The head of the National Farmers’ Union (NFU) has accused the government of an extraordinary “betrayal” over its budget changes to inheritance tax for agricultural properties, as he addressed hundreds of farmers who have travelled to London to lobby their local MPs.
Speaking to about 600 farmers at Church House in Westminster, Tom Bradshaw described the government measures as a “stab in the back”, after the sector had been previously told that taxes such as agricultural property relief (APR) would not be changed.
“I don’t think I have ever seen the industry this angry, this disillusioned, this upset,” Bradshaw said, describing the measures as a “shocking policy, built on bad data, and launched with no consultation with anybody that understands”.
Visibly emotional when talking about the “human impact of this policy”, Bradshaw was applauded by farmers as he paused his speech to compose himself.
He warned that government measures, also including changes to national insurance contributions, coupled with a competitive retail environment the measures would push up food prices, describing it as an “inflationary budget for food production”.
Bradshaw’s speech to farmers came as thousands of food producers gathered close to Downing Street, flanked by tractors, at a separate rally.
Previously, farming businesses qualified for 100% relief on inheritance tax on agricultural and business property. But now the tax is being imposed on farms worth more than £1m, with an effective rate of 20% on assets above that threshold, rather than the normal 40% rate for inheritance tax.
Ministers say the actual threshold before paying inheritance tax could be as much as £3m, once exemptions for each partner in a couple and for the farm property are taken into account.
According to the Treasury, 27% of estates claiming APR were above the £1m threshold in 2021-22, suggesting that nearly three-quarters of farms would not fall within the scope of the charges.
The NFU has rejected the government’s claims that most farms will not be affected by the change, and believes instead that it will apply to 75% of what it calls “commercial farm businesses”.
A group of farmers from Wales and Wiltshire attending the NFU lobby said they believed all of their farms would fall into the remit of inheritance tax under the budget measures.
Sarah Godwin, a dairy and egg farmer from Wiltshire, said her 78-year-old parents-in-law are still actively involved in the business, which has been in the family for a century, and felt “horrendous” about the inheritance tax changes.
Philip Greenhill, a beef and arable farmer from North Wiltshire, said there was “no correlation” between the earnings from a farm business and its asset value.
“You could have £5m of assets, but make £50,000 a year profit, depending on how you farm that. If you have got that you are looking at maybe £600,000 inheritance tax off a £50,000 income,” he said.
Holding a sign reading “farmer harmer Starmer”, Sue Hosegood, a Devon dairy farmer, and her husband, William, said they were worried for their three sons who are involved in the business. “There is no future if we have to pay tax every generation,” William said.
The NFU said it had the support of the general public for its protest against the tax changes, and said more than 200,000 people had backed its campaign against the measures.
Bradshaw called on ministers to return to the negotiating table to work out how to target wealthy landowners who have been buying land to avoid inheritance tax.
The host of Clarkson’s Farm, Jeremy Clarkson, is also due to speak at the rally on Tuesday. Clarkson told the Times in 2021 that avoiding inheritance tax was the “critical” factor in deciding to buy his Cotswolds farm.
On Monday night, Bradshaw told Newsnight it was “probably not helpful” for Clarkson to turn up to the protest. The former Top Gear presenter has been used as an example of a wealthy person who was not previously a farmer but bought land to avoid tax – the kind of person intended to be caught by the changes.
A No 10 spokesperson said on Tuesday that the government maintained that changes announced in the budget were “balanced and proportionate, and that only around 500 claims a year are expected to be affected”.
She added: “We don’t underestimate the concerns and the strength of feeling, and we want to continue to have a dialogue with farmers and communicate how this works and listen to any concerns.”
