’s easier for a Polish turkey to cross the UK border than for a British cheese to get to Europe. Our famed cheese got stuck in customs, missing the opportunity to be judged alongside its European competition last month. No, not just Cheddar! 252 cheeses from 67 producers.
We are producing less food and rely on unchecked imports more. It’s hard to argue with farmers saying we need them - we need to eat to live. I couldn’t finish this article without reporting that the protesting farmers wheeled some excellent fresh produce down the streets of London in November, not to dump but to donate it to food banks.
