This week saw the first of what I suspect will be many marches against this new Labour government. Thousands of farmers descended on Whitehall to protest at their businesses being taxed as inheritance, including many from Wyre Forest.
The issue is that family farms have long been recognised as small businesses, so have avoided inheritance tax. But successful entrepreneurs, eager to pass on as much of their hard-won wealth to their children, have taken advantage of this to avoid paying inheritance tax. Buying land and farming it is a sort of tax avoidance. But then again it isn’t, because they need to produces food to qualify.
But farming is really difficult. Whilst agricultural land is worth around £10,000 an acre, many farms make just about £100 for each acre they work. But if you take a 250 acre farm worth around £2.5 million, the farmer’s heirs would have to pay tax on £1.5 million. More than that. Add the farmhouse, buildings, and plant and machinery, and the tax bill soars. But if you value the business as a going concern, rather than by net asset value, it’s worth is more like £250,000, based on it being valued at 10 times net profit (a more traditional method).
This is as stupid a policy as taking away money from freezing pensioners. It now seems ministers admit that 100,000 pensioners will be put into poverty as a direct result of their policy. Incredible. Yet to justify it, they still bleat on about the so-called £22 billion black hole, despite the vast majority of economists saying it is nonsense, and largely due to unconditional public sector pay rises granted by non-other than Kier Starmer.
The march was good natured with lots of families and placards. My favourite was “Kier Starmer The Farmer Harmer”. But it is said that a government’s first priority is to defend its citizens. I disagree. It is a government’s first priority to feed its citizens. A few years back I met with a senior police officer who pointed out that we are only ever four missed meals away from anarchy. With that in mind, what on earth is Rachel Reeves thinking when she starts mucking around with our domestic food production. It simply beggars belief that anyone can be so reckless with something so vitally important for our most fundamental need: avoiding starvation. Farmers deserve our support.