The farming sector “is bewildered and frightened of what might lie ahead”, with farmers saying changes to inheritance tax are the biggest issue regarding viability they face, a review for the government has found.
Farmers have repeatedly protested against the changes since they were announced last year, which will see them pay tax on inherited agricultural assets worth more than £1m at a rate of 20 per cent.
The farm profitability report by former National Farmers’ Union president Minette Batters has called for a “new deal for profitable farming” that recognises the true cost of producing food and delivering for the environment.
The terms of the review by Baroness Batters did not include the controversial changes to inheritance tax, but she said it was raised as the single biggest issue regarding farm viability by almost all respondents to her review.
The review comes amid an atmosphere of hostility to the Labour Party in the countryside, with farming communities believing that they were misled by Sir Keir Starmer before the election over his promises to support them.
The issue saw Lancashire Labour MP Cat Smith clash with Sir Keir earlier this week when he appeared before the Commons Liaison Committee.
She warned that he had pulled “the rug from under family farms”, that those who had voted Labour felt “misled”, and that some farmers with terminal diagnoses were trying to “expedite” their own deaths so they could pass on their farms before April.
Another MP, Markus Campbell-Savours, who represents the rural Cumbrian seat of Penrith and Solway, has been suspended from the Labour parliamentary party over voting against the government on the issue.
NFU president Tom Bradshaw welcomed the report, but added: “The ball is now in Defra’s court. Ministers have to drive these priority areas forward. But alongside this, there are other immediate actions that are needed to boost British farming, like providing much-needed clarity and certainty on the future of the Sustainable Farming Incentive and doing the right thing on the pernicious inheritance tax changes.”
In the review, which was commissioned six months ago and has had publication delayed twice, Baroness Batters warned that the sector had faced a sharp rise in costs and increasingly extreme weather, with severe drought this year.
Uncertainty surrounding the closure of applications to the sustainable farming incentive scheme – the main post-Brexit agricultural payments – and proposed changes to inheritance tax had created “significant” ongoing concern, with some farmers questioning the viability, let alone profitability.
The government has indicated that it will not formally respond to the report immediately but insisted that it is already putting action in place to help farmers.
Environment secretary Emma Reynolds said: “When farming thrives, the whole country benefits. British farmers are central to our food security, our rural economy and the stewardship of our countryside.
“Baroness Batters’ review underlines the need for government, farming and the food industry to work much more closely together. That is exactly what the new Farming and Food Partnership Board will do.
“This is about serious action to remove barriers, unlock investment and make the food system work better, so farm businesses can grow, invest and plan for the future with confidence.”
Tory MP Matt Vickers said: “The report Labour commissioned on farming profitability shows the cruel reality of Rachel Reeves’s family farm tax. Farmers say it’s the biggest issue they face – and they are frightened about what might lie ahead.”
Source: UK Politics - www.independent.co.uk
