Ministers have been warned that they face a “militant” backlash from farmers over the so-called tractor tax of imposing inheritance death duties on family farms worth more than £1m.
The warning came from National Farmers’ Union (NFU) president Tom Bradshaw as he met with environment secretary Steve Reed over the shock measure in the Budget, while a protest has been planned for 19 November when angry farmers are set to descend on London.
The row over inheritance tax changes came on top of a lack of extra funds for farming in Rachel Reeves’ announcements last week coupled with extra costs through increases in national insurance for employers and a 6.7 per cent rise in the minimum wage.
The crisis in British farming saw a senior MP warn during exchanges in the Commons remind ministers that the farming sector has one of the highest levels of suicide and the changes in the Budget could exacerabe a mental health crisis among farmers.
During an urgent question in parliament, Tory MP Sir Geoffrey Clifton-Brown, himself a farmer, read out an email from a distraught 75-year-old farmer from his constituency raising the potential impact on the mental health of farmers.
He said: “How would the minister answer my 75-year-old farmer who emailed me last week. He said: ‘We work long hours, usually alone, agriculture has one of the highest suicide rates of any industry. There is a great deal of talk these days about mental health and the need to alleviate stress in the work place. Yet the chancellor and the secretary of state for agriculture last week destroyed everything I ever worked for.’
“How would he answer that?”
Farming minister Daniel Zeichner responded: “I would reassure him that I am afraid I don’t think he is correct on that. We are absolutely determined to make sure he can hand on his farm as others have done before.”
After his meeting with the Secretary of State earlier in the day, Mr Bradsaw said that the “tractor tax” raid through changing inheritance rules on farmland which had previously been exempt was “completely unfair”.
He said he had never seen “the weight of support, the strength of feeling and anger” over the plans to impose inheritance tax on farms worth more than £1m, and added that many farmers wanted to be “militant” over the issue.
Under plans announced in the Budget, inheritance tax will be charged at 20 per cent on farms worth more than £1m, although the chancellor has said that in some cases the threshold could in practice be about £3m.
The move has caused a considerable backlash from farming and countryside communities, and led to a dispute over just how many farms and farm businesses would be affected.
Speaking after a meeting with Mr Reed and exchequer secretary to the Treasury James Murray, Mr Bradshaw challenged the figures from the Treasury, that only a minority of farms would be affected.
He said: “Obviously, we fully dispute the figures the Treasury has been using and we’ve played back Defra’s own figures.
“So, the Treasury is saying only 27 per cent of farms will be within scope of these changes, Defra’s own figures suggest that two-thirds of farms will be in scope.
“How they can have that wide a discrepancy within government is quite unbelievable.”
He said he had been receiving calls from people in their middle age who have been running successful businesses, but whose parents were still in the family house and partners in the business, and might not live for seven years, which is the minimum time after a transfer of assets for inheritance tax not to apply.
Mr Bradshaw said: “There’s no way through it for them.”
And he said: “We will continue to try and work with the government to get to a resolution but something has to change.
“I have never seen the weight of support, the strength of feeling and anger that there is in this industry today.
“Many of them want to be militant.
“Now we are not encouraging that in any way shape or form, but government need to understand that there is a real strength of feeling behind what this change means for the future of family farming in this country.”
Bizza Walters, 26, a freelance presenter and fourth generation farmer from Warwickshire, said there is “no way” her family could afford the tax bill if her father and uncles passed down their 500-acre farm to her and her cousins.
On listening to the Budget with her dad, Ms Walters said: “We both just looked at each other and thought: ‘Oh my god this is just going to cripple our industry.”’
Ms Walters warned that youngsters will start to look for alternative careers away from farming, like herself, further threatening the UK’s future food security.
“I want to be working full-time on the farm because it’s what I love and it’s the industry I want to be in but actually I’m quite glad I’ve got an alternative career now,” she said. “It’s really sad because it’s what I want to do. I’ve grown up here... I’m fourth generation.”
The chancellor Rachel Reeves told the BBC’s Sunday With Laura Kuenssberg: “Only a very small number of agricultural properties will be affected, but last year the benefits of agricultural property relief, 40 per cent of the benefit, was felt by 7 per cent of the wealthiest land owners.
“I don’t think it is affordable to carry on with a relief like that when our public finances are under so much pressure.”
But the NFU said that many family farms have a high notional asset value, but very low income and liquidity, which means that the vast majority of owners would be unable to meet the inheritance tax charges, without selling assets.
The issue was raised in an urgent question in the Commons by the new environment, food and rural affairs committee chairman Alistair Carmichael.
Responding to a barage of criticism from oppostion MPs, farming minister Daniel Zeichner said: "Can I share her very strong points about the importance of the family farm? That is what we are doing here. We are protecting the family farms."
"On almost every visit, and I've visited right round the country over the last five years, I've heard people telling me that they are concerned about people coming from outside, coming up with a lot of money and over the heads of local people, buying up local farmland, not because they care about farming but to use it for tax evasion purposes. So this is a policy that can be helpful to family farms and protect them"
A number of MPs questioned government assertipons that the new tax would only affect one in four farms. Mr Zeichner claimed though that the £22 billion black hole left in thegovernment finances by the Tories meant “difficult decisions had to be made”.
**_If you are experiencing feelings of distress and isolation, or are struggling to cope, The Samaritans offer support; you can speak to someone for free over the phone, in confidence, on 116 123 (UK and ROI), email jo@samaritans.org, or visit the Samaritans website to find details of your nearest branch._**
