Rachel Reeves’s attack on the family farm is a recipe for a latter-day peasants’ revolt

A protesting tractor passes the Palace of Westminster
A protesting tractor passes the Palace of Westminster

I was brought up on a Sussex farm of under 200 acres. In our pantry stood one of those Victorian china two-handled mugs which celebrate agriculture. It carried pictures of the tools of the trade – plough, scythe, rake, churn etc – and a poem which began:

Let the wealthy and great
Roll in splendour and state
I envy them not I declare it
I eat my own lamb
My own chickens and ham
I shear my own fleece and I wear it.

Our small mixed farm slightly resembled this pretty picture. Early – before daybreak in winter – a pail of milk, still warm from the cow, would be carried from the dairy and placed near our back door.

Occasionally, I was up by then, keen to “help”, aged eight or so, with the milking. In summer, I offered similarly useless assistance, moving hay-bales or sitting behind the combine in harvest.

Beneath the cheerful little poem, the two-handled mug carried a motto in capital letters: “INDUSTRY PRODUCETH WEALTH”.

That sentence is an important one for the health of any society and for human self-respect: if a country works well, its people get richer. With a huge welfare state, and especially since Covid, a lot of people in Britain seem to have given up on this idea.

For farmers, it rubbed salt in the wounds made by Rachel Reeves’s Budget that staff at the Department for Environment, Food and Rural Affairs (Defra) now say they want a four-day week on the existing five-day pay, leaving them with “one day of chores, one day of fun and one day of rest”.

Most farmers, especially dairy ones, work a seven-day week. I once asked Will, bachelor brother of Bert, who rented our farm, how much holiday they took. He told me they had been to Wales for four days in 1949. Otherwise, they had never left the farm during his working life of more than 40 years.

Much else has changed in farming since then, but that level of commitment has not. Labour’s phrase “working people” does not do justice to it.

For all sorts of reasons, full-time agricultural industry nowadays produceth a great deal of food but, for most farmers, bugger-all wealth. Although the world has ever more mouths to feed, the money resides elsewhere in the process, such as supermarkets, or in farms of enormous scale. British farming produces less than 1 per cent return on capital.

Yet there is money in agricultural land because, as farmers love saying, “They’re not making any more of it”. Many want the land for leisure, quiet, prestige, “hope” value (the prospect of development), green experiments, other business opportunities and, yes, sheltering their money from tax. Farmland in southern England is worth about £10,000 an acre.

Leave aside the unworthy (but probably accurate) suggestion that Labour has an ideological animus against people who own land, and consider the world as seen by Rachel Reeves. Having created an even bigger “black hole” in the public finances than the one left her by the Conservatives, the Chancellor of the Exchequer is desperately casting around for more money.

Her eye falls on all those acres. Farmland is subject to Agricultural Business Relief (ABR) and therefore not taxed on inheritance. She will have been easily persuaded that this “loophole” should be closed. So she decided to remove the relief and impose an inheritance tax rate of 20 per cent (half the standard rate), on all farms worth more than £1 million.

Now consider the point of view of the working farmer. It is well illustrated in a YouTube channel called Harry’s Farm, its author, Harry Metcalfe, being the possessor of 400 acres in the Cotswolds. Ms Reeves’s plans overturn the business model, Harry says, of 70,000 farm businesses – ie, the majority.

Farmers live with the problem of being price-takers not price-makers. But they have been able to get overdrafts, plan succession, improve the quality of the farm and invest in modern machinery. This is not because of fat earnings, but because they had a reasonable expectation of passing on what they had. Stability and family – good for the landscape and good for people – have also been their economic rationale.

Such farmers were lulled into a false sense of security by pre-election semi-promises made by Sir Keir Starmer, Ms Reeves and the Defra secretary Steve Reed (whose famed wellington boots from Lord Alli cost roughly the annual profit from six acres of wheat).

Relying on ABR, many elderly farmers had planned to “die with their boots on” to keep qualifying for relief until the succession was ready. On Budget day, says Harry, “they received the most terrible shock”.

I rang up Stephen, a farming neighbour (chiefly arable plus some beef cattle). He had already counted half a dozen ways the Budget will damage him and his children.

First, of course, the inheritance tax. HMRC will now tax the tools of his trade as if they were personal, not commercial, assets. The three tractors, a combine and a sprayer that sit in his yard add up to about £1 million in value. That is before you start valuing the land itself.

On Stephen’s rough calculation, 500 acres of arable land can turn an annual profit of £60,000. But those 500 acres are worth £5 million, so 20 per cent of the soon-to-be taxable £4 million is £800,000 – more than the entire profit of 13 years. It could be paid only by selling up.

Like many farmers, Stephen has also used the exemption of personal pensions from inheritance tax to make some of his land his pension pot. Now the value of that choice will be nullified for his heirs because Ms Reeves has decided to tax those pots on death.

On top of that come the stiff increase in the minimum wage and the rise to 15 per cent in employers’ National Insurance payments.

Then there is the increase in Capital Gains Tax and (new, but not part of the Budget) the Carbon Border Adjustment Mechanism, a levy which will add £50 to every imported tonne of fertiliser (current price, £230).

There is even a double-cab van tax. Such four-door vehicles have been classified as commercial, therefore allowable against tax. Now they will not be.

This new approach to farming amounts to a cultural assault. When you combine it with the semi-nationalisation of land accomplished by ever-greater regulation and green dogma, you realise that the Government’s mental model is one without family farms.

All that will survive will be tiny ones whose owners make money elsewhere, and enormous agri-businesses that can afford the accountants to work round the taxes.

Similar results, less physically visible, but equally damaging to enterprise and to families, will be caused by the comparable taxes imposed on all but the very smallest family businesses of all kinds.

On Tuesday, farmers will rally in London. I would not presume to advise them on tactics, although I like the vision some are conjuring up of a mass refusal to take the dried sewage that they currently collect from sewage plants.

But when farmers consider what else is happening – the threat of Ed Miliband’s miles and miles of pylons and vast, hideous new solar farms; imposed housing projects; fresh attacks on wood-burning stoves, gas boilers, and shooting and hunting; country pubs unsustainable because of regulatory costs and wage and food inflation; potholes unmended – they can be cheered by the thought that the constituency for revolt is bigger than ever before.