Tom Bradshaw accuses Rachel Reeves of 'refusing to engage' with NFU over inheritance tax row
The National Farmers’ Union has accused Rachel Reeves of “refusing to engage” with it over the inheritance tax row which sparked mass protests in London yesterday.
Measures announced in the Chancellor’s first Budget could see farmers pay an effective rate of 20 per cent inheritance tax on assets over £1 million.
Previously, farmers were exempt from inheritance tax to allow family farms to be passed down through the generations.
President Tom Bradshaw claimed that the NFU had “offered to meet with the Treasury to give them solutions to this, unfortunately, so far, Rachel Reeves has refused to engage”.
He said: “I’ve given a heartfelt plea to the Chancellor to sit down with me so that we can sort this policy out.
“The human impact of this policy is one I don’t believe they intended, but the longer they leave this hanging I’m going to start to think it’s vindictive rather than miscalculated.”
The NFU and other farming groups are disputing government claims that only a few hundred farmers will be affected by the changes.
The Treasury has maintained that 27 per cent of claimants of agricultural property relief will be impacted, however The Yorkshire Post understands this includes all rural landowners, such as people with small holdings.
Defra’s most recent figures from the 2022-23 financial year found the average net worth of a farm was £2.2m, while 49 per cent of farms had a net worth of at least £1.5m.
The Chancellor has said that in some cases the threshold could in practice be about £3m, if couples combine their own personal inheritance tax allowances when passing on their land.
While analysis by the Country Land and Business Association suggests a “typical” arable farm of 200 acres (80 hectares), making a profit of £27,300, would face an IHT liability of £435,000.
The farm would have to allocate 159 per cent of its profit each year to cover the tax bill, if spread over 10 years, and may lead those inheriting the land to sell as much as 20 per cent of their farmland, the CLA said.
During the NFU mass lobby in Westminster yesterday, Mr Bradshaw told The Yorkshire Post that his union believes that 75 per cent of working farmers, which is classed as those with more than 50 acres, will fall into the scope of the policy.
“We don’t know that they’ll be impacted, because we don’t know when people are going to die,” he explained.
“But what we do know is that if there was a tragic accident tomorrow, they would be caught absolutely in the eye of that storm.
“The very fact that we’re even arguing about the figures says that the foundations of this policy are very weak.”
Mr Bradshaw also claimed that the Treasury did not consult the Department for the Environment, Farming and Rural Affairs before announcing the policy.
Speaking about the Budget as a whole, including the inheritance tax changes, the NFU President said he was sure it would push food prices up.
“We’ve heard a lot about the retail cost increases for national insurance, but you’ve got to compound that for the whole industry that sits underneath them,” he explained
“Everybody has those same rises going through their businesses, that has to be reflected at the retail shelf because our members have absolutely nothing left to give. We’ve been milked dry.”
A Government spokesperson said: “Ministers from both HMT (Treasury) and Defra have regularly engaged with the NFU, including the Secretary of State, Farming Minister and Exchequer Secretary.”