The NFU has today met with the Defra Secretary of State and
Treasury officials to stress the significant impact changes to
Inheritance Tax (IHT), as outlined in last week's Budget, would
have on British food and farming.
In the meeting, NFU President Tom Bradshaw outlined exactly what
this would mean for family farms across the country, the knock-on
impact on homegrown food production, and the stress and anxiety
these planned changes are causing.
Speaking about the meeting, Mr Bradshaw said: “I've spoken to a
huge number of our members in the past few days and heard some
really upsetting accounts of what this tax would do to family
farms.
“I've heard about distressed elderly parents who are having to
apologise to their children in tears for something that isn't
their fault, telling them they're sorry because they feel they're
now a burden on the family. I've heard from families who can't
see any way they can plan for a future which doesn't result in
losing their business. Men and women who've spent years building
up farm businesses now wondering what's the point in carrying on
when it's going to be ripped apart.
“These are the working people of the countryside, and I made it
clear to Defra and the Treasury today that there has been a clear
miscalculation of the impact this will have on them. The Treasury
has got its figures wrong1. This policy won't protect
family farms, it will do the opposite.
“Treasury officials have assumed that all previous Agricultural
Property Relief (APR) claims are working farms, which is not the
case. Nor did these claims include those eligible for Business
Property Relief (BPR). Far from protecting smaller family farms,
which is what ministers say they're doing, they're actually
protecting private houses in the country with a few acres let out
for grazing whilst disproportionately hammering actual,
food-producing farms which are, on paper, much more valuable.
Even Defra's own figures show this, which is why they're so
different to the Treasury data this policy is based on.
“With Defra data showing two thirds of farms could be affected,
it was good to hear that the Treasury would look at the
discrepancy in figures.
“I also asked if there were plans for an impact assessment of
this policy on homegrown food production. Because if farms are
being broken up and sold, British food will be hit. There is a
very real threat to our long-term food security because there is
no incentive to invest for the future.
“With businesses already running on unsustainably tight margins –
mass flooding meant that many haven't turned a profit this year –
compounded with further costs from National Insurance and
National Living Wage increases, farming families have nothing
left to give.
“At last year's NFU Conference, we heard from Sir that ‘Losing a farm is not
like losing any other business, it can't come back'. He was
absolutely right. It can't. And neither can its ability to
produce food for the nation.
“That's why the only sensible course of action is for the
Treasury to reverse this decision.
“The pressure is building. Defra and the Treasury are aware that
on 19 November, NFU members will be making their way to
Westminster to take part in our mass lobby of MPs. We will be
looking them in the eye and asking if they support this family
farm tax, or if they will do the right thing for their farming
constituents and support our call for it to be reversed.”
-ends-
Notes to editor:
- The Treasury has said 73% of APR claims are below £1 million
and so would be unaffected by this policy. However, Defra's
figures show that only 34% of farms are under £1 million net
worth.
- The Treasury's figures are based on past APR claims and do
not consider farms that have also claimed BPR for diversified
aspects of their businesses.
- They also include a substantial number of smallholdings, with
27% of those Treasury figures being for assets under £250,000,
and another 23% under £500,000.
- Very few viable farms are worth under £1 million. That could
buy 50 acres and a house today. No viable food-producing business
is 50 acres. The average farm in the UK is more than 250 acres.
