Labour’s “devastating” family farms tax means many won’t survive long enough to see ministers’ plans to help boost their profits, their union has warned.
The government have unveiled a ‘new deal’ for the sector following an outcry over Rachel Reeves’ controversial changes to inheritance tax which have led to a revolt in countryside communities.
But NFU president Tom Bradshaw said the government “fundamentally fails to recognise that the industry is in a cash flow crisis… devastating inheritance tax changes, national insurance hikes, crippling cuts to direct payments and delays to environmental schemes mean many businesses won’t survive to benefit from the ‘New Deal’”.
He praised ministers for the saying that the primary role of farmers is to produce food but added “how is it going to ensure food production is profitable when thousands of farmers and growers are questioning whether they’ll still be in the industry in the next year?”
He said ministers should instead urgently “pause and consult” on the tax changes, which have led to claims they will destroy family farms by forcing them to be sold off or broken up.
Under the changes, farms valued at £1m or more will be subject to 20 per cent inheritance tax. The Treasury claims that with tax allowances taken into consideration, only farms worth £3m will be affected, amounting to just 28 per cent of family farms. But figures from the Department for Environment, Food and Rural Affairs appear to suggest that as many as 66 per cent could be hit.
In a speech the environment secretary Steve Reed will say the primary purpose of farming is food production, in a bid to improve relations with the sector.
In the speech, to the Oxford Farming Conference on Thursday, he will also say farmers must be supported to diversify their incomes to achieve long-term food security as part of a ‘new deal’ with the industry.
Under the changes, food bought for the public sector will be monitored as a first step to deliver Labour’s manifesto pledge to ensure half if it is locally sourced or meets higher environmental standards.
Ministers say the move will make it easier for farmers to win a share of the £5 billion spent on catering in schools, prisons, hospitals etc every year.
Mr Reed will also pledge that planning reforms will make it quicker to build barns to boost food production and help them diversify with farm shops and holiday lets.
New measures could also enable them to put up wind turbines and get paid by connecting to the grid.
Mr Reed will tell delegates at the conference: “The primary purpose of farming has – and always will be – to produce the food that feeds the nation.
“Too many policymakers in Whitehall lose sight of that fact. This government is putting food production firmly back on the agenda.”
He is also expected to say: “We will work in partnership to achieve our vision for the farming sector.
“First, a sector whose primary purpose is food production. Secondly, a sector where farmers can access diverse income streams to make a fair profit and ensure their business remains viable in times of challenge.
“And, thirdly, a sector which supports farmers to restore nature – the foundations of sustainable food production.
“It is only through pursuing all three that we will achieve long-term food security.”