Ann Mallalieu: Labour’s tax policy puts the future of family farms at risk

First published on Monday 18 November, Countryside Alliance President, Ann Mallalieu, writes for the Express on Labour's farm tax policy and how it will put the future of family farms at risk.

For more than a decade the Countryside Alliance has been encouraging Labour to heal its rift with the countryside.

When Keir Starmer spoke at the National Farmers Union conference last year and pledged a “new relationship with the countryside” I had thought that the party had grasped how politically damaging the long and bitter fall out between Labour and the countryside has been.

Then, in the General Election, Labour won swathes of rural seats and those of us who had worked so hard to get the party back to a place where it was trusted by rural voters looked forward to a productive relationship between rural communities and a Labour government.

All that work, however, has been undone by one stroke of Rachel Reeves’ pen and whilst I am certain that her policy of raising inheritance tax from farms is a misunderstanding, rather than a deliberate attack on the farming community, it has the potential to be every bit as toxic as the bitter battles over hunting.

I farm on Exmoor and if you put a value on my neighbours’ farms they would, on paper, be millionaires. Not many people would believe that, however, if you met them at South Molton market and they would not consider themselves wealthy either.

The nominal value of their farms is largely irrelevant to them because they have absolutely no intention of selling them. To a woman or a man, their only goal is to pass on that farm to the next generation in the same, or better, condition that they inherited it themselves.

In the meantime the farm provides a living for them, and often for their parents too, but that income is modest and bears no relation to the supposed value of their asset. Farming is not a logical business. Economists would laugh at businesses whose profits are less than 1% of asset value, but that is perfectly normal in farming.

Despite the low returns from farming, the value of farmland has risen inexorably as demand for land for non-farming uses such as rewilding, carbon offsetting and renewable energy has grown, and also because some non-farmers have been exploiting the tax status of farmland.

Farms have been exempt from inheritance tax because successive governments have understood that raising inheritance tax on farmland would lead to the breakup of exactly the family farming model which is so central to the British countryside.

Some non-farmers have been abusing that exemption and buying farms so that they can pass them on to their heirs without being liable for inheritance tax.

Closing a loophole to stop people avoiding tax is a legitimate aim and Rachel Reeves is perfectly justified in addressing that.

What she has not done, however, is to do what she also promised and protect family farms whilst doing that.

The threshold she has set for inheritance tax is completely unrealistic and my farming neighbours and others all across the country are now terrified that dying at the wrong time will see farms that have been in the same families for generations broken up to meet the demands of the tax man.

That is why I will be protesting with thousands of other farmers in Westminster on Tuesday, when hundreds of us will also be lobbying our new Labour MPs. Our ask is simple.

This is not about the government backing down or having to do a U-turn.

Tackling tax avoidance is the right thing to do, but a Labour government that cares about the countryside must ensure that it also protects the farming families who are the backbone of the British countryside.

Failing to understand the devastating impact this change would have both on farming and Labour’s relationship with the countryside would be very bad politics.

The full original publication can be found here.