Labour’s farm tax is pure class war
Socialists targeting landowners is nothing new, but don’t expect the countryside to take Labour’s punitive farm tax lying down, says James Price
“Buy land – they ain’t making any more of it”. With apologies to the Dutch and their reclamation efforts, this has been solid investment advice for a long time.
But that’s about to change. Not content with increasing taxes, increasing borrowing, and spreading a general sense of doom across Britain, Chancellor Rachel Reeves has also determined that the Great British family farm must suffer, too. Apparently the government ‘can’t afford not’ to remove the inheritance tax relief that has enabled farms to be passed down through the generations. This relief will now be capped at £1m and 20 per cent charged on agricultural property in excess of this.
Worrying ignorance
This betrays a worrying ignorance of how farming actually works Many genuine food-producing farms will have large assets and land holdings, but very slim profit margins. These farmers are not wealthy and their children are now facing the very real prospect of having to sell ancestral land. That’s not only devastating for them personally, but a threat to food security.
Few have done more to highlight the harsh reality of rural life than Jeremy Clarkson. The policy has led him to dub Reeves “the most stupid, blinkered idiot ever to occupy No 11”. Meanwhile, NFU president Tom Bradshaw has said: “Let’s not sugar-coat this, every penny the Chancellor saves from this will come directly from the next generation having to break-up their family farm.”
Jeremy Clarkson has called Reeves “the most stupid, blinkered idiot ever to occupy No 11”
Why then, are Reeves and the environment secretary, Steve Reed, so deaf to this plight? Reed is on record as saying, quite callously, that farmers will have to “learn to do more with less”. I fear that this comes down to pure class warfare.
Socialists have long been suspicious of landowners – a trend which found its fullest expression in the Soviet Union’s forced collectivisation of agriculture in the 30s. This was explicitly framed as an effort to liquidate the kulaks – affluent peasants who Stalin regarded as opposed to his regime. The end, and inevitable, result of ‘dekulakisation’ was despair and famine.
Labour governments are nowhere near so extreme, but no less motivated by class hatred. Just as Tony Blair targeted country pursuits like fox hunting, this government wants to go after the aristocrats and billionaires it wrongly believes own all the land in Britain. This also explains their disastrous VAT hike on Britain’s world-beating independent school sector, as well as the punitive tax raids on capital gains. But it is ordinary farmers – the very definition of ‘working people’ – who will be caught in the crossfire. Many will end up selling their land to international conglomerates who will stick solar panels all over it. Great news for the likes of Red Ed, less so for anyone moved by notions of England’s green and pleasant land.
There is another historical example that should give Labour pause: the Xiaogong farmers in China. Suffering under the collectivisations of Mao and the ensuing starvation, these farmers agreed a secret pact to ignore the communist diktats and grant each family its own plot of land. If a family grew a lot of food, they could keep some of the harvest. It was the same land and the same equipment, all that changed was the incentives. “We all secretly competed,” recalled farmer Yen Jingchang, “everyone wanted to produce more than the next person.”
At the end of the season, their harvest was bigger than the last five years combined.
That huge harvest gave them away, and it was only thanks to the ascendancy of the reforming premier Deng Xiaoping that they were celebrated instead of shot. This powerful example shows the importance of ownership to output.
Britain’s pastures are in danger, but you can bet the farm that the countryside won’t take it lying down.