Rachel Reeves’ tax bomb threatens my family’s future – our farm may not survive

I’m 74 and my husband is 75, and until the recent budget life was still hard, but good. When I looked over our dairy farm this morning, the cows had been milked and are either lying down chewing the cud in the cubicle building, on their new comfy mattresses, or out eating their silage in the yard. The calves and young stock have been fed as well and are lying down on the deep straw. I should feel happier than I do.

We’ve had many struggles over the years, not least the large overdraft, milk quotas, low milk prices and TB; it was often difficult to pay the bills. But just when we should be handing on to the next generation and enjoying our grandchildren, a bomb has taken off in the form of and her recent budget.

Like many farmers, we had a bad feeling in our stomachs, and a realisation that our lives had been turned upside down for ever. Before the election, had assured us that he would not be changing the nil rate of inheritance tax for farmers. This had originally been put in to ensure that farms could be passed through the generations. Now we’re told that farms and business assets valued at over £1 million or £2 million for a married couple, will be taxed at death at 20%, payable over ten years. To a non-farmer that sounds reasonable and many people may not understand why it is so devastating for family farms like ours.

Because of my background, I feel I am in a unique position to explain to non-agricultural people the terrible plight that is facing farming at the moment. I grew up in the middle of Cardiff but always had a great love of animals and the countryside and after university was lucky enough to get a job as a travelling farm secretary.

This eventually led me marrying into one of North Wiltshire’s oldest farming families, and joining a farm which has now been in the same family for one and a quarter centuries. It has a herd which was established in 1910 and I was lucky enough to take charge of the breeding of the cows many years ago. Because of all this, I can completely understand what farming is going through at the moment, but I am not sure that my relations back in Cardiff do.

I couldn’t blame them for ignorance or their lack of understanding but it is lack of knowledge that is of great concern, and it is a lack that is shared by Rachel Reeves and much of the new Labour Government. When I was young, any millionaires stood out as being extremely wealthy men. Today to say that a farm is worth more than one million pounds sounds excessive, but a million pounds is nothing with inflated land values due to people buying in to escape inheritance tax. Did Rachel Reeves actually act from a lack of knowledge or was its malicious intent?

The Central Association of Agricultural Valuers has pointed out that with nearly everyone else, the Government has vastly underestimated who will have to pay the tax and, instead of hitting the wealthy farming investors, has clobbered most of the family farms. Previously at probate, took the value of the capital items on the farm books which were at historical cost value. As there was no tax to pay, they did not investigate further. Now, values will be taken at an up-to-date valuation and will be a lot higher. If farmers are forced to sell land to pay this tax, their farms will become too small to be viable. We need our farms to be able to expand, not forced to contract. With climate change around the world, demonstrated by earthquakes, floods and droughts, we need as much home-produced food as possible, not to put its production in jeopardy.

This is why there are so many protests, from farmers, and their supporters. An immediate response was the big march in London, estimated by the organisers at 40,000 on the streets, followed by the tractor demonstration with 600 tractors driving past Parliament, demonstrations in country towns with support from many county councils and many huge petitions, with the NFU’s standing at nearly 275,000 signatures. Another large protest meeting in London is planned for January 25th.

The food industry itself is huge, and when famers feel the cold, it impacts on all their suppliers, cake merchants, vets, contractors, dairy suppliers etc. If contractors have to sell up it impacts further on farmers being able to get things done.

As a painful example, a smaller family farm of 180 acres like ours is still captured in the net. Land is likely to be valued by at £1,800,000, business assets £750,000, cattle £500,000 all of which comes to over 3 million with the farmhouse to be taxed and valued on top.

An isolated house in the countryside is easily worth well over £1 million nowadays. So, a small farm farmed by a couple could find itself paying 20% tax on at least a million pounds, £200,000 payable over 10 years. For a farmer without a wife, it could be £40,000 a year. What young person will want to start their working life with this kind of debt to be paid out of low farming profits?

For us, we’ve gone overnight from a position where we could pass our farm on to our children tax free, to one where they will be saddled with an enormous debt, unless we pass on land and live for seven years. It’s not pleasant to have to start looking at each other to work out who will die first.

It’s now my life, my children’s life and my grandchildren’s future at stake and this is causing great distress to me and my husband at a time of life when we should be coasting along surveying the fruits of success of our many years.