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Farmers and inheritance tax: separating the facts from the furore

NICK WRIGHT sets the record straight on the controversy that has been whipped up by wealthy right-wing windbags like Clarkson and Farage, which will only really affect a tiny minority of super-rich land hoarders

OUR land should be held in common.

Farmers took to the streets on Tuesday to protest against inheritance tax changes that affect just a few hundred super-rich landowners.

And the far-right fascist fringe has been joined by Reform UK figures who see opportunities in the campaign to block tax changes that end concessions that further enrich the very rich.

Why are farmers protesting against having to pay just half the inheritance tax that others pay?

The ruling class regards the countryside as its territory. And in a very real sense, it is. The patterns of land ownership in Britain reflect the ways in which ruling-class power has excluded working people — the subaltern classes — from not only access to the land. Feudal rights to feed families and to graze livestock, gather firewood, hunt for game and forage were lost hundreds of years ago.

Parliament — from which the common people were in their millions excluded — passed Enclosure Acts, which formalised their exclusion from the land and its bounty.

In the half-century from 1770 until, incidentally, the last point in which our fast-industrialising country remained in rough harmony with nature, 6 million acres of common land were appropriated by the landed classes.

This transformed farm workers into paupers or wage slaves, only able to live if they migrated to the towns to find employment in the new factories or work for the richer farmers for a wage.

By the beginning of the 19th century, the class of small-holding peasants had almost entirely vanished, and a traditional way of life, miserable but more or less certain, had vanished, and people found themselves subject to an uncertain market in human labour.

There are sharp debates among historians about the precise role of the different factors entailed in the upsurge in rural revolt that took place in the 1830s.

But there is little dispute about the scale of the rising. In their work on this subject, the Marxist historians Eric Hobsbawm and George Rude identified over 1,500 incidents of rick burning and cattle maiming while the houses and barns of rich farmers were torched.

It was the changes wrought by capitalist development and the post-Napoleonic war recession which underlay the revolt. “Enclosure dissipated the haze which surrounded rural poverty and left it nakedly visible as propertyless labour.”

Read their work, and the names of Kentish villages and hamlets today are familiar as pleasant places where only the well-heeled can afford to live. And just a short cycle ride away in the tiny village of Hernhill lie the bones of the martyrs of the last armed uprising in England.

In Kent, big landowners today farm some of the richest agricultural land. They exercise decisive power at the county level, and their profits rest on the highly exploited labour of migrant workers whose entry is licensed by a government ever subservient to their wishes.

Until the last election, when Tory minister Helen Whatley’s Faversham vote was cut from 30,187 (62 per cent) to 14,816 (31.8 per cent), this constituency was regarded as perennially safe for whoever the Tory Party might nominate.

Not now. The main factor halving the Tory vote was a big vote for Reform UK, and it is Nigel Farage’s privately owned vehicle that plans to capitalise on a farmers’ campaign against the loss of inheritance tax concessions that have benefited rich farmers for years.

There are reminders of the Gilets Jaunes protests in France in the way this campaign is framed and echoes of the Countryside Alliance rallies a few years ago. These were multi-class movements manipulated by the rich but mobilised by genuine problems experienced by rural communities.

Richard Tice — whom Farage sidelined — pointed out that he could see the point of ending the tax relief for the rich. Farage shows no such sensitivity to the concerns of Reform UK’s diverse following and tries to meld all kinds of grievances, most particularly against Labour’s malign and maladroit measures against pensioners and, perennially, migration.

Drill down into Reform UK’s electoral base, and the contradictions emerge. A majority share the general antipathy most British people show towards the rich and the very rich and, by and large, share the same kinds of ideas about the necessity to improve public services, safeguard the NHS and restore public utilities to public ownership.

Thus, the populist base of Reform UK — a majority although not a decisive one — has no natural sympathy for rich farmers who are able to avoid paying the same level of inheritance tax as other people.

Of course, the overwhelming majority of people in Britain and almost all farmers are nowhere near being liable for a punitive inheritance tax.

Fewer than one in 12 estates actually pay any inheritance tax. It is an issue for a very small proportion of the richest people. It is a super-rich person’s issue, as 96 per cent of estates pay no inheritance tax.

But such is the fetish of ownership and the mist of mystification that the Establishment media cast over inheritance that over a third of people polled last year thought their assets might be captured by the state.

What are the facts?

When we die, inheritance tax is liable above a £325,000 threshold. But there are any number of exemptions, including allowances for passing your home to your children or grandchildren.

Any estate valued less than £325,000 (now fixed until 2030) is exempt.

You can leave your estate to a husband, wife or civil partner without penalty, while bequests to some charities are exempt.

Rich farmers are, of course, a much more privileged group than their fellow rich — a point seized on by a certain motormouth TV personality who clocked the benefit of turning his extravagant earnings into farmland.

Agricultural property relief (APR) reduces the tax farmers and landowners pay when they pass their property to their children. Also significant — because many farmers have diversified into related business ventures — is Business Property Relief (BPR).

Rachel Reeves’s tax changes mean that the full 100 per cent relief from inheritance tax will be restricted to the first £1 million of combined agricultural and business property.

Above this, the rich will pay inheritance tax at a reduced rate of 20 per cent rather than the standard 44 per cent other rich people pay. Unlike the tax on other rich people, this is interest-free for farmers and can be paid over 10 years.

The government points out that this is on top of the other spousal exceptions and nil rate bands, which means that a farming couple can pass on up to £3m without incurring inheritance tax.

And farmers can claim BPR, which delivers 50 per cent or 100 per cent relief on assets used by a trading business. Farmers can claim for land, plant, machinery and buildings used by the business. And APR and BPR often can apply to the same asset.

The best estimate is that just 500 very rich landowners out of 209,000 will be affected.

The fact is that farmers play an important part in the economy and produce about 60 per cent of our food consumption, part of which is exported.

Smaller farmers — the majority — are super-exploited by the big buyers and supermarket chains.

But much of the anger being whipped up by the billionaire press is simply misplaced. Indeed, some measures — limiting the tax advantage for rich people that have driven up land prices so that tenant farmers looking for more land to rent or starting out on their own cannot afford to buy — are clearly positive.

Land is subject to the universal tendency to monopoly ownership under capitalism. When the National Farmers Union — which only represents about 46,000 agricultural businesses — argues that measures to equalise inheritance tax means some farmland returns to the market on the deaths of its owners, they gloss over the fact that this actually benefits small tenant farmers hoping to both acquire land of their own or rent greater acreage.

Farmers slide easily into special pleading and are habituated to a subsidy regime that in the EU was designed to secure a reactionary majority in the parliaments of the main member states.

Westminster Labour will find a way to make concessions to the rich landowner lobby when what is needed is a frank exchange with the smaller farmers.

But for the left and the labour movement, the task is to find a way of differentiating the genuine working farmer from the parasitic class of rich landowners.

The quid pro quo for farmers who want public subsidies and to benefit from tax concessions and state guarantees of economic security is for them to understand the class interests at work and where their long-term interests lie.

A bigger problem for the left is how to assemble the forces that might put an end to a situation where the private ownership of the land is the basic building block of British capitalism. And where social needs and the democratic management of society rather than market exchanges and private ownership shape our relations with each other.

Nationalise the land and pay farmers a salary and a pension. Our food security is too important to be left to private enterprise.

Nick Wright blogs at 21centurymanifesto.wordpress.com.

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