If I were president of the National Farmers’ Union I know what my first task would be today: ring up Sir James Dyson and plead with him to keep his trap shut. It isn’t that Dyson, one of the few living Britons who has set up a manufacturing business of worldwide reputation, isn’t worth listening to on the economy and many other things. But when it comes to protecting the interests of family farms – which is the NFU’s prime interest after last week’s Budget – Dyson is the very last voice you should want to hear publicly supporting your case.
Dyson is the last voice you should want to hear publicly supporting your case
For all I know Dyson may have been harbouring a latent interest in agriculture since he was a lad. He may be as passionate about growing peas as he is about designing vacuum cleaners – more so, even. But he also happens to epitomise the very target of Rachel Reeves’ decision to limit agricultural property relief (APR) to the first £1 million of assets: a wealthy individual who starts buying up farmland in late middle age. The 77-year-old now owns 35,000 acres of it. It is hard to believe that concerns about inheritance tax did not enter his head when he moved into farming.
It is not just farmland which will be affected by the changes to inheritance tax: Reeves also put a £1 million limit on the tax relief which can be claimed on business assets, which will affect thousands of small businesses. Writing in the Times today, Dyson does indeed lead on small businesses of all kinds, only later moving onto the subject of farms. But like it or not, family farms have become the face of resistance to the Budget. Having a man estimated by the Sunday Times Rich List to be worth £20.8 billion emerging as the figurehead for their cause is not helping them. Nor, by the way, is Jeremy Clarkson helping them either. There is another wealthy figure who seems to have discovered a remarkable interest in food production fairly late in life.
If the farming lobby wants to win its battle for public opinion against the Chancellor it wants to be getting before the cameras tearful men and women who have been labouring a lifetime on their 300 acre farms and who, while they might be asset-rich, are distinctly cash-poor. According to the Department for Environment Food and Rural Affairs, 26 per cent of mixed farms in Britain made a loss in 2022/23, while 23 per cent made a profit of under £25,000. The typical victim of Reeves’ changes is hardly a barley baron. And nor will they consider themselves wealthy on the basis that they own a few hundred acres. On the contrary, their land will not have been particularly valuable until recent years, when farmland prices started to be bid up by, er, wealthy individuals looking to acquire an asset which they can use to avoid inheritance tax – and also now by bands of ‘green’ investors looking for somewhere to plant trees in order to claim carbon credits. It is those two things which have driven up farmland prices to the level at which family farms will now be caught by Reeves’ new threshold.
Reeves’ error was not to take on the super rich farmland owners – while they have a loud voice, few members of the public will want to support them. The mistake was in failing properly to come up with a mechanism which distinguishes between genuine farmers and those who have bought hobby farms for tax purposes. She should have devised a test whereby, say, farmers had to prove they or their forebears had been farming the land for at least 30 years before they could claim relief from inheritance tax. Or a system whereby the longer you had been farming, the bigger the relief. Or, say, making inheritance tax relief apply only in cases where a family could prove that farming had been it main source of income for many years.
Those are the kinds of arguments that the family farming lobby needs to be making if it is to win its case. Dyson is not the man who is going to help make them.
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