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Your tax raid on farmers is wrong
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Your tax raid on farmers is wrong

A second Labor MP said: “Food security is a real issue. I’ve had a few farmers who live in my constituency say this is a big issue for them.”

The source added: “There is clearly a problem with the transfer of wealth and the need to tax more, in my view. But clearly there can be unintended consequences.

“Agriculture is a critical component of the national economic infrastructure, which means it must be carefully maintained.

“If people are going to leave the industry because of this tax and it’s going to affect fewer smaller farmers, it needs to be addressed. The Treasury will have to consider amending it.”

The UK already relies on imports for much of its fruit and vegetables. Following the Covid pandemic, parliamentarians argued that the country should become more self-sufficient. According to 2023 figures from the Department for Environment, Food and Rural Affairs, the UK’s self-sufficiency in fresh vegetables is at its lowest level since records began in 1988, at 53%.

Mr. Balls, speaking on his Political Currency podcast, said: “This issue of inheritance tax on family farms, where the limit is a million pounds before you pay inheritance tax, I think that’s going to be one of those things that would could become a growing problem in the coming weeks and months.”

The NFU has warned that half of working farms will be hit by the tax raid, despite the Treasury’s claim that less than a quarter will be affected.

Tom Bradshaw, chairman of the NFU, said: “Treasury figures which claim this will only affect one in four British farms are misleading.

“It is clear that the Government does not understand that family farms are not just small farms and that just because a farm is an asset, it does not mean that those who work it are rich. I said, every penny the Chancellor saves from this will come directly from the next generation who will have to part with their family farm. It just doesn’t have to happen.”

According to the Government’s impact assessment, “almost three-quarters” of farms will not be affected by the changes, but Bradshaw said the analysis “massively overstates” that number.

The government made a “significant miscalculation” and many of the farms the Treasury said would be protected were actually just smallholdings where people were not making a living, the NFU said.

According to official figures, at least 70,000 farms in England are worth more than £1m, meaning they will all be hit by the chancellor’s inheritance tax raid.

Lucian Cook, of estate agents Savills, said that based on current land values, the threshold meant any farmer with at least 100 acres would be affected by the tax change. “No one is going to make a living on 100 acres.”

A typical farm in England is 220 acres worth over £2 million, even before accounting for buildings and equipment. “Many of these farms are already worth £3m. This is the average farm and they are still family farms,” Mr Bradshaw said.

According to farming experts, raising the threshold to a minimum of £5 million would protect at least some working farmers.

Liberal Democrat analysis for The Telegraph found Tory constituencies would be hit four times harder by the tax raid than Labor seats.