Food prices to be driven up by Labour's inheritance tax hike, farmer warns, as industry to be 'decimated' by change
11 November 2024, 09:37
Nick Ferrari speaks to Jamie Blackett
Food prices are set to be driven up by the inheritance tax increase imposed on farmers, a farmer has warned.
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Jamie Blackett told LBC's Nick Ferrari at Breakfast that Labour was "taxing aspirational people" who would otherwise want to put the cash back into their farms and grow their businesses.
Chancellor Rachel Reeves said on Wednesday that while there would continue to be no inheritance tax on combined business and agricultural assets worth less than £1m, above that there would be a 50% relief, at an effective rate of 20%, from April 2026.
Labour have said that the change would not affect over 70% of farms and agricultural property.
But the move has sparked fury among farmers, with campaigners hitting out at the government for breaking "clear promises" to protect the industry.
Some farmers are threatening to blockade ports and leave supermarket shelves bare in protest at the move.
Mr Blackett pointed out that "the problem with farming is that you are asset rich and cash poor," making a tax bill hard to bear without selling up.
Campaigner argues that the government is 'intent on ending farmers' way of life'
He said that "actually, all that's going to happen with this is it's probably going to feed into the price of food, because that money has to be found from somewhere."
Some supermarkets could also increase prices because of Ms Reeves' increase to employers' national insurance, which she also announced in the Budget.
Mr Blackett added: "If I don't do any tax planning at all, if I die in the next 20 years, probably quite likely, given my age, then my son would probably have to find about £100,000 a year for ten years to keep going, to keep farming.
"And if I do try to do something about it and take out life insurance, if I can get it to pay for the the death tax when it comes then that's a huge cost on my bill, on my business."
Mr Blackett, a former army officer and former political candidate for a party that stood against Scottish independence, said that the move was not socialism but "crony capitalism".
He said he himself bought his farm in 1996, having been a tenant previously. "Now that we've had the temerity to go from being tenants to owner occupiers, we're now in in the target zone for Labour," Mr Blackett said.
He added: "It's purely hitting the family farm, and I don't understand why Labour is taxing aspirational people who want to invest in their farms, grow their businesses.
"We we now have this threat to our businesses, probably once in every generation, twice, if you're unlucky, and you know that's going to add a huge cost to our business.
Mr Blackett said farmers would understand if Labour brought in "some sort of land tax that would affect all farms equally."
Instead, he said, the government are "singling out owner-occupied farms, most of whom were tenant farms, until sometime in the 20th century."
Mr Blackett told Nick that he didn't think the problem was at that drastic level yet, and hoped that the government "would see sense".
He added: "I hope that they will think again, but if they don't... then clearly, we hold a lot of the aces."
Many other farmers have also expressed concern about the increase in inheritance tax.
One farmer took his own life to avoid a tax raid ahead of the Budget, his son said.
Jonathan Charlesworth said his father John had been "eaten away” by the thought of his family losing their £2 million estate, which had been in the family for nearly 70 years.
Meanwhile Henry Ward, a farmer in Lincolnshire, told Nick after the Budget that he was "filled with worry and dread" over the Chancellor's decision."
"I farm in partnership with my grandfather, who is 85 years old. He owns the majority of the land that we farm," Mr Ward said.
"If he dies at the wrong time under this Labour government, we'll be faced with a tax bill of around a million pounds. That could finish us and it's a huge concern."
Jeremy Clarkson accused the government of "shafting" farmers with the changes after the Budget.
"Farmers. I know that you have been shafted today," he said. "But please don’t despair. Just look after yourselves for five short years and this shower will be gone."
The head of the British Farming Union, Steve Ridsdale said that the changes will "decimate the industry".
Tory MP Neil O'Brien said: "She has gone way, way too low with the threshold for agricultural property – this is the end of the family farm."
Watch Again: Nick Ferrari is joined by Chancellor Rachel Reeves | 31/10/24
Speaking to Nick after the Budget, Ms Reeves said that the majority of landowners will not be affected by the changes.
"What I would say is that 73% of farms and agricultural property will not be affected at all by these changes," she said.
"They will pay no more inheritance tax. So this does protect farms.
"So 27% will be affected, but with a discount on inheritance tax of 20% compared to 40% that others pay."
