Rachel Reeves' farm tax will “radically change” our favorite countryside in Britain as big corporations exempt from inheritance tax buy up swathes of the land, a rural MP has warned.
This came after the Chancellor hit previously exempt farmers with a 20 per cent inheritance tax on assets over £1 million, threatening the existence of many cash-poor but asset-rich farms.
Tim Farron, Liberal Democrat MP for Westmorland and Lonsdale in the Lake District, warned: “What will happen to these people if this policy becomes a reality?” Well, I'll tell you what happens.
“They have to sell the farm, or at least parts of the farm, more likely the whole farm.” And who will they sell the farm to? It won't be the neighboring house or the neighboring family farm because they are in the same predicament.
“Who will it go to? The big corporations. Because it turns out that there are many reasons to buy up land in the country.
“You can buy it up to make sure you benefit from bogus compensation programs and a whole host of other things that entice people to buy land in beautiful places like mine and do anything but farm it.
“This is morally wrong. Evicting people earning less than minimum wage from the countryside, a Lakeland eviction as we would call it in our part of the world.
“Large private equity firms will take it on, in London or, more likely, abroad. That's not egalitarian. That's not progressive. This is immoral. And that’s wrong.”
Government statistics show 17 percent of farms in the UK failed make a profit in 2022/23, while 59 per cent made a profit of less than £50,000.
Modeling by the Country Land and Business Association showed that inheritance tax bills, calculated based on a farm's value rather than its income, wipe out many farms' profits for up to a decade at death.
Tim Farron speaks at the recent Business Property Relief summit
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Farron said: “Typically you have to spend £20,000 a year let us say, over a period of 10 years to pay for that [inheritance tax] Invoice.
“Well, if your income is 15,000 a year, at any level of the Bank of England you don't need to have excellent maths skills to be able to do these tasks, no matter what role you held there, sums and understanding that is completely unthinkably untenable .”
Farmers struggling with adverse weather, environmental laws and slim profit margins from giant supermarkets have warned that many will simply be sold out, threatening food security in the UK.
Farron warned: “It is also wrong because it takes land away from active food production.” Only 55% of the food we eat in the UK is produced here in the UK. And that’s wrong, and that’s stupid, and that’s stupid.”
Such developments would also change our beloved landscape as families who have cared for “their” piece of land for generations give up farming.
Farron said: “I think of the lakes and valleys of Cumbria. 20 million people visit it every year. After London, this is the largest visitor destination in the entire United Kingdom.
“People come not just because the hotels are beautiful, but because the landscape is beautifully maintained and protected and made accessible by generations of farmers.”
The Lake District is the second most visited region in the UK after London
In response, Labor said its commitment to farmers remained “unwavering”.', point out It is Largest investment ever in sustainable food production.
Rachel Reeves and Environment Secretary Steve Reed refuse to budge on inheritance tax, insisting it is a “fair and balanced” way to plug the £22bn black hole.
This claim is based on the Treasury Department's highly controversial analysis that only 500 farms will be affected per year.
This analysis has been the subject of intense debate, with several leading experts strongly criticizing it as “not remotely representative” and “something that will never happen in real life.”
This is because the Treasury came up with the number 500 based on 2021 Agricultural Property Relief (APR) applications.
As well as only covering one year of data, it also did not take into account farmers' Business Property Relief (BPR – also capped by Reeves) claims for things like machinery.
The campaign by pundits to highlight this has even led Dan Neidle, a left-wing academic and farm tax supporter, to change his position on Reeves' crackdown.
As more pundits highlight the cruelty of a tax crackdown that is expected to raise a paltry £520m a year, critics are questioning why Labor is pushing ahead with the policy.
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Steve Reed claimed farmers were in the House of Commons “for the money”.PARLIAMENTLIVE.TVFarron said: “The narrative being put out there is that farmers are wealthy, wealthy people who should pay inheritance tax like everyone else.”
“And that is complete nonsense when you understand the reality of life in the lakes and valleys.
“The typical farmer in my community sits on a farm that might be worth millions of pounds, but they usually earn significantly, significantly less than the minimum wage.”
Victoria Vyvyan, president of the Country Land and Business Association, said farmers were being accused of “hoarding wealth”, suggesting Labor wanted to redistribute land ownership in Britain.
Farming star Jeremy Clarkson believes Labor is simply targeting a section of society it believes are “Range Rover-driving millionaires” who don't vote for them.
Labor claims the policy is all about funding public services and supporting farmers.
But Steve Reed did little to back up that claim yesterday when he sparked anger by saying farmers were only in it “for the money”.
The environment secretary, who represents an urban seat in south London and had a career in publishing and local government before becoming an MP, said: “The shadow secretary of state and the former prime minister keep telling farmers that they are not in it for the money. We know they are.
“These are businesses that need to make a profit and our new deal for farmers, including increasing fairness in the supply chain, aims to make farms profitable and successful for the future in a way that is possible under the previous government was not the case.”
Labour's tax rise will come into force in April 2026.