Britain’s farmers are in a bind. Despite sitting on land worth millions, they are unable to release that wealth without selling – and many struggle to make money from what they produce. According to Defra, almost one in five farms make a loss, while a quarter made less than £25,000 last year. Yet there are parts of the Labour movement that see farmers as money-grubbing, tweed-clad elites benefiting from special tax breaks and hefty subsidies.
James Buckle, a farmer from Suffolk, understands those frustrations: ‘If our farm is worth £10 million, and we’ve got these new inheritance tax rules, we’ve got to pay something like £1.6 million to pass it on. And £10 million is a ridiculous value for an asset that one person owns. It’s why we’re not going to get the general public crying for us. The problem is, when you start talking about capital numbers, it’s all huge. But actually, we just don’t make any money from it.’
Farming is notorious for its high costs and low profits. Gavin Lane is indeed a tweed-clad farmer from Norfolk. ‘I was gobsmacked by the inheritance tax changes,’ he says. ‘I thought this Labour government cared about growth. Most of us are looking at a return on capital of less than 1 per cent. Paying for these new taxes out of revenue is basically impossible for most of us. This Budget is anti-growth and it’s very anti-rural.’
The new rules mean farmers’ children will be taxed not just on the value of the land, but also the value of machinery and properties. Why buy a new combine harvester or build a farm shop if you know your offspring may soon have to pay a large chunk of the cost to the Exchequer? The result will be slower growth in the countryside.
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