Farming protests

[David Newton]

There was a big protest today in London at Theeves and Two Tier's tax increases on farms. The cartoonist of the Telegraph did his usual wonderful job of capturing the zeitgeist of things in a really funny way.

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[Bernard Woolley]

I wonder if Matt, or anyone else at the Torygraph has bought farmland to avoid tax? You know, making it more expensive and unavailable for actual farmers?

[Johnnie Lyle]

I wonder if Matt, or anyone else at the Torygraph has bought farmland to avoid tax? You know, making it more expensive and unavailable for actual farmers?

Probably, but honestly pretty much everyone pursues a tax dodge wherever possible, to hell with the consequences to others.

Seen newspapers do some really crazy expensive shit to dodge a little tax, despite hemorrhaging money hand over fist.

So wouldn’t be surprised at all to discover individual or institutional tax dodges at the Torygraph - or pretty much anywhere else they thought of it, probably amongst the tax supporters too.

[Bernard Woolley]

We should not, therefore, be surprised that certain media outlets, opened by rich people, are stoking protests by people they have screwed over. Convincing them that they’ll be affected when most won’t. When governments close tax loopholes, follow the money when there are protest.

[Johnnie Lyle]

We should not, therefore, be surprised that certain media outlets, opened by rich people, are stoking protests by people they have screwed over. Convincing them that they’ll be affected when most won’t. When governments close tax loopholes, follow the money when there are protest.

Or that the counter-editorials are also funded by rich people who get rich on the new loopholes.

Or the tax lawyers who get rich either way.

[Bernard Woolley]

Both are possibly true.

[Johnnie Lyle]

Both are possibly true.

They’re a safe bet.

Sadly tax policy is usually a shell game of everyone trying to make someone else pay while benefiting their preferred group, and then backends to ensure that connected someones don’t pay too much. The end result is a very complex, inefficient and manpower intensive tax system which is effectively a bunch of unnecessary cancellations.

Which has spawned entire industries to profit off.

Or, to quote Avery Tolar in The Firm:

Being a tax lawyer's got nothing to do with the law. It's a game. We teach the rich how to play it so they can stay rich. The IRS keeps changing the rules so we can keep getting rich teaching them.

[Pdf27]

I wonder if Matt, or anyone else at the Torygraph has bought farmland to avoid tax? You know, making it more expensive and unavailable for actual farmers?

Hard to track down - Viscount Rothermere (owner of the Mail and i) owns 4,700 acres in Dorset and "more than 300 acres" in Wiltshire, both held by offshore trusts to dodge tax and purchased relatively recently. The 1st Viscount owned around 10,000 acres - I can't find anything to show it was ever sold.

[Simon Darkshade]

In the alternate, or even in addition to any concerns held by the powerful, it could be that there could be many thousands of farmers genuinely concerned by the proposed measures. The scale of protests from a group not given to such action does not suggest an entirely concocted issue.

British farms are, naturally, smaller than those here, but the cost of land per acre does mean that even a very small farming business is nominally over the arbitrary threshold. There are a lot of those, and more than just 477 farms would be affected.

[Bernard Woolley]

I’m sure they are, Simon. But, it does seem that in the main they are being mobilised to support the interests of the wealthy. Where were the protests against the trade deals with Australia and New Zealand? Both very damaging to U.K. farming. Where were the protests about dumping of raw sewage into rivers?

It’s not the first time that ordinary people have been convinced by the wealth to act against their own interests, or in the interests of said wealthy.

[Simon Darkshade]

Based on the available information, I don't believe that they are being mobilised to act against their own interests. I'd say that there isn't any evidence that I've seen, to this point that, 'in the main', this is being driven by the wicked wealthy.

A farm worth 1 million quid or even 2 million does not translate to the farmers being wealthy; indeed, they can be up to their eyeballs in debt and not making any profit at all for multiple years. It isn't as fungible an asset as a house in the hands of someone willing and capable of selling.

Inheritance tax is something that goes to the heart of the essence of farming for many people - the ability to work the land and pass it on to your children to do the same. It isn't the 'Big Farms' that will be impacted by this, as they have higher profit margins due to farming economies of scale, as well as the ability to divest themselves of certain properties. But Farmer Giles of Ham, operating a small cereal and sheep farm nominally worth 1.2 million, is utterly buggered.

Reeves' recent justification that these measures are needed to 'save our NHS' don't pass the sniff test, nor do the Government figures on only 477 farms being affected.

[Zen9]

A policy that might hit some 500 small farmers per year is not a policy that permits small farmers to remain in business over the course of the next decade or two.
But it will definitely benefit the likes of investors in property construction, 'renewable' energy schemes, and corporate agriculture.
Who will benefit far more than Government coffers.

The irony is the supposed target of this inheritance tax change is much more likely to avoid it by various mechanisms devised by expensive lawyers and accountants than by small farmers with little cash to pay for such services.
Almost like it was intended to target small farmers from day 1.
And again a certain class of people who make up such lawyers and accountants benefit greatly.

One might get all political and note farmers represent a potential rival power, ideologically linked to land, rootedness, tradition, family, the long view, and a tendency to really need divine intervention.
The very opposite of the modern Labour Party or indeed the upper echelons of the modern Conservative Party...or the LibDems and their support in the middle class and Civil Service....though to be fair some LibDems be openly supportive of the farmers. Because their constituencies be rural.

One might even note that gathering together in common cause opens the potential for an organised minority......one that connects the wealthy with those who could actually disrupt in significant manner the fragile JIT systems run by the Elite. Rather like the Canadian Truckers.

[kdahm]

It's just a reversion to the 17th to 19th century tenant farming system. Except that instead of lordly landholders, it'll be corporations snaffling up all of the fields and paying the former owners and heirs to be farming it. The smart people, especially those with bigger estates, have already divested personal ownership of the actual land, shifted it to a corporation, then owned the voting shares in the corporation. They then gradually transfer ownership of the non-voting shares to their heirs, so that when they die they have all of the control but only 5% or so of the assets.

Tax law is strange in that the tax avoidance industry persists as long as the cost of tax avoidance does not exceed the cost of the tax. If paying the taxes is less than paying the tax attorneys and accountants, then the people would just pay the taxes. Therefore, complicating the system to close loopholes and tax dodges just makes it more complicated, and increases the size of the industry dedicated to finding and exploiting tax dodges and loopholes.

[Pdf27]

It's just a reversion to the 17th to 19th century tenant farming system. Except that instead of lordly landholders, it'll be corporations snaffling up all of the fields and paying the former owners and heirs to be farming it. The smart people, especially those with bigger estates, have already divested personal ownership of the actual land, shifted it to a corporation, then owned the voting shares in the corporation. They then gradually transfer ownership of the non-voting shares to their heirs, so that when they die they have all of the control but only 5% or so of the assets.

That's literally what has been happening since this exemption was first introduced in the 1980s. For example James Dyson (he of vacuum cleaner fame) now owns 36,000 acres of land primarily as an inheritance tax dodge - presumably worked by tenant farmers or agricultural labourers working for a larger company.
This effect appears to be one of two primary factors driving up land prices and making small farms unviable - the other one being a rule which allows you to dodge capital gains tax if you sell your farm to build houses on it and buy another farm with the proceeds. If you want to have small farmers in the future, the only way to ensure their survival as a species is fundamentally to drive down land prices and make large estates unviable.

My view is that including farmland in inheritance tax - with the relief open to everyone that property passed on more than 7 years prior to death is exempt from the tax, with taper relief after that - is addressing a major issue with the current system and will be to the benefit of family-run farms as a species in the long term. Having said that, I am not at all surprised that farmers are upset by this, for many reasons:

1. Historically, they have voted Conservative as a group for centuries. Labour is a party that has always been weak in the countryside, and have really upset farmers in the past. Indeed, this is all a storm in a teacup by historic standards - they got 400,000 on the streets of London in 2002. The idea that British farmers are not prone to action of this sort is very much not true - they're just much less militant than French farmers!
2. Farmers have a strong financial interest in the value of their land being pushed up as a tax dodge. They are mostly ageing as a group, frequently with children who don't want to take on the family business. The current situation gives them an extremely valuable asset they can pass on tax-free to their heirs, who can then sell at an inflated price. So they're very much acting in their own interests, if not in ways which the rest of the public are likely to feel supportive of.
3. Given that profit margins on actually farming are very slim at the moment and subsidies have been cut a lot post-Brexit, they're feeling pretty bruised as a group. The actions of the previous government in reducing tariff barriers to overseas food products only made things worse, leaving them feeling attacked on all sides. The fact that this particular change hits a sub-group with the resources and platform to effectively make a noise about it is what pushed it over the edge into being noticed.

[Bernard Woolley]

Watched this video recently. I don't pretend to understand all of the economic bits he talks about. However, the point that changes to inheritance tax may drive down land values, thus meaning people like Dyson are less likely to buy land, is an interesting one.

[Simon Darkshade]

There is a certain implication in the characterisation of farmers as 'protesting against their real interests' as them being simple folk, easily deceived and not able to articulate their interests. Caricatures of the Wurzels singing about their new combine harvester, if you will.

Let us go from the top:

- Farmers are inherently not happy people and will always find something to moan about: A reasonable statement...

- 'So let's not get overly upset about the fact that farmers are suddenly getting a bit angry about the fact that Labour has had the temerity to impose a very small inheritance tax charge on them which is much more favourable than that which is going to be paid by the rest of society on their homes and their assets and so on' - Leading to an eminently unreasonable characterisation, where not only does the premise not support the conclusion, but works to devalue any concern held by farmers; minimises the impact upon them, their families, their heritage and their livelihood; and does so in language and imagery that deliberately backends the latter half of the sentence with loaded terms. Mere typing doesn't capture his patronising tone or emphasis on particular words

The subtext of this introduction is: No need to get worried about protesting farmers; they moan about everything; this is a very small and good measure; these simpletons don't know which side their bread is buttered on

- An outline of basic economic theory on the factors of production: Boilerplate stuff

- An example of a farm with 3 million worth of land and 1 million worth of capital/equipment

- He undershoots the real cost of capital farming equipment, such as tractors, headers and combine harvesters, with the latter averaging 500,000 apiece. Most of this equipment would be acquired through bank loans, entailing them acquiring a personal property security interest in the machinery; long story short, the nature of this arrangement means that the farm is working towards paying off equipment, rather than any rate of return. Throw in depreciation and they become income sinks, albeit vital ones. The manufacturer isn't the only one getting a return on equipment, but also the lenders who hold PPSIs in the capital equipment

- He presupposes that many farmers are able to pay themselves a wage. Just like many small business owners, their margins are so tight that they are on the literal bones of their backsides and can't pay themselves; we see the practice of farm wives taking up extra jobs and various other attempts to try and bring in income. Assuming that they make 50,000 quid is more supercilious guff not reflective of the facts on the ground for the smaller farmer. This is then followed by an unspecific and generic description of the role of entrepreneurship to conjure up a further 50,000 pounds of theoretical profit

- This is done in a roundabout, characteristically university professor fashion to reach the point whereby farmers don't make money off the land, don't make a profit through entrepreneurship and make a loss on labour. If he started from this point, he would have saved 8 minutes of very basic stuff to get to the nitty gritty

- He does miss out some other associated costs to farmers, such as seed/crop, additional labour, chemicals and fuel/power

- 'Why are farmers complaining about inheritance tax then, when it is something else that is wrong in farming?'
One rather obvious answer is that, if you are already beset by a multitude of woes, and someone comes along and kicks you in the goolies, you don't bewail the bad weather or your neglectful parents, but the immediate pain in the groin. That is simply natural and only something curious to those insulated from the reality of life inside academe

- The price they are being paid is simply too low: Correct. However, to hearken back to the previous point, this is already something that is in place. Add in another straw and we get towards the point where Mr. Camel may need to make an urgent appointment with a chiropractor

- The forces lined up against farmers: Brexit, large food manufacturing companies and supermarkets. Apparently, it is Big Food and supermarket price gouging that forms the big problem, and where they need protection - from government ensuring that they are. From a sliced loaf of bread worth 2.50, a farmer gets 0.09p; from a piece of cheese worth 1.14, 0.05p; and from beefburgers worth 3.50, 0.01p

- Why has farmland suddenly gone up in value? Because some people are buying a great deal of farmland. Apparently, farmland has been acquired as a tax dodge and isn't being used in the food production process; Professor Murphy doesn't provide any proofs or specifics beyond one generic unnamed example. Land being used as a tax dodge is nothing new, nor confined to farms

- 'So the farmers actually should want an inheritance tax charge on this land because if there was an inheritance tax charge on this land, it would no longer have a value for financial purposes. It would only have a value for farming purposes. And for farming purposes, it has no value at all, which means actually they can pass on their estates to their children however they like with no tax charge arising'

Farmers don't want circumstances where they never earn any money, and the current bad circumstances/bad years are theoretically evened out by good years and good harvests. Almost like a cycle. The longer that Professor Murphy went in that last sentence, the more dripping in patronising sarcasm his tone.

Looking at Professor Richard J Murphy's video titles, we can see a bit of a theme emerging:
Trump is making America poor again
Might we drop the dogma from politics?
Trump's tariffs are bad new for everyone
The IMF is worried about a low growth future when that is exactly what we need
Trump scares me rigid
When it comes down to it, 'stuff' doesn't matter that much
What is the point of the Tories
Wes Streeting really does want to privatise the NHS
Why is Keir Starmer so obsessed with denying the free movement of people?
The national debt need never be repaid
Pay rises for teachers and the NHS will pay for themselves
Labour needs to abolish the hereditary peers

He seems to be of the modern monetary theory school, distinctly left leaning, consumed with worry over a certain American President-elect and very much in favour of particular politics and economics. Watching stuff from him will support one particular point of view.


Bottom line: Why is this change to inheritance tax on farmers necessary, and necessary now?
The justification that it is necessary to 'save our NHS' doesn't have the ring of truth to it.
The amount being raised is quite derisory, and offset by discretionary expenditure many times larger.
The stubborn insistence that this will only impact less than 500 farms does fly in the face of evidence presented to the contrary.

Whatever the reasoning, this was a fight that did not need to be picked, even for a government with a very large majority. It cuts into something very raw in the nature of farming - being able to pass on the land to one's sons. Whatever the monetary value that is derived from this, and other land value potentially associated with farmers being forced to leave the land, this hasn't been worth it for Britain.

(I have to leave it there now, as I have to go to work, so I didn't quite get to cover his last 2 minutes, but there is nothing in this that is revolutionary or difficult economic theory above a Grade 7 level. His logic, similarly, is at that middle school/junior secondary debating level.)

[Pdf27]

Whatever the reasoning, this was a fight that did not need to be picked, even for a government with a very large majority. It cuts into something very raw in the nature of farming - being able to pass on the land to one's sons.

I'd say the government are going to do well out of this. The last budget was full of cuts and tax rises, and the group that gets all the public attention from the protests are a bunch of rich people headed by a multi-millionaire TV personality who are protesting at being asked to pay much less tax than the rest of the population. Facebook comment sections for instance - normally a feast of slagging off the government - are 90% "pay up you rich tax-dodging bastards".
It's worth reminding people of "Taper Relief" in UK inheritance tax law here - anything you give away as a gift more than 7 years before your death is exempt from inheritance tax, rising to the full rate 3 years before you die with a sliding scale in between. Barring the odd tragedy (which can be easily and cheaply covered by term life insurance), small family farmers will be long retired before they fall into the IHT bracket - and the public at large who have to deal with the same rules (with a much lower £325k threshold) know it.

Whatever the monetary value that is derived from this, and other land value potentially associated with farmers being forced to leave the land, this hasn't been worth it for Britain.

How is Britain at large affected? The land will still be farmed by the same people no matter who owns it or the value of the land, and the workforce involved is less than 1% of the total UK workforce - about the same number of coal miners who lost their jobs in the 1980s in fact.

[David Newton]

I'd say the government are going to do well out of this. The last budget was full of cuts and tax rises, and the group that gets all the public attention from the protests are a bunch of rich people headed by a multi-millionaire TV personality who are protesting at being asked to pay much less tax than the rest of the population. Facebook comment sections for instance - normally a feast of slagging off the government - are 90% "pay up you rich tax-dodging bastards".

Those Facebook commrnt sections are clearly populated by envious and ignorant people then. Calling the farmers "rich" and for them to "pay up" automatically shows gross ignorance. Land is NOT a liquid asset. Paying up requires liquid assets.

It's worth reminding people of "Taper Relief" in UK inheritance tax law here - anything you give away as a gift more than 7 years before your death is exempt from inheritance tax, rising to the full rate 3 years before you die with a sliding scale in between. Barring the odd tragedy (which can be easily and cheaply covered by term life insurance), small family farmers will be long retired before they fall into the IHT bracket - and the public at large who have to deal with the same rules (with a much lower £325k threshold) know it.

Except that the public are not in the main dealing with businesses which are going concerns. However it should also be pointed out that due to the massive delays in probate and the huge property price inflation of recent years and the utterly illegitimate freezing of that £325,000 amount there are many people having to take out loans to pay inheritance tax falling due on iliquid assets not actually controlled by them yet due to lack of grant of probate. And that's with iliquid assets that will be realised for cash after grant of probate rather than a food producing business that should be kept as a going concern.

As for taper relief? Nope. That sort of gifting requires absolutely no monetary gain or benefit from gifted assets after the gifting. Farms include the farm house where farmers happen to live. Continuing to live there for anything other than a commercial rent is benefit from gifted assets and thus destroys the taper relief.

How is Britain at large affected? The land will still be farmed by the same people no matter who owns it or the value of the land, and the workforce involved is less than 1% of the total UK workforce - about the same number of coal miners who lost their jobs in the 1980s in fact.

Objection! Assumes facts not in evidence.

"The land will still be farmed by the same people, no matter who owns it". Nope. Utterly unwarranted assumption. It might be used for housing or have solar panels put on it or be used for "rewilding" or forestry. All perfectly reasonable possibilities. There are others.

As for effects on the rest of the country? Try massive food price inflation and/or starving. On top of the last burst of inflation and the other tax rises that would mean serious trouble. Food riots do have a tendency to be extremely nasty. Nothing to lose and acute problem causing the riots dear boy.

[Zen9]

Thoughts....

Farming and land ownership touches deep nerves in the psyche of the average Brit. The majority care more about food supply than the import of exotic status foodstuffs for the middle class and it's only natural to care about the domestic farming industry.
One must remember as peoples buying power decreases, (due to inflation, especially of property ownership/rent and increasing taxes) the relative size of their finances take up by basic survival foodstuffs increases. As they shed the little luxuries and pleasures, and ultimately even useful things to just keep going.
Anything that threatens that, such as increasing reliance on imports subject to external 'events' only increases anxiety and fear.

Where I live, the houses be rising in value above that 325,000 figure and properties that were valued at just 270,000 in 2021, now seem set to breach that threshold....if they haven't already.

But the land also exerts a deep pull on the mind, and while it might be but a daydream for the average soul. They nevertheless would buy land if they could. In the common currency of culture this is A Return to the Land, the Hero's return from his labours, the undoing of the brutality of the Industrial Revolution.
They would if interrogated about this, express a desire to be able to pass on such an acquisition to their children, and wistfully imagine it becoming the Family Seat, an inheritance to pass through the generations.
Perhaps even to be able to live off it, farming it, without recourse to the interventions, compromises and commerce imposes on life in the town or city.
It might all be a dream, and a mythic ideal that most will never achieve. But the majority would never disapprove of those lucky enough to make it reality.

Independence from the intrusive state, from the impersonal city, is a natural desire. We were not made for that life. The village, the Shire is where the Englishman is most at home. While modern terminology has this as 'The Englishman inhis Castle', it would be more accurate to allude to the Freeman on his Hide of land. Owing only Toll Tax and Team.

Now insert the harsh reality of this inheritance tax, which will force many a small farmer off the land. Dispossessed for the sake a heartless metropolitan elite and yet worse. This tax makes that dream seem ever more impossible, more beyond their hope and places even those who achieve that dream subject to it's crushing under the heel of a ever more intrusive and authoritarian elite. "back the city, worker (slave)" is their message.
Where farms will be bought up by corporate interests, for which food is....not profitable.
This hits deep nerves.

Naturally Labour desires that dreams destruction, only an enslaved proletariat shorn of all opiates can bring about the Socialist Utopia.
After all as the Communists use to say "those who work, eat".

Naturally a Metropolitan Elite, view Farmers as a Rival Castle. Something that must be destroyed, as all Rivals must.
Which hints that Farmers, like the Miners, represent just such Rivals.

Naturally the Rootless, who don't even feel or understand the connections of land and community, of inheritance of property. Would like Mongol Horsemen looking at Chinese peasants toiling in the fields view the Rooted as superfluous humans, in way, taking up resources that 'rightfully' belong to them. "Just kill them, it's not like we need them, their not doing anything useful", is their answer, which of course brought about a severe famine in China.

[Simon Darkshade]

I will note that Facebook comments sections are a haven for confirmation of our own biases, due to the nature of the site and its algorithms. That is why we've seen people so shocked at various election and referendum results over the last decade, as the nature of social media discourse has insulated them to a large extent from contrary views.

I would suggest further that characterisation of farmers as rich tax-dodging bastards might not reflect the actual public view of them, but simply a view of them from one particular group. If there is a belief that the Starmer Labour Government is going to do well out of this, then I would suggest that time will tell. I openly acknowledge that there is a chance that I won't be right about this, just like with every other event or issue. We will see how this turns out.

Further, there is a significant amount of evidence that this isn't simply a storm in the teacup, but in a reasonable number of cases, could be the straw that breaks the camel's back for farmers and the communities around them. The social costs of sacrificing communities aren't something that I'd go so far as to blithely note; the circumstances of the 1980s coal miners' situation aren't something that should be emulated.