What's behind Labour's farm inheritance tax raid?

Corporatizing the countryside & farmers don't vote Labour

This article was originally published in the Farmer’s Guardian in mid-January. All articles published elsewhere are published free here; but for paywalled articles & postscripts, subscribe below.

Can Labour’s detestable Farm Inheritance tax hike – raid – get any worse?

It’s already pretty bad. As Neil O’Brien MP pointed out on X as it was announced, Reeves had ‘gone WAY WAY too low with the threshold for agricultural property - this is the end of the family farm.’

He is sadly right; £1M does not go far in modern agriculture. At a price of £10,000 per acre – a figure now decades out of date – that means a farm of a hundred acres will be subject, not figuring in any equipment or farm buildings. Factoring just half a million pounds in assets means a farm of just 50 acres will be subject. For context, the average UK farm size is 202 acres.

The Treasury argues that the projected increase in tax revenue is too significant to overlook, estimating in the Budget Red Book that reforms to Inheritance Tax will generate £520 million annually by 2029. However, questions have arisen regarding the accuracy of these figures. In response to an FOI request, the Treasury admitted it has not calculated the specific revenue impact of each individual tax change. This lack of detailed analysis raises concerns about the groundwork done before announcing the policy; surprisingly, the Treasury has also acknowledged that its projections are heavily based on the research of a single far-left academic.

However Labour try to spin the figures, this is going to hammer farmers. I predicted at the time that this would be a disaster for farming; family farmers would sell up, big ones would hoover up and internationals would move in. That prediction is now been confirmed by Charlie Ireland in The Times, who declared ’Labour’s tax raid is the worst crisis I’ve seen in farming’; ‘Some of the biggest acquisitions of UK land in recent years have been made by overseas pension companies and sovereign wealth funds’, he wrote. ‘These institutions will be unaffected by tax changes and are likely to become more active buyers of land when smaller farmers sell. So I think you will see a move away from family farms in favour of corporate farming businesses.’

It is scarcely credible that such a momentous decision could be come to on the basis of such scanty evidence. Unless, of course, you consider another possibility; after all, if the intention of the policy is to prise more of Britain’s land out of the hands of farmers and into the hands of corporations, then this is a perfectly rational policy.

The fact is that farmers are an inconvenience to Labour’s intended use of the countryside. Under Labour, housing targets for rural authorities have skyrocketed, whilst those for major cities like London and Birmingham – where the housing crisis is most acute – have been cut. The housing targets for Tower Hamlets – which returns two Labour MPs – has been cut by 56%. The housing targets for my own North Yorkshire – which returns two Labour MPs but twice the number of Conservative MPs – has been raised by a staggering 211%.

But we will not just lose land to housing. Labour’s plan to ‘Make Britain a clean energy superpower’ largely rests on the idea of achieving a carbon-free grid by 2030, and includes installing a billion solar panels by 2035. Since generating one gigawatt of solar energy requires 10–11 square miles of panels, this would necessitate roughly 750 square miles—an area comparable in size to Greater London. While rooftop solar installations are generally uncontroversial, much of this expansion is expected to involve solar farms on farmland in England and Wales.

That, of course, is not to mention an estimated 4,000-5,000 new onshore turbines to be built, mostly in England. Or that Ed Miliband’s plan requires a far more dramatic 119,850% increase in energy storage capacity than the outlined 30 GW. That means we will require a huge increase in land to house batteries, flywheels, pumped hydro and liquid air energy storage. 

Put simply, Labour have other plans for farmer’s land than careful stewardship and food production. Corporatizing the countryside makes it far easier to cover vast swathes of the non-Labour voting countryside in solar panels and houses; alongside making a living, farmers have a concomitant commitment to preservation. Corporations - particularly those not based in or with no connection to Britain - would have no hesitation in ripping up land for such ventures. Their only commitment is to profit maximalisation for shareholders; convenient, then, that Labour are making it easier to snap up farmland whilst offering economy-cripplingly huge subsidies to build renewable energy and to override the planning system in order to force houses through.

Previously, Agricultural and Business Property Relief existed to mitigate the risk of IHT charges resulting in the break up of viable businesses when they are passed down the generations. That made perfect sense; farms are family-run businesses, not personal property.

But whatever the logical or moral rationale for returning to the previous arrangement, it does not matter. Labour need land; there is a five year plan to fulfil. It will only cost us our natural inheritance, and your children their actual inheritance. As Wordsworth wrote; ‘Is then no nook of English ground secure from thy rash assault?’