Since the Budget, the NFU has been at the front and centre of lobbying for a reversal of the proposed family farm tax. The Efra Committee inquiry is just the latest parliamentary activity in the ongoing campaign against the Chancellor’s changes to inheritance tax.
The evidence session lasted two hours during which time MPs were able to put their questions directly to farming representatives, economists, tax experts and legal professionals.
The Committee heard from NFU President Tom Bradshaw, CLA President Victoria Vyvyan, TFA National Chair Robert Martin, CAAV Secretary and Adviser Jeremy Moody, IFS Senior Research Economist David Sturrock and Howes Percival LLP Partner Stuart Maggs.
Lack of consultation
The session began with questioning from Jenny Riddell-Carpenter MP (Lab, Suffolk Coastal) who asked what discussions the NFU, and other panel members, had with the Treasury prior to the Budget.
NFU President Tom Bradshaw raised the conversations the NFU had with Labour while the party was in opposition, where the Defra Secretary Steve Reed said that his party had no plans to change inheritance tax including APR if it won the election.
“Unfortunately with all the other changes in the Budget, along with this one, it feels like this covenant has been broken.”
NFU President Tom Bradshaw
Following this, Tom highlighted the complete lack of formal consultation on the proposed changes.
During meetings with Defra and Treasury Ministers, Tom relayed that the NFU had offered to work with the government to find a solution, but that the Treasury were unsure of the question they were asking themselves in what they want to achieve from this policy.
Impact on mental health
In a moving exchange, Tonia Antoniazzi MP (Lab, Gower) asked how the proposed change to inheritance tax is affecting the wellbeing of farmers and raised concerns about the mental health impacts.
In his response, Tom cited the countless examples being sent through from farmers across the country on the unintended, but very real, consequences these changes could have.
The Committee heard about the “awful, unacceptable position” for those individuals who are deeply concerned about their parents. In a point of clarification, Tom reiterated the fact these farmers “have spent the very best money on tax planning advice, and until the Chancellor sat down, the correct advice was to keep the farm until death”.
Policy design
Andrew Pakes MP (Lab, Peterborough) questioned the panel on the motivation for the government’s policy and sought reflections on what it is trying to achieve.
Answering, Tom highlighted that any changes to APR and BPR should be based on personal wealth as opposed to business wealth which would likely see a very different proposal from the government.
Once again, Tom stressed that consultation is absolutely vital and extended the offer to work with government to “get an outcome that works for all rather than the blunt instrument we have today”.
Relationship between farming and government
Summarising the historic and current relationship between farming and the government, Tom said: “Ever since World War II, there has been a covenant between farming and government – that farming gets on and does its job of producing food, and it’s never really been about the returns, it’s been about that way of life, that heritage, that custodianship.
“Unfortunately with all the other changes in the Budget, along with this one, it feels like this covenant has been broken.”
NFU work in numbers
Since the Budget we have seen:
- 220 meetings with MPs at the mass lobby.
- More than 70 questions asked on APR and BPR.
- 10 PMQs on APR.
- 6 briefings for MPs and Peers.
- 3 meetings with Food Security and Rural Affairs Minister.
- 2 meetings with Treasury Ministers.
- 2 meetings with the Defra Secretary.
- 4 motions in the House of Commons supporting the overturn of the Family Farm Tax.
- 1 meeting with Efra Select Committee Chair.
- 1 meeting with Shadow Secretary of State.
- 1 meeting with the PM.
- 1 urgent question in the House of Commons on the implications of the budget for farming communities.
- 1 general debate on rural affairs, in which APR was raised dozens of times.
- 1 debate on mental health in farming in which APR was raised dozens of times.
- 1 debate in the Lords on ensuring the continuity of farming families.
Disrupting the figures
Josh Newbury MP (Lab, Cannock Chase) asked about the discrepancies in the figures of the number of farms that would be impacted by the changes to APR and BPR.
In his response, Tom highlighted the latest research, commissioned by the NFU working with former Treasury and Office for Budget Responsibility economists, that found around 75% of commercial family farms will be above the £1 million threshold compared to the 27% suggested by the government.
Wider issues
While the inquiry mainly focused on APR and BPR, Tom stressed other disappointing aspects of the budget beyond APR and BPR that are hugely inflationary for food production.
With changes to Employer National Insurance Contributions and the National Living Wage, Tom highlighted concern for horticulture and the intensive sectors who are worried that they’re not going to be able to pass on those increased costs.
The Committee also questioned the panel on wider profitably issues for the farming sector where Tom discussed important standards, fairness in the supply chain and, in particular, concerns about the ELM schemes which Tom also called for an inquiry into.
With a cumulation of issues affecting the industry, Tom reflected: “There’s so many other priorities which were already on a burning platform, and we’ve added something else to the pot.”
Praise for the NFU
A number of Committee members commended the work of NFU President Tom Bradshaw and expressed immense gratitude to farmers up and down the country for both the work they do day in and day out, but also their engagement during this time.
Beyond Efra
As soon as the Efra Committee session ended, it was straight into Prime Minister’s Questions where criticism of the family farm tax was raised multiple times by Leader of the Liberal Democrats Ed Davey MP and Conservative MP for Broadland and Fakenham Jerome Mayhew MP.
