via https://nitter.poast.org/csmaje/

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https://nitter.poast.org/tommlancaster/status/1858518977179181553#m

Tom Lancaster @tommlancaster
Nov 18
For me, the government reforms of Agricultural Property Relief (APR) miss two big opportunities
1. The political opportunity Labour had coming in to win over more farmers & ‘deep rural’ voters
2. The policy opportunity to use APR more imaginatively

A 🧵 on what I mean…

Politically, I just don’t see how the £100-200m that the APR reforms raise are worth the cost
Labour had a generational opportunity coming into power to be the party of farming
Farmers were pissed off with the Tories, and many were open to an alternative

Although not electorally important based on just numbers, farmers are keystone voters
In the same way ex-coal miners voting UKIP gave red wall voters social permission to vote for a party other than Labour, farmers not voting Tory in July had a similar effect in rural seats

This willingness to ‘give Labour a go’ from farmers could have provided a platform on which to build a pro-farming progressive platform based on…
💷 funding for green farming
🐓 fair trade deals
🛒 supply chain reform
🇪🇺🇬🇧 less trade friction
🍓 an ambitious food strategy

What this clumsy APR reform does is remove this platform, squandering this rare opportunity for Labour to be heard amongst an electorate rarely inclined to listen to them

For climate & nature people (like me), more problematically it also makes it harder for government to have a conversation with farmers on all the hard stuff we need them to do on
🌳 net zero and climate adaptation
💧 water quality and cleaner rivers
🐝 nature recovery

You can argue about the numbers & who will and won’t be hit - and for what it’s worth I think the Treasury numbers are well off - but it’s the loss of this opportunity and collateral damage these reforms create that present the bigger cost for this government in the longer term

On policy, APR was (and is) a potentially hugely powerful lever for change
In ag policy land, we’ve traditionally relied upon
💷 Incentives
📋 Advice
🏑 Regulation
Reforming APR was always the thing that ‘couldn’t happen’

Now that it has, it’s depressing to see it done with so little imagination
For example, you could in theory use APR to do two things
a) incentivise greener farming
b) reward longer term tenancies

On (a), land entered into one or more of the new @DefraGovUK green farming schemes (or devolved equivalent) could qualify for a higher level of relief
This would help drive uptake & save money on the deadweight options in the Sustainable Farming Incentive designed to do this

On (b), government could make APR at higher levels of relief conditional on letting land for ten years or more (with some exclusions) @tenantfarmers have suggested this, and @hmtreasury even consulted on it last year
gov.uk/government/consultati…
Taxation of environmental land management and ecosystem service markets
The government is seeking views on the taxation of ecosystem service markets and the potential expansion of agricultural property relief from inheritance tax.
gov.uk

These two (other ideas are available) would drive more sustainable farming, create more security of tenure (making more sustainable farming easier for tenants) & deliver on wider government objectives
And all for a sum that is barely a rounding error in a HMT spreadsheet

I’m not saying APR wasn’t in need of reform
It was
I just don’t think it needed *this* reform, which is (in my opinion) bad policy, and worse politics

All the signs are that the government intend to dig in
I can see why they would - no government will u-turn on its first Budget in 15 years
But I think they have some room to manoeuvre short of a u-turn

Namely, they could spike the ‘tax on sudden death’ narrative by announcing some transitional mitigation for those farm business owners over 70
And beyond this could also suggest room to append the reforms with complementary policy when legislation comes forward next year

In this way, if they were to choose to realise the policy missed opportunity above, they could go some way to mitigating the political cost the current reform plans will levy
I can’t see them doing it, but I really wish they would

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Smaje's initial scribblings:

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https://chrissmaje.com/2024/11/newsflash-no-3-lights-in-a-dark-age/

I’ve been tracking some of the fierce debates on social media arising from the announcement in Chancellor Reeves’ recent budget that, within various limits, farmland in Britain will be subject to inheritance tax for the first time. I’m interested to hear views about this. Generally, I’m in favour of inheritance taxes as a way of defusing unearned privilege and keeping society’s goods well distributed among the population so they can do their most effective work. Although this does depend on trusting the tax-raising power with people’s hard-earned money, which I confess is a stretch these days.

But there are two problems with the proposal as I see it. One is that the real estate value of farmland is out of all proportion to the money you can make from producing food from it. So although the allowances in the budget seem generous on paper – 100% relief on the first £1 million of combined agricultural/business property, which probably means most members of the public will give the tiny violin treatment to farmers’ complaints about it – nevertheless it might make it harder to keep financing production out of land equity as many farmers do, and without careful long-term succession planning the new tax could result in next-generation farmers having to break up the farms they inherit and downsize.

I don’t have a problem with smaller farms as such – I did write a book called A Small Farm Future after all – but it looks to me like the new rules are going to disproportionately hit what effectively are small farms within the parameters of our existing absurdly industrialised economy. There’s already what some call a ‘missing middle’ between non-commercial or semi-commercial smallholdings like mine and vast, uber-commodified industrial concerns. I fear the new policy is going to hollow out the middle even more. Arguments are flying about how many farms and farmers it will affect. Not many, say the government. Well, maybe not, but there aren’t that many to begin with.

The other problem is that corporations don’t die and don’t pay inheritance tax. It seems likely that a lot of the farmland passing out of the hands of family farmers as a result of this policy will end up on corporate balance sheets. And if I don’t trust tax-raising governments, I trust land-buying corporations a great deal less.

So I think the position I’ve come to is that, yes, the government should signal a long-term intention to levy inheritance tax on farmland, once it’s sorted out the imbalance between too-low food prices and too-high land and housing prices. The IHT policy might help on the latter front, but other policy levers could come first – maybe a ban on corporations from buying farmland? Or, better, since corporations are viewed as legal persons, perhaps they should now be treated as actual persons and liquidated after three score years and ten, with all assets subject to taxation and wide dispersal upon liquidation. What are the odds of that finding its way into a government budget?