I’ve written before - several times - about the way our current UK government is destroying any hopes of energy security, despite the asinine claims of Ed Miliband. Today, however there is another basic security which they are seemingly intent on rejecting. The budget on wednesday of this week contained many things with which I disagree, and I think I do agree with the numerous think-tanks who have pointed out that the levels of increased governmental income are unlikely to match expectations and that yet more tax increases are a strong possibility. There is one measure which seems particularly stupid, to put it in simple terms. That is the imposition of inheritance tax on farmland.
Up until now, a family farm handed down through the generations has been exempt from inheritance tax (IHT). There are good reasons for that, largely predicated on the fact that although farming families may appear wealthy, that wealth is in the land; in other words, they are asset rich. Now, it is undoubtedly true that there are extremely wealthy individuals and families who have invested in agricultural land precisely because it does not attract IHT, thus aiding them in their overall tax planning. You could - and if a socialist government, you would - wish to close that potential loophole in tax raising, but unfortunately the numbers demonstrate that simply imposing an across the board tax charge is in essence entirely stupid.
The average size farm in the UK is in the 300-400 acre area, and the typical profit margin of farms is between one and two percent. So imposing a 20% IHT burden on these small businesses is likely to result in many of them becoming unviable, as they have to sell off land to be able to meet the tax charge.That means no farm left to pass down the generations. Farming in the UK - although very low margin, so not a huge money-earner for the farmer - is actually rather efficient, at least in part precisely because the family nature of a large part of it ensures a genuine connection between land and farmer. That matters, because what farms produce is food, and a secure supply of food is a prerequisite of life. If the land shifts into the hands of national or international conglomerates - who would be the natural buyers as small farmers have to sell to pay their IHT - then we would be reliant upon their investment decisions, which would offer no guarantee of supply to the local and domestic market.
The current Secretary of State for Environment, Food and Rural Affairs, is a man called Steve Reed. When asked about the implications of this budget policy, his comment was “Farmers will have to learn to do more with less”. When I look at his background, I find that he is MP for an inner London suburban constituency, and his experience is as a Councillor in another inner London borough. I hesitate to be ungracious towards anybody, but after that comment, I wonder if he has ever set foot in the countryside and whether he assumes food comes from the supermarket, so what’s all this fuss about rich farmers??? After all, aren’t they just like the kulaks in revolutionary Russia all those years ago?
This policy is a serious mistake; we are governed currently by people who are endangering our energy security, and now seem to wish to follow the same course with food. Current opinion polls seem to demonstrate buyers’ remorse is affecting many who voted for them; but that doesn’t help right now.
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