Excellent analysis. But there are a number of factors that you didn't mention. The first of which is that the truly rich in Britain don't pay inheritance tax. When the present Duke of Westminster inherited his father's title, he also became the beneficiary of an estate worth many billions of pounds in the form of property and investments. But paid very little inheritance tax. Because those assets were held in trust. They didn't legally belong to the former Duke, and they don't legally belong to the present Duke either. They are the beneficiary of the income generated by those trusts. But they don't own them. The truly rich have access to the sort of expensive legal and financial advice to set up such trusts and, more importantly, they have such wealth that they can afford to create them in the first place. The second of which is that owning land, even rural agricultural land, is something akin to buying a lottery ticket. Thanks to Britain's onerous planning regime, every year some portions of Britain's farmland gets granted planning permission for new houses. At which point the hectares of farmland that were generating little, if any, economic return, suddenly sell for a value in excess of a million pounds per hectare. The third is that this Government, much like all Governments since (at least) the end of the Second World War, has pursued a cheap food policy. The Government wants bread, and milk, and vegetables to available to consumers in city, town, and village alike at a cost relatively low compared to average wages. It would be difficult to increase the prices paid to farmers for their products without seriously challenging this policy. The fourth is that, since at least the second half of the nineteenth century, British farming has faced an almost insurmountable cost challenge from cheap imported food. Its far cheaper to produce wheat, and beef, and lamb in vast open spaces of Canada, America, and Australia than it is on the small, cramped, and hilly fields of England and Wales. You can tell a British biscuit maker to pay their farmer-suppliers twice as much for the wheat they produce. But our current free-trade regime means that British farmers still have to compete with foreign wheat growers. And lastly, we in Britain have created an almost impenetrable labyrinth of competing interests for the use of the land. We want a countryside that is unspoiled by ever-spreading development. We want (thanks to the experiences of two World Wars) a strong and reliable supply of domestically-produced food. We want walkers and ramblers to have access to footpaths and byways along and across many privately owned fields and pastures. We want food to be uneconomically cheap at the supermarket. We want the benefits of free trade. We want to restrict and control the use of fertilisers and pesticides. We want to protect various species of wild birds and animals. And so on. All of them, individually, good and noble goals. But at some point one has to recognise that some of these are goals are simply incompatible with many of the others. Farming in Britain needs to be fixed. And doubtless inheritance tax is part of the solution. But in reality, it should be the LAST step taken in that process. Not the first.
A very good analysis. Inheritance Tax is pretty much an irrelevant detail in all of this, but a politically incompetent Government has now given it a prominence that is out of all proportion and allowed it act as a lightening rod for 1000 other grievances. This is gift for the grifters, class warriors and conspiracy theorist who are extracting maximum value out of this situation. Once again farmers will get the least return or value for their efforts. The worst aspect of this is that it has cemented the loss of trust between farmers and government. The last administration talked big about a 'just transition' for post Brexit agriculture, but delivered bugger all. There was a moment when Labour could have turned things around, but with their tin eared ineptitude they have completely blown that out of the water. I see no evidence that there is anybody in the current administration with the vision or ability to turn things around now.
I would add wanting solar power to meet net zero targets and converting farmland to solar farms. Does it still qualify as farmland then? And of course planting trees for carbon offset and then never looking after the trees. And if the land is owned by a corporation, does it avoid inheritance tax altogether? I like Richard's explanation, but think there are other factors which will not simply result in lower land prices allowing new entrants to farming.
@@auntymeg9 the Church and crown estate own the largest % of the agricultural land in the country and neither have to worry about IHT..which alone speaks volumes about this policy change
But inheritance tax is not charged on corporate owned assets - companies don't get charged or pay inheritance tax. So inheritance tax charges will accelerate the financialisation of farmland as it will push out private owners in favour of large corporates.
But why, other than emotional reasons, is this bad? Large companies are inherently more efficient than small ones. We don't, seriously, complain about supermarkets pushing out smaller, family owned shops because we value the price saving more than the nostalgia. Why should farms be any different?
@@SmileyEmoji42 Corporates are of course primarily investors and therefore require a return; they are not custodians of the land in the way that generations of a farming family may be, and will have little interest in anything that does not have a prospect of a short term return. Farmers usually consider themselves the custodians of their land for the time being, and do what they can to improve it - in many ways that do not necessarily equate to a short (or any) financial return, eg planting tree belts etc and creating habitats for fauna. Corporate investors would prefer to pull out the hedges and field margins, and put all the land they can into productive use.
If what you say is true then registering a family run farm as a company would bypass this completely, and all farmers would have done this already ... that they haven't means either you are wrong, or it will cost more to do so ...
@@davidioanhedges I've been saying this since Reeves' announcement. Anyone can turn their asset into a Ltd company and have their family as directors and shareholders. This is also very fair as farmers then will be treated exactly the same as business owners in terms of IHT. Of course there is also the approach of just handing over the farm at a sensible age to offspring and making use of the 7 year rule. With thses options I suspect any government will make very little out of IHT on farms.
Absolutely! Most people want to support farmers. But there is too much money being made by manufacturers and supermarkets etc and no one wants to do anything about that.
@@Redf322 Sainsbury's at one time donated to the Lib Dems, I seem to remember. I don't know if they donate to the Tories at the moment. Most people would agree farmers are being screwed by the bigger supermarkets, also it's noticeable than many foodstuffs previously grown in the UK are now imported. Recent purchases by myself at our local suopermarket have been lamb from Oz, mushrooms from Poland and tomatoes from Israel.
OK mate, fix global farming economics, then when it's all fixed and farmers are making 10% return on assets, come back and change the IHT regime. Until then, the cart is leading the horse, and most farmers know which way round they go.
@@TheStalec Land is too expensive, agreed. Because of the UK IHT regime? Come on, farm land (and land in general) in Germany is even pricier and it's a bit of a stretch even for the muddled thinking in this video to say it's because of a tax break. Another plausible reason is that we are making more people faster than we are making more land.
@@andybarnard4575 Nobody cares about Germany. We're on about how things work here in the UK. And we're not running out of land as you imply. One of the real issues we have is that too few people own too much of it. 1% of the population own 50% of ALL land in England. A large number of that 1% will be able to trace that ownership back to the events of 1066.
@@TalesOfWarAnd 1.4% off the workforce make ALL the food. Taking their land away starved Zimbabwe, Ukraine and China. Doing the same and expecting a different result because we're British and not like those johnny foreigners is not a policy I can support. But you do you.
Thanks, Marcus, for the honesty of your post. I was in business with many changes I didn't like. It forced me out years before I wanted to. But before crying, Wolf. I knew most of these changes were justified. I didn't like it but just couldn't square the round.
My farm is a small farm. I don't get subsidies. Never have. I would like to expand. My model is profitable. I would prefer not to be in competition with people using land as a tax dodge or else to farm subsidies. That's the truth of it. I also feel like a lot of farmers are stuck selling at low low prices. My model is direct sales, so I sidestep that problem. It's good for everyone
Thankyou for the explanation. Ex farmer here & I can tell you that if farmers were left alone to farm, things would be a lot better. Farmers are hamstrung at every turn by miles of red tape caused by people that have no knowledge or attachment to the land. You cannot do ANYTHING without THOUSANDS of rules & regulations which all cause massive amounts of STRESS & worry which has nothing to do with economics. I can tell you as an ex livestock farmer that the worry about all the ever changing regulations made me nearly have a nervous breakdown. You are unable to plan anything. Farmers have to plan & cost things years in advance all with the everchanging seasons & unpredictable weather, which, left alone, they have been able to do for thousands of years. Farming is a way of life. Many, not all farmers, are rooted in their land. They come from a gentler time before economics & money became the over-riding, crushing, stifling, ONLY thing in this country, &, like every thing else farming is about to be ripped up & swept away in the name of so called 'progress'. Personally I'm sick of the progress in this country & long to go back to when people were valued over PROFIT.
So they should pay the same inheritance tax as everyone else, which would be more than what is proposed? The big problem with farming is subsidies. These allow the bigger companies, ska supermarkets to drive down the cost. When they are removed or even just tweaked, it is farmers who are left holding the can. Then when we say that they should do better for the environment, which they should as farms are destructive industrial landscapes of monoculture, we don't give them any compensation. So we neither help farmers in the existing system or help them to move away from that system.
Sadly Richard it's a bit flawed.Very wealthy individuals e g Clarkson can afford to pay the inheritance bill.Smaller farmers will have to sell some or most land,who will buy this? The wealthy,e.g.Clarkson et al.Or housebuilders.Im pretty sure Labour are doing this to release land for house building and relying on more and more food imports.
@@waynegodfrey8565but if Clarkson bought a steel bashing business for fun he would be able to pay the inheritance tax too. Hobby farmers will always have an advantage in this case as proof running hobby woodworking businesses after working in the city do too. However there is.a limit to the number of them, what can really distort the market is financial people spending billions to avoid tax. The inheritance tax will help with this. The unintended consequence that I would worry about if land got a lot cheaper I'd people just buying farms as big gardens and not farming them. I think that farms should have inheritance tax levied on them but if the owner or inheritor is farming them the land should be valued as a multiple of the rent you could charge for that land. That gives real farmers' an advantage but not big landlords.
Farming does of course pre-date the Neoliberalism that is crushing it right now and even the Laissez-Faire economics it grew out of. The majority of farmers however did not just vote for this system they actively cheer leaded for it with political hoardings every election cycle, don't even talk about Brexit. Does this mean they deserve it? IMO yes, Osbourne demociding disabled and poor people was fine by them. They are redeemable however. Farmers, probable because of the advertising space they own, have been politically active and influential my whole life. Agitate and advocate for something better. Or get in the bin.
I'm a Kiwi who has been in the UK for 30 years. My observation is that in New Zealand, farmland is valued as a multiplier of its productive output, so that ROI is baked into the sale price. In a non-subsidised agribusiness market, farmers balance the potential monopsony of food manufacturers and supermarkets through vertical integration. That is the farmers own cooperatives which own the processing plants and turn out finished product at a wholesale level - this applies more in meat & dairy production than arable, where spot markets & futures trading are used as hedges. It's widely acknowledged that changes in tax policy can have transformative effects, both good and bad and intended & unintended across any industry. The trick is having very well informed industry sources participating in that policy formulation.
The problem with the UK is that the City of London exercises extreme power over all concerned. Another example is the sacrifice of the British fishing industry on the alter of Brexit by Boris and his mates.
_That is the farmers own cooperatives which own the processing plants and turn out finished product at a wholesale level_ What! That is Commie to the brainwashed green wellie country dwellers. When was the last time a country seat voted in a Labour MP? Then they want financial privileges because of their stupidity.
I have a small holding in France so have an interesting perspective on this issue. The average size of a farm here in france is 70 hectares (173 acres) and the market price per hectare is €6200 which is equivalent to €2500 per acre, which at current exchange rates is near enough £2100 per acre. The average income of a french farmer is €56000, of which about half is various subsidies from government and the EU. The comparable figures for the UK are .. average farm size is 88 hectares (217 acres) and the average market price is around £10,000 per acre (5 times that in France !!) Trying to get average incomes for a farmer is difficult in the UK , on the one hand farm business income is £72,000 on average, but this clearly excludes lots of costs and salaries etc, probably more realistic is a figure of around £26,000 to £28,000 per year as salary. There is clearly a major factual problem here with the levels of inheritance tax being imposed by the labour government. If the average farm value in terms of land is already at 217 acres times £10,000 then that means the AVERAGE land value of a farm is £2.17 million, and by the time you add in farm buildings and equipment (milking parlours, grain silos etc) it should be obvious that the average farm is going to fall into the IHT regime...
I think the average IHT payer is probably looking at the cost of a piece of high end machinery that can probably be hired instead of being bought. The big thing is that 64% of the land is held by tenant farmers who will not pay IHT but will have an opportuinty to buy land that becames liable to UHT.. The land will always have owners and farmers and the land will pretty much always give the same production.
@@theotherside8258you are forgetting that the big country estates and landowners hold most of their assets in trusts that are not exposed to IHT. The farmers who will be exposed to IHT and forced to sell land won’t be the big landowners.
@@sookibeulah9331 I think thats why the govt says only about 500 farms will be affected. The massive landholdiings held in trusts should perhaps be dealt with by taxing trusts each year with CGT for assessed changes in the value of land to stop them being used as vehicles for tax evasion and with a yearly half% added on representing Inh tax that would have been paid each generation if not in a trust. It might be also an idea that tenant farmers should have the right to buy land held in trusts perhaps at 85% of market value - like council houses. Should perhaps be some exemptions for where rentals are required for upkeep of historic houses and gardens
If all people were treated like royalty and not subject to inheritance tax then everyone would act in a natural fashion, with farmers retaining farm land which would be of no interest as an inheritance tax loop hole, because inheritance tax would no longer exist. It is adequate to tax farm land, that is sold, if its use is changed from farming.
Brilliant explanation as ever. This situation is a consequence of the ending of the produce marketing boards under Thatcher's neo liberal economics firstly. Secondly it is indicative of the obscene concentration of wealth we have seen over recent decades.
Agreed. Perhaps it might be an idea if someone from the Farmers Union came and explained how Mr Murphy has got his explanation all wrong and this change in Inheritance Tax will affect farmers to the their detriment?
Let me tell you about our farm. We have about 300 acres in the midlands. I'm guessing but let's say it's worth £4 million if you include the buildings, equipment, livestock etc. So when my parent pass on and the land comes down to my brother and I to farm, my family will receive a tax bill to the tune of a million quid. In what possible way does this not utterly destroy our business without us having to sell off large parts of our land that has been passed down for generations... most likely to someone far more wealthy than we are.
@@goodlookinouthomie1757 Why don't they pass it on to you now? They would only actually need to sign over the amount above their relief. Why would you end up paying 25% of total value when there is an allowance between £1.3m and £2.6m and the taxable amount is only taxed at 20%?
Very good description. The farmers used to sell a lot of produce in wholesale markets and auctions then they decided in the eighties to give supermarkets the control of food supply and therefore prices!
Thank you, your videos are extremely helpful to help us all understand more about how these economic processes work and what the underlying problems are in reality.
Although the inheritance tax relief for farms began in 1984, a lot of the land price rise began around 2005. A bit of googling suggested this is connected to changes in the tax rules for trusts, so buying farmland instead suddenly became worth the trouble. Does anyone know more?
It is critical to listen to whole of this video to get the full message. I follow a few farmers on RUclips, and having studied economics at University I can relate to all these points. Interestingly Rachel Reeves has not been able to articulate these points, (maybe she is not an economist?). The logical conclusion from this argument is that in the UK we need to pay considerably more for our food. However, I think as a nation we need to stop eating Ultra Processed Food (UPF) as a matter of urgency. Ironically more than half the food in our supermarkets is UPF. This is a huge subject. Thanks for making a coherent argument in favour of real farmers.
The follow on from this is that either everything in the UK market is overpriced (housing, bills, fuel, etc - not food, which is obviously too cheap in most cases) or the wage bill of the populace is being suppressed. Either could be true (one needs to balance the other or no economy because no-one will have enough money to spend into the economy) which leads to presumption that the current model is untenable (the obvious cause is greed. Mainly by the financial sector. An example of this is the cause of quantitative easing: the financial markets are bailed out by governments and the public ultimately foot the bill..but there is no real change by the people that benefit the most in the financial sector).
@@inguzwulf Housing is definitely too expensive. Some items like new cars are way too complicated for getting people from A to B. Focusing on farming today, I wonder where farmers being paid to not farm, is going to take us as a country regarding food security. Once farmland stops being farmed it will take time and money to bring it back into production.
@charleswillcock3235 Unless it's all bought up by 'big business' (whoever or whatever that may be) and repurposed (via supporting whoever's political career/interests/whatever) for some money creation scheme then it will be too late to do so. But on a positive at least it will mean growth in financial terms, so that'll fit right in with current policy.. hmm,🤔.. People's lack of long term thinking amazes me sometimes, and at others makes me want to just scream.
Precisely like Kamala harris, reeve can talk dumb dumb messages to idiot farmers. End result Tories shall be voted in and stay on forever and ever. Get it!!!!!!😂😂😂😂😂......give up......
In the long run this is the ideal. The issue though in the mid term is that land banks don't make money off their land but make it through other financialisation instruments and so could pay the inheritance tax if it came to it. Farmers can't. So the land will still be valued more, and more land will be swallowed up. Unless of course there is a general decline in the economy such that those land banks need to asset dump. So what we will see is land values staying high unless the government steps in and rezones the land itself or forbids using farmland in this way as an asset. But that then leads to a control economy. The trouble with that as well is many pension funds will be linked to land banks and so the underlying asset price is already locked in and we don't have a healthy environment for funds to make money investing in companies. So a drop in land values hits the pensions. Inheritance tax in general is a stupid spiteful tax and should be abolished but if it can be used as a tool to change the system it should be applied to land banks. It doesn't take a lot of work to find out who are the farmers and who aren't. That would help reduce the price of land as well meaning farmers get a better return. So I disagree that they are protesting about the wrong thing. They need to have the tax applied to those land banks and large estates, essentially closing the loophole. However when has the government ever got closing a loophole right, so maybe your point stands!
Most of the privately owned land in the country is held by the church and crown estate... which unsurprisingly don't have to worry about IHT...which speaks volumes about a governments claims of making land owners "pay their fair share" through this measure but I agree IHT is a tax of spite and envy for the most part
I agree, there must be a better way of targetting the tax. Perhaps by valuing the land at probate not on market value but on production value and taking into account rents and then charging higher tax on land that is not worked properly by the owners as a farm.
This is excellent. You list 3 problems farmers have but you missed out the fourth: The low real wages which the end customer, the consumer of the farm products, receives. This does not in any way detract from your other arguments but I think it should be mentioned as the overall prosperity of the population is bound to have an impact on farm gate prices. The point about the financialisation of farmland is the killer, though. The farmer is being robbed by parasitic financial capitalism just like everyone else.
True, I would love nothing else than eat good quality, British farmed and preferably organic produce but I am FORCED to choose (still) cheaper imports. Locally produced food is Iuxury I only sometimes can afford to indulge in, mainly during the hight of the season.
@@nicholaspostlethwaite9554 No. It's those living from extractive capitalism who are over-remunerated. Workers, the people who actually create the wealth, are farcically underpaid.
@@charliemoore2551 Oh that old nonsense, dull 'workers'. If work were the valuable part of life, Donkeys and other working animals would be the highest paid! Get ready for humanoid robots and AI taking away all your supposed valuable purposes. Labouring to clever jobs all soon to be eviscerated. Home truths coming. Pay is vastly too high particularly in the west most developed nations, making life very expensive. I was only a dull worker too, but reality can not be denied by fantasy thinking.
That makes absolutely no sense at all, in fact it is full blown moronic. Cripple working farms with a tax so that you can pretend to tax the elites that actually own the majority of the land. The elites will find away to keep avoiding paying this tax. You will end up paying more for your imported food and it will be inferior in quality. That is if we don't have food shortages just look at the weather not only in our country but in others. We buy 32% of our food from the region just outside of Valencia in Spain that flooded. Same thing with California from what I have heard.
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Lack of economic education can lead to people of many walks of life to fight against their self interests due to simply not knowing where the cause for the problem lays.
@@waltermcphee3787 A small number of very wealthy people were aware that farmers would vote for any kind of change and therefore gave them the option of a poisoned chalice which would allow them to eventually increase their own land portfolios. Result: yet more private land owned by fewer people, fewer working farmers.
@ryanseddon4800 but also not speaking to the people that will be affected. Not understanding what one is doing. They didn't speak to the NFU etc. They didn't get the facts before acting.
Lets be honest here media disinformation is getting beyond a joke, until there is a way to hold people accountable for spreading horse manure that they know to be lies everything is just going to get worse, look at the last 10 years, in the UK we had Brexit, right wing morons that told complete an utter lies purely for their own financial gain, you had Trump get elected, and what a surprise the only thing he actually did of all his promises the first time was lower taxes for him and his buddies, the same idiot that after probably one of the worse terms in recent history gets another shot after literally having to be forced from the building the first time, all of this has been enabled by a concerted effort to muddy the waters, from newspapers to podcasts to TV, the misinformation is everywhere and most people switch off, give people simplistic answers to complex questions and people don't seem to question them
I spoke to a young man who worked picking vegetables on an English farm. He told me the buyers reject any produce which is perfectly edible but which doesn't look standard shape, size ie pleasing to the supermarket customer and is thrown away. 40% was thrown away.
I've seen in some supermarkets they have started trying to offer cheaper vegetables that are "all sorts of shapes" meaning they are less picky about the cosmetics of the product. This may be the start of a positive change as you say. Nevertheless, the customer is still going to sort through everything, squeezing and assessing before they buy.
Buyers reject them because, and only because, customers in the shops reject them. That's me, probably you, and certainly the vast majority of the public. (Also, when used as input to food processing, the machines cannot handle items that are too far from the average)
A few things on this - the inheritance tax is being introduced *in addition to* the problems farmers have with revenue. These events do nothing to solve the underlying problems, it just adds another one on a very financially pressure sector - farming is an incredibly risky business - crops fail, costs go all over the place, the price of their produce fluctuates wildly. Most farmers will be running lending with the bank. So the risk of the business puts additional strain on the finances It’s a good point you raise that farm land is now being used as a financial instrument to avoid inheritance tax. I agree it needs a farm cleverer system to close that loophole but remove the issues of inheritance for farmers. Incidentally, worth following up on the national “greening” (or rewilding) initiative - to take farmland out of use as farmland and grow (very easy to maintain) grass and natural plants for biodiversity. Huge financial rewards from the government for doing that - and I’m sure the investors will be benefiting from that soon too, if they’re not already… However, just closing the loophole will not resolve the precarious income vs. Costs balance of running a farm…
Fascinating video. Brought up in a converted farm building I witnessed first hand how a fifty acre mixed dairy farm worked. An important part of the mix was reciprocity. Competing neighbouring farmers cooperated. The farmer with a muck spreader spread all his neighbours’ muck. The farmer with a baler did all the baleing, similarly the grass cutter. Farmers’ labourers were lent out to each other. Massive meals were provided free around large refrectory tables. In other words, vital farming inputs were available without any cash changing hands at all. This system in which each farmer’s prestige was measured in the excess help he had given to his neighbours over and above the help they had given him provided a distinct and powerful morality. I think this is partly what farmers miss when they regret the profit motive having entered into farming. Today my understanding is that farming inputs are provided in much larger degree by contractors eg sheering, drainage, silage making, muck-spreading etc and reciprocity is almost dead. Why has this happened? And is contracting out part of the problem too?
Farming isn't the only user of land. Forestry, solar panels rewilding and building competes for land use with money from outside farming. It's highly unlikely that land prices would fall with an inheritance tax.
I mean not to mention housing. And we all know why we need more houses. Our population grows by 350k per year and it's not because the natives are having babies.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes. In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes. In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
Excellent and interesting analysis. A couple of questions, if the debate hasn't moved on. Why is the impact of Brexit mentioned but not analysed? To controversial, politicised, obvious? Why are farmers misled on their protest? Misinformation? Bad actors? Political influence? Thanks again for a clearer picture.
This is exactly right. Family farmers and landless agricultural workers have been ideologically captured by the class interests of large landowners and the financial sector. The support Brexit had from farmers showed this too.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes. In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
I heard it was said by the politicians that these taxes are needed to pay for our NHS. Apart from probably a lot of mismanagement of funds, the reason the NHS is in trouble is because of our nations very poor diet. I am convinced an awful lot of our health problems come from our poor diet choices, egged on by food and beverage companies. Maybe those who make ultra processed foods should be the ones made to pay for our NHS!
Well said, poor diet, mental health treatments, geriatric care, MRI scans, cancer care, vaping, alcohol and drug use, were nearly all never imagined in the 1950s 60s, even 80s....the NHS is being punished for poor policy planning, needless austerity, longer life spans and dumb human consumption choices...
Banning Coca Cola, McDonald's, and snacks is much cheaper than subsidising healthcare, I agree. Perhaps banning video games and recreational social media (as opposed to political social media) could also save billions.
More than half the food in all the supermarkets I am aware of in the UK, sell food which should be labelled in the same way cigarettes are namely, this will cause you to increase your weight, is bad for your health and will shorten your life.
Leaving aside the Orwellian notion of a government mandated diet and exercise regime, I doubt that is true. Even if it were possible to educate everyone to eat well and exercise abstain from excessive alcohol consumption, such a thing would result in significantly extended lifespans, and the majority costs are in a) pensions and b) end of life care. Increasing the number of pensioners by even 20% over the projected figures would result in state pension failing entirely (it will fail anyway in the next 40 years, but hopefully not catastrophically) and the NHS becoming overwhelmed.
There is an inheritance tax in Japan and Japan is the easiest country in the world to become a farmer because land is so affordable and in many cases free to rent.
Murphy has got half the picture. IHT is the wrong solution to a real issue. It does not address the problem of food wholesaling and supermarket retailing that Murphy refers to; that will continue. The tax will be avoided and will just put their farms in a trust. Nice work for solicitors. As Murphy points out, prices of farmland bear little relation to their value as farmland, due to speculative factors (including IHT exemption), but here are other factors such as the assembly of land banks by developers - which Murphy does not refer to. Land that gets forcibly sold off to pay the tax will mostly go to corporate owners who will put the farmland under management and work it for maximum profit. Alternatively, it will be mortgaged - and effectively the land will be owned by lenders. Either way more farmland will be treated as a resource is
He hasn't got half the picture, I think you've only understood half of his point. He doesn't claim this IHT change will affect the problems you've mentioned, he completely agrees with you on that point. He's saying that giving the current exemptions from IHT to farmers exacerbates some of those other problems, in addition to giving an unfair tax break to many who don't need it.
@leemcivor6785 IHT is a bad tax. It has never achieved the intended result. Nice work for lawyers and accountants, though. Murphy knows what the solution is but always ridicules those who mention it.
That's about right. Where is British Agriculture going. It's going in a direction that is favourable toward those who have deeper pockets and want more control of food production. Namely, corporate interests who are in line with the business of government.
I agree. Inheritance tax is theft, even though I disagree with the sentiment that taxes in general are theft. Taxes should only be on income and on 2.5% of liquid (not frozen) assets.
Ah. What a great explanation. Somebody told me this the other day and I didn't quite understand. It's clear now. Surely the solution is to charge inheritance tax on land which is not provably anf actively farmed.
Thank you so much for your posts, I find them so useful for my old grey matter, food for thought! I in my limited capacity, also think you are correct with your analysis of the subjects you choose, which are relevant! Having the ability to make people think seriously about subjects we know little of, but are pertinent to present day events that affect our lives is a skill in itself.
But this ignores the issue that other industries use farmland such as mono-culture forestry, solar/ wind energy generation, leisure, and housing development. All of those will continue to drive up the cost of farmland even if tax avoiding investors are driven out through IHT.
The reason farmers are complaining about IHT is because it was a sudden decision chosen by the government, it did not have to happen this way, the threshold could have been higher, implemented gradually etc I think it’s perfectly fair that they are angry about it because will lead to a lot of pain for certain families. I’m sure they are also perfectly aware the business model is Broken, and that lack of IHT has inflated the land value etc. Pretty much everything you say bigger picture is correct, but lack of empathy for people having a completely understandable and rational reaction to the succession of their livelihoods being impacted is quite patronizing and unfair And n a lighter note, it’s good that you agree with reeves for a change on something, even if you aren’t exactly out and proud about it 😜. Good discussion 🙏
A really good explanation Richard, as you stated its the food manufacturers and supermarkets that drive the cost to uneconomic levels for farmers, and regulators do nothing, saying “let free market conditions prevail” thats not working for many reasons. I.T. Can also be negated by putting the farm into a trust.
Not sure this does much to dissuade use as IHT planning. It is still favourable as part of the mix. The upwards pressure on farmland prices is because of new buyers, namely "green" funds and investors. Even farming is becoming partly carbon sequestering credit business. These add pressure to supply, demand. Without new buyer types, it is just merry-go-round, farmland being swapped in and out, the price is not changed much, IHT rules have been in place for many many years. There is limited number of people attracted to use farmland for IHT. But "green" funds aspect is peeking interest from all parties. So unlikely for land prices to drop. Main frustration with this government is it's pigheadedness, lack of consultation, no idea the real consequences of any of their plans.
I see two issues with this argument. Firstly, there will be a group of farmers who have invested their capital in the purchase of the land. They would stand to make a loss on their capital if the value of the land fell. Secondly, in parts of the UK the alternative use of land has high value, housing development.
If one has invested capital in the acquisition of land for farming, the value of that land post acquisition is irrelevant, until such time as that land is passed onto someone else, if the idea of the acquisition is to earn an income/profit from farming rather than by other means. I very much doubt that serious farmers borrow money to acquire land - the rate of return is too low and risky for banks to countenance.
@@richardhale9664 🙋♂many farms will be very highly geared with borrowing, trying to keep up with the other interests trying to buy farmland. Dipping into negative equity will be a disaster for my family, most of the farmers I know are highly borrowed. We have tried our hardest to invest in the business to create efficient production and economies of scale, but it's a brutal market to be in.
Well explained but the land of real farmers should be valued based on its agricultural return but the land must be farmed. The problem is the government is not bright enough to realise all this is argue it coherently like you!
Unfortunately the Treasury and the City of London are bright enough. It really. does need an end to end drains up with a holistic approach to find the highest level of "the common good". Farmers should be treated more like well paid custodians of a National treasure.
This was 'kind of' the situation as it existed previously. 100% inheritance tax relief on land farmed 'in hand' is a covert admission that the land has low financial value as an input. By extension, land should thus be subject to price control at a low and fixed value to end it's use as a speculative asset. Let scum speculate in gold, bitcoin, works of art whatever- not the source of food.
Thank you for such a clear explanation. I've been struggling to understand where I stand on this issue and you've helped me to see that what we are being present on the surface isn't the real issue.
He hasn’t really offered any solutions to the farmers though has he? All he has said is that it would be better if farmers got a fair price for their produce And that the land is over valued 1) Farmers can protest all they want about getting next to nothing for their products it’s not going to change anything quickly. We live in an international world and even outside the EU our farmers would just be undercut by foreign competition. Say they did get an increased price for their crops who is going to pay for that are the big companies going to just absorb the costs? No they are going to pass it on to the consumer pushing up food prices. Is the price of land going to drop because of this I would not hold my breath. Instead farmers who are just scraping by get hit with huge inheritance bills Let’s take Richard’s £3million example Say a husband and wife die Leave it to their son He is entitled to a £500,000 tax exemption per parent = £1million. But will pay 40% on the remaining £2 million That’s £800,000 The government will give you a 10 year interest free period to pay that which is £80,000 a year on top of the other overheads to run the farm. Richard’s points about about how the system is not working for farmers are valid but inheritance tax does not fix them it only give them additional overheads to pay. The result of this smaller farmers end up selling up taking a big lumped sum. who buys the land the large companies with tens of thousands of acres give it time farming will become like the rest of the food industry the majority of which is owned by 8 large corporations.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes. In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
@@johnredmond6723and that’s if the farmer is still married. 42% of marriages end in divorce. Why should that statistic be any better for farmers. Also 38% of farmers are over 65 so have a greater likelihood of being windowed than most of the working population who are largely under 65.
Absolutely bang on the money!! Fantastic video and the best most honest, factual and concisely laid out video or content I have seen. I agree we should be protesting against prices and take back some of the control the marketing boards used to have pre 90s and have since been replaced by the supermarkets. Hopefully the follow on from potential further action in the form of a strike will put more emphasis on our need for food and its value. Land prices are pushed due to external purchasers pushing prices from predominantly non farming people
Thank you so much. How did we, as a country, get to this point? It seems to me that the famous "City of London" has a lot to answer for, and the sooner it is dismantled the better for us and the rest of the world.
Excellent, had not considered that reasoning. Only one point, food producer and supermarkets, yes, but actually it is the consumer who is only willing to pay next to nothing for rubbish food.
Good comment, Richard. Many crop and animal farmers are squeezed by big buyers and supermarket chains. Many farmers are tied by contract to supply only ONE buyer and are not allowed to sell to others. A massive amount of land is owned by listed companies who pay no estate duty. Most family farms are owned by private companies whose shareholders are family members.
So just curious, what’s the safety net to stop farms from selling land to corporate entities who consolidate the farming? If they’re forced to sell due to poor profitability I can’t see how a new farmer will be waiting at the gate to purchase the land and make an attempt themselves. So it seems like the land is valuable and would more likely be eventually used for housing, since that’s an issue. And even if you restrict it in a way that requires farming to continue, we have the first issue.
Cribbing from the current issue of Private Eye, be curious on other opinions on it. "But no inheritance tax will be due on the first £1m for farmland, with 20 percent due on anything above that (half the usual IHT rate) however large the farm. Moreover, inheritance tax remains zero if the asset is passed on to heirs at least seven years before death, so unless a death is unexpected and sudden, the tax is effectively a voluntary one and unlikely to raise much revenue." "A far more lucrative tax change would have been to abolish capital gains tax (CGT) "rollover relief", which allows farmers who sell land for housing to put their profits into more farmland without paying any tax at all. This "rollover" money buys between a third and a half of all farmland in the UK. By increasing the rate of CGT in the budget, Reeves has further incentivised farmers to avoid CGT by rolling over housing development gains into more farmland - thus helping inflate land prices even further beyond what ordinary farmers can avoid."
I’m part of a farming family, I totally agree that the farming protest is not being explained properly. I work on my parents hill farm part time as it can’t afford to support me but my dad 71 needs the help but it’s too much for one person. The economic of farming have been terrible for my whole life (35). My only fear to your argument is ideology. Big business may keep the land prices high. And other forces that are entering the agricultural space. Not to mention tourism keeps lake districts housing prices high pushing out the locals.
This is where regulation is needed, but this is the step in the right direction for the long term. I'm hoping they'll introduce protections for farmers and other forms of production as the other side of this coin to make a real positive difference for society as a whole. We've pandered to wealth for too long in this country, all thanks to Maggie Thatcher (or mostly). The same is true in the US with Reagan. Those two were peas in a pod in terms of their policies that destroyed everything and got us in the mess we're in now.
Brilliant. Thank you for explaining it so straightforwardly. I wish that the Government was making the case, rather than relying on academics to do so. The Government appears to be doing the right thing, but failure to communicate is undermining society’s confidence and allowing emotion to muddy the waters, enabling opportunists to whip up division (Jeremy Clarkson perhaps?).
This is the second video i have watched of this channel and it really helps to fill in those wide gaps of knowledge in a way that is clear and simple to absorb. I just want to keep watching more videos and learning more!
Very well put. If the farmers are really intending to pass on their estates to their children, and their children then pass on to their children and so forth, then the cost of the land decreasing shouldn't really matter. The only people who it should matter to are the James Dyson's of this world who have bought up farmland for the sole purpose of dodging tax.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes. In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
If you work very hard using land that is worth millions, yet you only earn a meager economic return. Something is seriously wrong and it’s NOT inheritance tax. Why is the land worth so much yet barely economical for farming? That tells you that land isn’t being valued as a farming asset. It’s valued for something else. One main reason: land is used as a tax avoidance mechanism for the wealthy. They want to buy the land for this purpose, ergo high demand, ergo high price on land. Farmers are barking up the wrong tree. They should be angry at the Jermey Clarkson’s who buy land from farmers as a means to dodge taxes. Yet they are marching alongside Clarkson against taxing him. Farmers are seriously being mislead.
Your points at the end are valid, but farmers will still suffer until land prices fall. They will not fall because Labour also wants to allow houses, wind farms and solar panels on the land, son farmers, in my opinion are going to be deliberately forced off the land. Just watch how food becomes expensive then, fueling inflation, increasing unreliable imports. This government doesn't think that is problematic, but remember how fragile the supply system was during the pandemic.
And at the same time they seem intent on provoking Putin into a major conflict with Europe, ensuring that our global food supply chain becomes ever more precarious.
I think you have hit the nail on the head. Its a real land grab. Farmers are forced to sell land to pay a bill they cant afford and the government gets the money from the sale.
I actually discussed this with my dad last night who as a 92year old ex farmer (gave up his NFU membership last year) had been watching country file. Two of my cousins who run a few hundred acres could be the farmers in this scenario though they rent a couple of hundred acres. The rent on land is only about 1% of value. Indeed a local farmer offered this sort of rent for some land I own. Inheritance tax in the past actually broke up the estate that is part of the land that my cousins own, otherwise they would have probably have been tenants like their father and grandfather. Some of the estate is owned by Duke of Westminster who paid little or no inheritance tax on the death of his father in 2016, thanks to tax avoidance measures. (He’s worth about £9billion). Part of this was the Abbeystead estate used primarily for shooting. In 1915,when Earl Sefton owned it, 8guns made a record of shooting 2,929 grouse in a single day. Yep this was 1915 when my grandfather who should have been working Lord Seftons land was otherwise engaged…
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes. In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
Clear, concise and well articulated....you have converted this peasant through reasoned logic. If only we had this quality of thinking in the hall's of power. Excellent Richard.
A very good video which makes me wonder why the government is so ignorant of the realities of farming that they are not enlightening the farmers of the benefits of the new law, could it have a hidden agenda?
No, it’s bad for food security if farms are sold off for solar farms and housing etc. IHT should only be paid on sale of assets, most farms are worked over the generations by those that know how to manage our countryside.
@@teryd5672n actually solar farms and onshore wind turbines are compatible with farming - solar isnt compatible with cattle or crops but works well with sheep. Indeed these two renewables can tip a non viable farm into viable.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes. In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
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It's a good point, not made anywhere else. The economy has been destroyed by the City turning every single asset and commodity into a financial product.
Positive price control at the farm end will see demand for negative price control at the supermarket end.where prices will otherwise soar. Is that likely?
Great explanation,but unfortunately land prices will not fall as large companies will still use land to offset carbon,plant trees and other environmentally beneficial practices,all worthy causes that will keep land prices high and of course delivering tax breaks for the companies concerned and even subsidies paid to rewild etc. Land is a finite resource and will always remain a good investment for large corporations with or without inheritance tax,so once a farmer sells land it will always be difficult to buy it back if your relying on producing food to buy it.
I agree. Land prices will not fall due the fact that land is used for building on. With the hundreds of thousands of people who entered the UK. I have watched with horror the amount of building going on and building land was told is making around £1m acre. How true that is I'm not sure. But land will not fall. The old farming saying they are not making anymore of it. I have lived on the same farm for 60 years. I have also seen the prices go up. Rich people invest in land because on the whole that's where they want to live to get away from the city. Accountants have always given some bad advice in the past to me. Your gut instinct as my father would said is the best factor. If it's to good it's often true. Farmers on the whole are wally old folk as I have found out over the years. Inheritance tax will kill of farming. Because prices will not go down. I have seen people rich and poor want to live off the land. I'm only happiest on the farm with nature around me.
Just FYI: this is an interesting and well-argued video... that I nearly didn't watch because of the first part of the title (the second part wasn't visible until I clicked on it).
Many years ago I worked for the Milk Marketing Board, MMB as a truck driver visiting farms and dairies all over the UK. At that time the argument was that the MMB had too much control in setting the price of milk with the large dairies having a greater say in its price than the farmers themselves; they wanted to control the price themselves. Eventually they got their wish, the MMB was disbanded and farmers set up co-operatives to control as they thought, the price of milk. What happened of course was that the co-operatives were outgunned by the large dairies and together with the ever increasing purchasing might of the supermarkets who could obtain milk cheaper from mainland Europe if farmers did not meet their prices per litre here in the UK. They then found that they were in a worse position than back in the days of the MMB which was initially set up to give farmers a fair price for their product. The saying "be careful for what you wish for" is as ever relevant today regarding inheritance tax as it was back then in the days prior to the MMB being disbanded.
So what you are all seem to be arguing about, is that someone needs to be paying more tax. Well, here’s my observation. I left UK 20 years ago, to live in NZ, which has neither capital gains or inheritance, but now claims it needs at least one. Irrespective, both countries are currently identical: culture wars, health systems are a shit, roads are a mess, education is completely fkd. So I ask myself more tax for what??????? Can you guarantee that something is actually going to improve or is this just more money being taken from those that really work to feed the ever increase demands of bull shit jobs and the establishment.??
Well we need NHS funding increased, for one. Our healthcare working per capita is below par and needs adjusting, if we are to have a service that is fit for purpose.
You litterally gave yourself the answer: Both cuntries suffer the same problem, due to lack of funding of public services, and people in both countries are arguing that what is needed is to tax capital gains or inheritance (i.e. Wealth). No one seems to be suggesting "more money being taken from those that really work".
@@dogblessamerica The NHS is a mess, it needs sorting before anymore money is given - its not a Binary Keep it as it is, or sell it off to American insurance companies there is a middle path that needs to be trod - Personal example a simple ultrasound can be taken and read within 24hrs of it being ordered by a Dr for £40 (NHS lead time 8-12wks), un ultrasound guided steroid injection for £200(NHS waiting time 1 year), are these options highlighted by an over stressed NHS - no, if they were people who could pay im sure would and NHS waiting times would drop dramatically. Drug purchasing could be done at a national level, leveraging scale to drive value - at the moment its done at best at trust level at worse its at unit level driving purchasing costs up massively. The orderly that sweeps the ward is paid minimum wage and has been since he was employed in 1985, however there are now 3 levels of management and subcontractor umbrellas between him and his old boss the head of the facilities he now costs the NHS £50 a hour.
You are exactly correct - family style farming does not make a reasonable return for both the investment and the labour. Regardless of the structural issues adding inheritance tax to the mix when parents and child/children work the place together for decades is a huge imposition - the parents may have retired a decade before but still be on site when they peg out. If you want all farms to end up owned by Blackrock inheritance tax is a great way to do it. Here in Oz we dont have any inheritance tax yet still farmers are plagued by debt loneliness poverty and suicide.
You have missed the point. No IHT means land values rise too high to underpin an economic system. IHT means that wealthy individuals, who have been buying up land in UK solely to avoid paying IHT would not do so, would therefore sell off their land and prices reduce. Ensure that sensible controls on development keep farmland for farming and you start to get the balance coming right. There’s other things as well and this video explains them very well.
@@iambarks2814wealthy individuals have accesses to expensive financial advice that renders them completely safe from IHT though... so who's left to foot the bill in this scenario? those generational farms that aren't rich but are sat on land and lack the means to proof themselves against this kind of taxation....
@@iambarks2814 I think you have missed the point. The value of the land has very little affect on day to day farming of the land. The introduction of inheritance tax is going to force farmers to sell land , making it more available to large companies
@@jimkirkland1344Not sure how comparable this is to farms, but for houses the valuation of land is very regularly the most valuable component. The housing crisis is a byproduct of crazy land valuation as property = (build price * depreciation + land price). What proportion of farm price is land valuation? My thoughts are IHT may in the short term increase prices but on a macro level result in lower prices as farmland is less desirable to own.
Oh my gosh, you make a very well explained point here. 👍 I can see what you mean by the investment industry really messing up farmland values. I remember the days when farmland was really cheap, because it was of little use unless you were going to farm it!
Brilliant, I, (we) need clever people such as yourself who not only understand economics, but also have the ability to explain economics to people who don't. Thank you.
This presentation is brilliant. The government needs to articulate the points made here. There must be a lot of people protesting today who will never be able to afford a farm and are on the minimum wage, mobilised by oligarchs using farms and land as financial instruments to avoid paying tax.
Let's face it, farming labour, like labour in the hospitality industry, has never been a well paid career. To a large extent, that's why non farmers have very little sympathy with the plight of UK farmers, who are admittedly being screwed by the bigger food manufacturers and supermarkets. That's the real problem, farmers aren't being paid anywhere near enough, in many cases, for what they supply, whereas others further down the food chain are making rather nice profits, which can then be passed on to their shareholders, in the form of dividends. Capitalism at its finest, where someone foots the bill for someone else's greed.
When are we going to acknowledge that delaying IHT and charging it and CGT at point of sale the farmers would be protected and the non-farmers would leave immediately. It would also stop Labour apologists from putting out guff like this.
@@mrmagoo-i2lYes and he is using his voice to benefit himself and himself alone, he doesn't give a shit about any of the others farmers. Stop acting like he is doing a good thing when he clearly isn't.
@@Durnyful I don't need to, Jeremy himself stated that he only bought all the farmland as a means to avoid paying inheritance tax, so no he definitely doesn't care about other farmers who won't be affected at all by this change.
@@Redf322 To understand fully the attack on farming and the food supply you need to know and understand the 20x30 and 20x50 accords that the west have signed up too.
@@EvoraGT430 To understand fully the attack on farming and the food supply you need to know and understand the 20x30 and 20x50 accords that the west have signed up too.
That’s not it at all. We still need inheritance tax to close the farm loophole that inflates the value of land. We also need to tackle the issue of farming not actually being a profitably activity.
@@Fireclaws10 But in the meantime that is still going to destroy a LOT of farms for decades as this problem gets ironed out. So it seems to me that the farmers are quite justified in their protest. By the way... when we get this war that our leaders seem intent on provoking.... British farming will be profitable again.
So where were the protests over the rise of use of farm land as a financial investment a la clarkson under the Tories and the need for an inheritance tax . And given farmers are generally Tory/ reform voters you’d have thought they would free marketeers and protesting for a subsidy FREE industry as in NZ.
I see only one flaw in the argument. You might be right to say that the economic value of the land is zero, but its value for IHT purposes will not be assessed on its economic value, but its market value. So 100 hectares of land might be economically valueless, but commercially, several million pounds, and that's what IHT will be charged on.
Exactly this is the issue. I was thinking I was the only one who had picked up on that aspect of his theory. Yes theoretically if over time the price of land drops, then the numbers of farms who will currently be subject to the IHT will also drop. However there are many market factors that influence the land price and anyone who bought land to avoid IHT under the old rules is not going to want to sell it off cheap and take a loss are they? It is likely to see more trusts start being created the land will remain in the same hands. All the time the IHT is based on a figure that is largely locked up in the land price this policy will hit disproportionally the farmers who are land rich but cash poor.
Market value is dictated by supply and demand, if the demand goes down because of this IHT loophole getting shut down then in the longer term it will be eventually benefical for them.
@@SessDMC IF the value of land goes down. That is the key question. The closing of the tax loophole should, in theory, reduce future demand by those seeking to benefit from the old IHT reliefs, but all land is already owned. It cannot be created. Much of this land is owned by those who bought it to obtain the relief, and, as @johnstainsby7747 points out above, those who have done this could simply set up a trust to keep the land in perpetuity and rent it out to tenant farmers, so not increasing supply (and so reduce price) at all? Perhaps the government needs to look at closing yet another tax dodging loophole?
Since the 1930s, the average price of UK farmland per acre has grown by a staggering 17,400 percent, according to a Knight Frank report. In the 1930s, the average price of bare farmland was approximately £40 per acre, which surged to £7,000 per acre in the first quarter of 2021. Over many decades, Governments have ignored advice, to deal with monopolies. They have been able to use the lack of contol to their advantage and to benefit interested parties. Farmers need less regulation, indeed, I am beginning to wonder if the government should be billed for the paperwork they require.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes. In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
If farm land dropped in price, because "it has no value, as it is not making a return". The banks and lenders are going to shut down a lot of businesses as the security value is out of the financial models. So either way the current farmers are done. Maybe new entrants can make it work.
Excellent analysis. But there are a number of factors that you didn't mention.
The first of which is that the truly rich in Britain don't pay inheritance tax. When the present Duke of Westminster inherited his father's title, he also became the beneficiary of an estate worth many billions of pounds in the form of property and investments. But paid very little inheritance tax. Because those assets were held in trust. They didn't legally belong to the former Duke, and they don't legally belong to the present Duke either. They are the beneficiary of the income generated by those trusts. But they don't own them. The truly rich have access to the sort of expensive legal and financial advice to set up such trusts and, more importantly, they have such wealth that they can afford to create them in the first place.
The second of which is that owning land, even rural agricultural land, is something akin to buying a lottery ticket. Thanks to Britain's onerous planning regime, every year some portions of Britain's farmland gets granted planning permission for new houses. At which point the hectares of farmland that were generating little, if any, economic return, suddenly sell for a value in excess of a million pounds per hectare.
The third is that this Government, much like all Governments since (at least) the end of the Second World War, has pursued a cheap food policy. The Government wants bread, and milk, and vegetables to available to consumers in city, town, and village alike at a cost relatively low compared to average wages. It would be difficult to increase the prices paid to farmers for their products without seriously challenging this policy.
The fourth is that, since at least the second half of the nineteenth century, British farming has faced an almost insurmountable cost challenge from cheap imported food. Its far cheaper to produce wheat, and beef, and lamb in vast open spaces of Canada, America, and Australia than it is on the small, cramped, and hilly fields of England and Wales. You can tell a British biscuit maker to pay their farmer-suppliers twice as much for the wheat they produce. But our current free-trade regime means that British farmers still have to compete with foreign wheat growers.
And lastly, we in Britain have created an almost impenetrable labyrinth of competing interests for the use of the land. We want a countryside that is unspoiled by ever-spreading development. We want (thanks to the experiences of two World Wars) a strong and reliable supply of domestically-produced food. We want walkers and ramblers to have access to footpaths and byways along and across many privately owned fields and pastures. We want food to be uneconomically cheap at the supermarket. We want the benefits of free trade. We want to restrict and control the use of fertilisers and pesticides. We want to protect various species of wild birds and animals. And so on. All of them, individually, good and noble goals. But at some point one has to recognise that some of these are goals are simply incompatible with many of the others.
Farming in Britain needs to be fixed. And doubtless inheritance tax is part of the solution. But in reality, it should be the LAST step taken in that process. Not the first.
An interesting addition to the question, I hope Richard Murphy reads your comment and responds.
A very good analysis.
Inheritance Tax is pretty much an irrelevant detail in all of this, but a politically incompetent Government has now given it a prominence that is out of all proportion and allowed it act as a lightening rod for 1000 other grievances. This is gift for the grifters, class warriors and conspiracy theorist who are extracting maximum value out of this situation. Once again farmers will get the least return or value for their efforts.
The worst aspect of this is that it has cemented the loss of trust between farmers and government. The last administration talked big about a 'just transition' for post Brexit agriculture, but delivered bugger all. There was a moment when Labour could have turned things around, but with their tin eared ineptitude they have completely blown that out of the water. I see no evidence that there is anybody in the current administration with the vision or ability to turn things around now.
I would add wanting solar power to meet net zero targets and converting farmland to solar farms. Does it still qualify as farmland then? And of course planting trees for carbon offset and then never looking after the trees. And if the land is owned by a corporation, does it avoid inheritance tax altogether? I like Richard's explanation, but think there are other factors which will not simply result in lower land prices allowing new entrants to farming.
@@auntymeg9 the Church and crown estate own the largest % of the agricultural land in the country and neither have to worry about IHT..which alone speaks volumes about this policy change
You obviously want no building on the land. Only 7.7% of the UKs land is settled. The country is empty.
But inheritance tax is not charged on corporate owned assets - companies don't get charged or pay inheritance tax. So inheritance tax charges will accelerate the financialisation of farmland as it will push out private owners in favour of large corporates.
But why, other than emotional reasons, is this bad?
Large companies are inherently more efficient than small ones.
We don't, seriously, complain about supermarkets pushing out smaller, family owned shops because we value the price saving more than the nostalgia. Why should farms be any different?
@@SmileyEmoji42 Corporates are of course primarily investors and therefore require a return; they are not custodians of the land in the way that generations of a farming family may be, and will have little interest in anything that does not have a prospect of a short term return. Farmers usually consider themselves the custodians of their land for the time being, and do what they can to improve it - in many ways that do not necessarily equate to a short (or any) financial return, eg planting tree belts etc and creating habitats for fauna. Corporate investors would prefer to pull out the hedges and field margins, and put all the land they can into productive use.
If what you say is true then registering a family run farm as a company would bypass this completely, and all farmers would have done this already ... that they haven't means either you are wrong, or it will cost more to do so ...
@@davidioanhedges I've been saying this since Reeves' announcement. Anyone can turn their asset into a Ltd company and have their family as directors and shareholders. This is also very fair as farmers then will be treated exactly the same as business owners in terms of IHT. Of course there is also the approach of just handing over the farm at a sensible age to offspring and making use of the 7 year rule. With thses options I suspect any government will make very little out of IHT on farms.
Whoever inherits the shares in a company may need to pay inheritance tax on the value of those shares, at least thats what I understand
Absolutely! Most people want to support farmers. But there is too much money being made by manufacturers and supermarkets etc and no one wants to do anything about that.
@@wildberrygarden We should tax supermarkets more...
@@pamelabaines3604and manufracturers... But shrinkflation is already fully going and will most certainly lead to a fizzling out of ufp
@@pamelabaines3604sainsburies are the Tories biggest donor I heard.
@@Redf322 Sainsbury's at one time donated to the Lib Dems, I seem to remember. I don't know if they donate to the Tories at the moment. Most people would agree farmers are being screwed by the bigger supermarkets, also it's noticeable than many foodstuffs previously grown in the UK are now imported. Recent purchases by myself at our local suopermarket have been lamb from Oz, mushrooms from Poland and tomatoes from Israel.
The amount that supermarkets charge their customers and what they pay farmers are two entirely different things.
OK mate, fix global farming economics, then when it's all fixed and farmers are making 10% return on assets, come back and change the IHT regime. Until then, the cart is leading the horse, and most farmers know which way round they go.
Yeah but if a problem is because land is too expensive because of the tax break, as his point was, then this should help?
@@TheStalec Land is too expensive, agreed. Because of the UK IHT regime? Come on, farm land (and land in general) in Germany is even pricier and it's a bit of a stretch even for the muddled thinking in this video to say it's because of a tax break. Another plausible reason is that we are making more people faster than we are making more land.
Perfect comment
@@andybarnard4575 Nobody cares about Germany. We're on about how things work here in the UK. And we're not running out of land as you imply. One of the real issues we have is that too few people own too much of it. 1% of the population own 50% of ALL land in England. A large number of that 1% will be able to trace that ownership back to the events of 1066.
@@TalesOfWarAnd 1.4% off the workforce make ALL the food. Taking their land away starved Zimbabwe, Ukraine and China. Doing the same and expecting a different result because we're British and not like those johnny foreigners is not a policy I can support. But you do you.
The problem is that all the farmland will be sold for solar farms or new housing estates and not so that a new generation can get into farming.
Exactly
All of it? No.
Im a farmer, and i fully agree with this
If farm land value lowers it has less guarantee value for bank loans which makes loans more expensive?
Thanks, Marcus, for the honesty of your post. I was in business with many changes I didn't like. It forced me out years before I wanted to. But before crying, Wolf. I knew most of these changes were justified. I didn't like it but just couldn't square the round.
My farm is a small farm. I don't get subsidies. Never have. I would like to expand. My model is profitable. I would prefer not to be in competition with people using land as a tax dodge or else to farm subsidies. That's the truth of it. I also feel like a lot of farmers are stuck selling at low low prices. My model is direct sales, so I sidestep that problem. It's good for everyone
@@marcuscosgrove9431 did you farm in the National parks?
@pamelabaines3604 my farm is across the road from a national park. So not directly in it.
Thankyou for the explanation. Ex farmer here & I can tell you that if farmers were left alone to farm, things would be a lot better. Farmers are hamstrung at every turn by miles of red tape caused by people that have no knowledge or attachment to the land. You cannot do ANYTHING without THOUSANDS of rules & regulations which all cause massive amounts of STRESS & worry which has nothing to do with economics. I can tell you as an ex livestock farmer that the worry about all the ever changing regulations made me nearly have a nervous breakdown. You are unable to plan anything. Farmers have to plan & cost things years in advance all with the everchanging seasons & unpredictable weather, which, left alone, they have been able to do for thousands of years. Farming is a way of life. Many, not all farmers, are rooted in their land. They come from a gentler time before economics & money became the over-riding, crushing, stifling, ONLY thing in this country, &, like every thing else farming is about to be ripped up & swept away in the name of so called 'progress'. Personally I'm sick of the progress in this country & long to go back to when people were valued over PROFIT.
So they should pay the same inheritance tax as everyone else, which would be more than what is proposed?
The big problem with farming is subsidies. These allow the bigger companies, ska supermarkets to drive down the cost. When they are removed or even just tweaked, it is farmers who are left holding the can.
Then when we say that they should do better for the environment, which they should as farms are destructive industrial landscapes of monoculture, we don't give them any compensation.
So we neither help farmers in the existing system or help them to move away from that system.
Sadly Richard it's a bit flawed.Very wealthy individuals e g Clarkson can afford to pay the inheritance bill.Smaller farmers will have to sell some or most land,who will buy this? The wealthy,e.g.Clarkson et al.Or housebuilders.Im pretty sure Labour are doing this to release land for house building and relying on more and more food imports.
There is no way out of our social, climate and economic problems as long as the worship of the Great god Maximum Profit continues.
@@waynegodfrey8565but if Clarkson bought a steel bashing business for fun he would be able to pay the inheritance tax too. Hobby farmers will always have an advantage in this case as proof running hobby woodworking businesses after working in the city do too. However there is.a limit to the number of them, what can really distort the market is financial people spending billions to avoid tax. The inheritance tax will help with this.
The unintended consequence that I would worry about if land got a lot cheaper I'd people just buying farms as big gardens and not farming them.
I think that farms should have inheritance tax levied on them but if the owner or inheritor is farming them the land should be valued as a multiple of the rent you could charge for that land. That gives real farmers' an advantage but not big landlords.
Farming does of course pre-date the Neoliberalism that is crushing it right now and even the Laissez-Faire economics it grew out of. The majority of farmers however did not just vote for this system they actively cheer leaded for it with political hoardings every election cycle, don't even talk about Brexit.
Does this mean they deserve it? IMO yes, Osbourne demociding disabled and poor people was fine by them. They are redeemable however. Farmers, probable because of the advertising space they own, have been politically active and influential my whole life. Agitate and advocate for something better. Or get in the bin.
I'm a Kiwi who has been in the UK for 30 years. My observation is that in New Zealand, farmland is valued as a multiplier of its productive output, so that ROI is baked into the sale price. In a non-subsidised agribusiness market, farmers balance the potential monopsony of food manufacturers and supermarkets through vertical integration. That is the farmers own cooperatives which own the processing plants and turn out finished product at a wholesale level - this applies more in meat & dairy production than arable, where spot markets & futures trading are used as hedges.
It's widely acknowledged that changes in tax policy can have transformative effects, both good and bad and intended & unintended across any industry. The trick is having very well informed industry sources participating in that policy formulation.
The problem with the UK is that the City of London exercises extreme power over all concerned. Another example is the sacrifice of the British fishing industry on the alter of Brexit by Boris and his mates.
What are your immigration figures like?
_That is the farmers own cooperatives which own the processing plants and turn out finished product at a wholesale level_
What! That is Commie to the brainwashed green wellie country dwellers. When was the last time a country seat voted in a Labour MP? Then they want financial privileges because of their stupidity.
Sounds dangerously close to Socialism, or common sense
What’s the inheritance tax on a farm in New Zealand?
I have a small holding in France so have an interesting perspective on this issue. The average size of a farm here in france is 70 hectares (173 acres) and the market price per hectare is €6200 which is equivalent to €2500 per acre, which at current exchange rates is near enough £2100 per acre. The average income of a french farmer is €56000, of which about half is various subsidies from government and the EU.
The comparable figures for the UK are .. average farm size is 88 hectares (217 acres) and the average market price is around £10,000 per acre (5 times that in France !!)
Trying to get average incomes for a farmer is difficult in the UK , on the one hand farm business income is £72,000 on average, but this clearly excludes lots of costs and salaries etc, probably more realistic is a figure of around £26,000 to £28,000 per year as salary.
There is clearly a major factual problem here with the levels of inheritance tax being imposed by the labour government. If the average farm value in terms of land is already at 217 acres times £10,000 then that means the AVERAGE land value of a farm is £2.17 million, and by the time you add in farm buildings and equipment (milking parlours, grain silos etc) it should be obvious that the average farm is going to fall into the IHT regime...
I think the average IHT payer is probably looking at the cost of a piece of high end machinery that can probably be hired instead of being bought. The big thing is that 64% of the land is held by tenant farmers who will not pay IHT but will have an opportuinty to buy land that becames liable to UHT.. The land will always have owners and farmers and the land will pretty much always give the same production.
@@theotherside8258you are forgetting that the big country estates and landowners hold most of their assets in trusts that are not exposed to IHT.
The farmers who will be exposed to IHT and forced to sell land won’t be the big landowners.
@@sookibeulah9331 I think thats why the govt says only about 500 farms will be affected. The massive landholdiings held in trusts should perhaps be dealt with by taxing trusts each year with CGT for assessed changes in the value of land to stop them being used as vehicles for tax evasion and with a yearly half% added on representing Inh tax that would have been paid each generation if not in a trust. It might be also an idea that tenant farmers should have the right to buy land held in trusts perhaps at 85% of market value - like council houses. Should perhaps be some exemptions for where rentals are required for upkeep of historic houses and gardens
If all people were treated like royalty and not subject to inheritance tax then everyone would act in a natural fashion, with farmers retaining farm land which would be of no interest as an inheritance tax loop hole, because inheritance tax would no longer exist. It is adequate to tax farm land, that is sold, if its use is changed from farming.
@@davidcochran848 sounds outrageously sensible to me on first reading !!
You explain this brilliantly - would love to see you as a commentator on mainstream media. People need to hear this! Thanks.
Brilliant explanation as ever. This situation is a consequence of the ending of the produce marketing boards under Thatcher's neo liberal economics firstly. Secondly it is indicative of the obscene concentration of wealth we have seen over recent decades.
Agreed. Perhaps it might be an idea if someone from the Farmers Union came and explained how Mr Murphy has got his explanation all wrong and this change in Inheritance Tax will affect farmers to the their detriment?
Let me tell you about our farm. We have about 300 acres in the midlands. I'm guessing but let's say it's worth £4 million if you include the buildings, equipment, livestock etc. So when my parent pass on and the land comes down to my brother and I to farm, my family will receive a tax bill to the tune of a million quid. In what possible way does this not utterly destroy our business without us having to sell off large parts of our land that has been passed down for generations... most likely to someone far more wealthy than we are.
@@goodlookinouthomie1757
Why don't they pass it on to you now?
They would only actually need to sign over the amount above their relief.
Why would you end up paying 25% of total value when there is an allowance between £1.3m and £2.6m and the taxable amount is only taxed at 20%?
@@slayerrocks2 There is serious discussion in our house about all options, believe me.
Very good description. The farmers used to sell a lot of produce in wholesale markets and auctions then they decided in the eighties to give supermarkets the control of food supply and therefore prices!
Thank you, your videos are extremely helpful to help us all understand more about how these economic processes work and what the underlying problems are in reality.
Although the inheritance tax relief for farms began in 1984, a lot of the land price rise began around 2005. A bit of googling suggested this is connected to changes in the tax rules for trusts, so buying farmland instead suddenly became worth the trouble. Does anyone know more?
This is THE BEST video on economics I’ve ever seen. Unfortunately, facts don’t change opinions.
It is critical to listen to whole of this video to get the full message. I follow a few farmers on RUclips, and having studied economics at University I can relate to all these points. Interestingly Rachel Reeves has not been able to articulate these points, (maybe she is not an economist?). The logical conclusion from this argument is that in the UK we need to pay considerably more for our food. However, I think as a nation we need to stop eating Ultra Processed Food (UPF) as a matter of urgency. Ironically more than half the food in our supermarkets is UPF. This is a huge subject. Thanks for making a coherent argument in favour of real farmers.
The follow on from this is that either everything in the UK market is overpriced (housing, bills, fuel, etc - not food, which is obviously too cheap in most cases) or the wage bill of the populace is being suppressed. Either could be true (one needs to balance the other or no economy because no-one will have enough money to spend into the economy) which leads to presumption that the current model is untenable (the obvious cause is greed. Mainly by the financial sector. An example of this is the cause of quantitative easing: the financial markets are bailed out by governments and the public ultimately foot the bill..but there is no real change by the people that benefit the most in the financial sector).
@@inguzwulf Housing is definitely too expensive. Some items like new cars are way too complicated for getting people from A to B. Focusing on farming today, I wonder where farmers being paid to not farm, is going to take us as a country regarding food security. Once farmland stops being farmed it will take time and money to bring it back into production.
@charleswillcock3235 Unless it's all bought up by 'big business' (whoever or whatever that may be) and repurposed (via supporting whoever's political career/interests/whatever) for some money creation scheme then it will be too late to do so.
But on a positive at least it will mean growth in financial terms, so that'll fit right in with current policy.. hmm,🤔..
People's lack of long term thinking amazes me sometimes, and at others makes me want to just scream.
@@charleswillcock3235
The oligopoly of supermarkets is creaming off a lot of profit
Precisely like Kamala harris, reeve can talk dumb dumb messages to idiot farmers. End result Tories shall be voted in and stay on forever and ever. Get it!!!!!!😂😂😂😂😂......give up......
In the long run this is the ideal. The issue though in the mid term is that land banks don't make money off their land but make it through other financialisation instruments and so could pay the inheritance tax if it came to it. Farmers can't. So the land will still be valued more, and more land will be swallowed up. Unless of course there is a general decline in the economy such that those land banks need to asset dump. So what we will see is land values staying high unless the government steps in and rezones the land itself or forbids using farmland in this way as an asset. But that then leads to a control economy.
The trouble with that as well is many pension funds will be linked to land banks and so the underlying asset price is already locked in and we don't have a healthy environment for funds to make money investing in companies. So a drop in land values hits the pensions.
Inheritance tax in general is a stupid spiteful tax and should be abolished but if it can be used as a tool to change the system it should be applied to land banks. It doesn't take a lot of work to find out who are the farmers and who aren't. That would help reduce the price of land as well meaning farmers get a better return.
So I disagree that they are protesting about the wrong thing. They need to have the tax applied to those land banks and large estates, essentially closing the loophole. However when has the government ever got closing a loophole right, so maybe your point stands!
Of all absurd taxes createdby the state the death tax is the dumbest one😅
Most of the privately owned land in the country is held by the church and crown estate... which unsurprisingly don't have to worry about IHT...which speaks volumes about a governments claims of making land owners "pay their fair share" through this measure
but I agree IHT is a tax of spite and envy for the most part
I agree, there must be a better way of targetting the tax. Perhaps by valuing the land at probate not on market value but on production value and taking into account rents and then charging higher tax on land that is not worked properly by the owners as a farm.
This is excellent. You list 3 problems farmers have but you missed out the fourth: The low real wages which the end customer, the consumer of the farm products, receives. This does not in any way detract from your other arguments but I think it should be mentioned as the overall prosperity of the population is bound to have an impact on farm gate prices. The point about the financialisation of farmland is the killer, though. The farmer is being robbed by parasitic financial capitalism just like everyone else.
True, I would love nothing else than eat good quality, British farmed and preferably organic produce but I am FORCED to choose (still) cheaper imports. Locally produced food is Iuxury I only sometimes can afford to indulge in, mainly during the hight of the season.
Nonsense people now are hugely overpaid. That is the national problem. Min wage is farcically high.
@@nicholaspostlethwaite9554 No. It's those living from extractive capitalism who are over-remunerated. Workers, the people who actually create the wealth, are farcically underpaid.
@@charliemoore2551 Oh that old nonsense, dull 'workers'. If work were the valuable part of life, Donkeys and other working animals would be the highest paid! Get ready for humanoid robots and AI taking away all your supposed valuable purposes. Labouring to clever jobs all soon to be eviscerated. Home truths coming.
Pay is vastly too high particularly in the west most developed nations, making life very expensive.
I was only a dull worker too, but reality can not be denied by fantasy thinking.
It's about time someone told the farmers the truth
They are being led by rich tax evaders and complaining for them.
This is a great video
That makes absolutely no sense at all, in fact it is full blown moronic. Cripple working farms with a tax so that you can pretend to tax the elites that actually own the majority of the land. The elites will find away to keep avoiding paying this tax. You will end up paying more for your imported food and it will be inferior in quality. That is if we don't have food shortages just look at the weather not only in our country but in others. We buy 32% of our food from the region just outside of Valencia in Spain that flooded. Same thing with California from what I have heard.
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Lack of economic education can lead to people of many walks of life to fight against their self interests due to simply not knowing where the cause for the problem lays.
Yes same reason most farmers supported Brexit because of general dissatisfaction.
It doesn't help when bad faith actors (usually cronies for oligarchs) delibrately mislead them.
@@waltermcphee3787 A small number of very wealthy people were aware that farmers would vote for any kind of change and therefore gave them the option of a poisoned chalice which would allow them to eventually increase their own land portfolios. Result: yet more private land owned by fewer people, fewer working farmers.
@ryanseddon4800 but also not speaking to the people that will be affected. Not understanding what one is doing. They didn't speak to the NFU etc. They didn't get the facts before acting.
Lets be honest here media disinformation is getting beyond a joke, until there is a way to hold people accountable for spreading horse manure that they know to be lies everything is just going to get worse, look at the last 10 years, in the UK we had Brexit, right wing morons that told complete an utter lies purely for their own financial gain, you had Trump get elected, and what a surprise the only thing he actually did of all his promises the first time was lower taxes for him and his buddies, the same idiot that after probably one of the worse terms in recent history gets another shot after literally having to be forced from the building the first time, all of this has been enabled by a concerted effort to muddy the waters, from newspapers to podcasts to TV, the misinformation is everywhere and most people switch off, give people simplistic answers to complex questions and people don't seem to question them
I spoke to a young man who worked picking vegetables on an English farm. He told me the buyers reject any produce which is perfectly edible but which doesn't look standard shape, size ie pleasing to the supermarket customer and is thrown away. 40% was thrown away.
It has been estimated that about a third of all food produced and bought goes to waste.
I've seen in some supermarkets they have started trying to offer cheaper vegetables that are "all sorts of shapes" meaning they are less picky about the cosmetics of the product. This may be the start of a positive change as you say. Nevertheless, the customer is still going to sort through everything, squeezing and assessing before they buy.
Buyers reject them because, and only because, customers in the shops reject them. That's me, probably you, and certainly the vast majority of the public.
(Also, when used as input to food processing, the machines cannot handle items that are too far from the average)
@@SmileyEmoji42 Evidently we are too comfortable and too well fed. There will come a day when this is no longer the case.
That's one of those pathetic EU standardisation rules we should have dumped.
I want to give you a hug , you have expressed something I have understood for a long time but couldn't articulate properly.
A few things on this
- the inheritance tax is being introduced *in addition to* the problems farmers have with revenue. These events do nothing to solve the underlying problems, it just adds another one on a very financially pressure sector
- farming is an incredibly risky business - crops fail, costs go all over the place, the price of their produce fluctuates wildly. Most farmers will be running lending with the bank. So the risk of the business puts additional strain on the finances
It’s a good point you raise that farm land is now being used as a financial instrument to avoid inheritance tax. I agree it needs a farm cleverer system to close that loophole but remove the issues of inheritance for farmers.
Incidentally, worth following up on the national “greening” (or rewilding) initiative - to take farmland out of use as farmland and grow (very easy to maintain) grass and natural plants for biodiversity. Huge financial rewards from the government for doing that - and I’m sure the investors will be benefiting from that soon too, if they’re not already…
However, just closing the loophole will not resolve the precarious income vs. Costs balance of running a farm…
Exactly.
Clearly didn't watch his video all the way through where he explains why inheritance tax which help most farmers... 12:20
Fascinating video.
Brought up in a converted farm building I witnessed first hand how a fifty acre mixed dairy farm worked. An important part of the mix was reciprocity. Competing neighbouring farmers cooperated. The farmer with a muck spreader spread all his neighbours’ muck. The farmer with a baler did all the baleing, similarly the grass cutter. Farmers’ labourers were lent out to each other. Massive meals were provided free around large refrectory tables. In other words, vital farming inputs were available without any cash changing hands at all. This system in which each farmer’s prestige was measured in the excess help he had given to his neighbours over and above the help they had given him provided a distinct and powerful morality. I think this is partly what farmers miss when they regret the profit motive having entered into farming.
Today my understanding is that farming inputs are provided in much larger degree by contractors eg sheering, drainage, silage making, muck-spreading etc and reciprocity is almost dead. Why has this happened? And is contracting out part of the problem too?
Farming isn't the only user of land. Forestry, solar panels rewilding and building competes for land use with money from outside farming. It's highly unlikely that land prices would fall with an inheritance tax.
I mean not to mention housing. And we all know why we need more houses. Our population grows by 350k per year and it's not because the natives are having babies.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes.
In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
@@goodlookinouthomie1757 grrrrrr immigrunts
Way more than that!!!!
A superb analysis which reveals the reality of a contentious issue in simple economic terms. Thank you.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes.
In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
I was fully prepared to ideologically disagree with the video. I stand corrected. Great insights. 👍🏻
Excellent and interesting analysis.
A couple of questions, if the debate hasn't moved on.
Why is the impact of Brexit mentioned but not analysed? To controversial, politicised, obvious?
Why are farmers misled on their protest? Misinformation? Bad actors? Political influence?
Thanks again for a clearer picture.
This is exactly right. Family farmers and landless agricultural workers have been ideologically captured by the class interests of large landowners and the financial sector. The support Brexit had from farmers showed this too.
Wow. I was surprised to find myself completely in agreement with the professor.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes.
In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
I heard it was said by the politicians that these taxes are needed to pay for our NHS. Apart from probably a lot of mismanagement of funds, the reason the NHS is in trouble is because of our nations very poor diet. I am convinced an awful lot of our health problems come from our poor diet choices, egged on by food and beverage companies. Maybe those who make ultra processed foods should be the ones made to pay for our NHS!
Well said, poor diet, mental health treatments, geriatric care, MRI scans, cancer care, vaping, alcohol and drug use, were nearly all never imagined in the 1950s 60s, even 80s....the NHS is being punished for poor policy planning, needless austerity, longer life spans and dumb human consumption choices...
Banning Coca Cola, McDonald's, and snacks is much cheaper than subsidising healthcare, I agree. Perhaps banning video games and recreational social media (as opposed to political social media) could also save billions.
More than half the food in all the supermarkets I am aware of in the UK, sell food which should be labelled in the same way cigarettes are namely, this will cause you to increase your weight, is bad for your health and will shorten your life.
Our NI should pay for the NHS
Leaving aside the Orwellian notion of a government mandated diet and exercise regime, I doubt that is true. Even if it were possible to educate everyone to eat well and exercise abstain from excessive alcohol consumption, such a thing would result in significantly extended lifespans, and the majority costs are in a) pensions and b) end of life care. Increasing the number of pensioners by even 20% over the projected figures would result in state pension failing entirely (it will fail anyway in the next 40 years, but hopefully not catastrophically) and the NHS becoming overwhelmed.
Brilliant, thank you Richard for explaining this si clearly.
This is a brilliant illustration of the farming inheritance conundrum ❤ Everyone should watch it.
There is an inheritance tax in Japan and Japan is the easiest country in the world to become a farmer because land is so affordable and in many cases free to rent.
Murphy has got half the picture. IHT is the wrong solution to a real issue. It does not address the problem of food wholesaling and supermarket retailing that Murphy refers to; that will continue. The tax will be avoided and will just put their farms in a trust. Nice work for solicitors.
As Murphy points out, prices of farmland bear little relation to their value as farmland, due to speculative factors (including IHT exemption), but here are other factors such as the assembly of land banks by developers - which Murphy does not refer to.
Land that gets forcibly sold off to pay the tax will mostly go to corporate owners who will put the farmland under management and work it for maximum profit. Alternatively, it will be mortgaged - and effectively the land will be owned by lenders. Either way more farmland will be treated as a resource is
He hasn't got half the picture, I think you've only understood half of his point. He doesn't claim this IHT change will affect the problems you've mentioned, he completely agrees with you on that point. He's saying that giving the current exemptions from IHT to farmers exacerbates some of those other problems, in addition to giving an unfair tax break to many who don't need it.
@leemcivor6785
IHT is a bad tax. It has never achieved the intended result. Nice work for lawyers and accountants, though.
Murphy knows what the solution is but always ridicules those who mention it.
That's about right. Where is British Agriculture going. It's going in a direction that is favourable toward those who have deeper pockets and want more control of food production. Namely, corporate interests who are in line with the business of government.
I agree. Inheritance tax is theft, even though I disagree with the sentiment that taxes in general are theft. Taxes should only be on income and on 2.5% of liquid (not frozen) assets.
@موسى_7
Taxes on wages, goods and services are robbery, pure and simple.
Ah. What a great explanation. Somebody told me this the other day and I didn't quite understand. It's clear now. Surely the solution is to charge inheritance tax on land which is not provably anf actively farmed.
Not productively farmed by the land owner or their immediate family (ie adult children)
Thank you so much for your posts, I find them so useful for my old grey matter, food for thought! I in my limited capacity, also think you are correct with your analysis of the subjects you choose, which are relevant! Having the ability to make people think seriously about subjects we know little of, but are pertinent to present day events that affect our lives is a skill in itself.
Thank you for making this video. People need to understand how the land ownership system works and who's really in control
Every farmer needs to see this
Every *REAL farmer shoud be made to watch this. Thank you Richard, this was very good, and very well explained.
Why isn’t the government explaining this to the public and to farmers?
@@LD-vn3zuit's a bit like banging your head against a brick wall lol
But this ignores the issue that other industries use farmland such as mono-culture forestry, solar/ wind energy generation, leisure, and housing development. All of those will continue to drive up the cost of farmland even if tax avoiding investors are driven out through IHT.
The reason farmers are complaining about IHT is because it was a sudden decision chosen by the government, it did not have to happen this way, the threshold could have been higher, implemented gradually etc I think it’s perfectly fair that they are angry about it because will lead to a lot of pain for certain families.
I’m sure they are also perfectly aware the business model is Broken, and that lack of IHT has inflated the land value etc.
Pretty much everything you say bigger picture is correct, but lack of empathy for people having a completely understandable and rational reaction to the succession of their livelihoods being impacted is quite patronizing and unfair
And n a lighter note, it’s good that you agree with reeves for a change on something, even if you aren’t exactly out and proud about it 😜. Good discussion 🙏
This was an excellent piece if only farmers understood economics!
A really good explanation Richard, as you stated its the food manufacturers and supermarkets that drive the cost to uneconomic levels for farmers, and regulators do nothing, saying “let free market conditions prevail” thats not working for many reasons. I.T. Can also be negated by putting the farm into a trust.
Not sure this does much to dissuade use as IHT planning. It is still favourable as part of the mix. The upwards pressure on farmland prices is because of new buyers, namely "green" funds and investors. Even farming is becoming partly carbon sequestering credit business. These add pressure to supply, demand. Without new buyer types, it is just merry-go-round, farmland being swapped in and out, the price is not changed much, IHT rules have been in place for many many years. There is limited number of people attracted to use farmland for IHT. But "green" funds aspect is peeking interest from all parties. So unlikely for land prices to drop. Main frustration with this government is it's pigheadedness, lack of consultation, no idea the real consequences of any of their plans.
I see two issues with this argument. Firstly, there will be a group of farmers who have invested their capital in the purchase of the land. They would stand to make a loss on their capital if the value of the land fell. Secondly, in parts of the UK the alternative use of land has high value, housing development.
In both of those cases, they should be treated no differently to any other form of capital, then.
If one has invested capital in the acquisition of land for farming, the value of that land post acquisition is irrelevant, until such time as that land is passed onto someone else, if the idea of the acquisition is to earn an income/profit from farming rather than by other means. I very much doubt that serious farmers borrow money to acquire land - the rate of return is too low and risky for banks to countenance.
@@richardhale9664 🙋♂many farms will be very highly geared with borrowing, trying to keep up with the other interests trying to buy farmland. Dipping into negative equity will be a disaster for my family, most of the farmers I know are highly borrowed. We have tried our hardest to invest in the business to create efficient production and economies of scale, but it's a brutal market to be in.
@@richardhale9664Banks have been keen to lend money to buy land to farm. Its seen as a very safe investment, and farmers do buy farms .
Well explained but the land of real farmers should be valued based on its agricultural return but the land must be farmed. The problem is the government is not bright enough to realise all this is argue it coherently like you!
Unfortunately the Treasury and the City of London are bright enough. It really. does need an end to end drains up with a holistic approach to find the highest level of "the common good". Farmers should be treated more like well paid custodians of a National treasure.
This was 'kind of' the situation as it existed previously. 100% inheritance tax relief on land farmed 'in hand' is a covert admission that the land has low financial value as an input. By extension, land should thus be subject to price control at a low and fixed value to end it's use as a speculative asset. Let scum speculate in gold, bitcoin, works of art whatever- not the source of food.
That was an absolutely brilliant three minute video that not many will see or know about because of its actual length.
Thank you for so succinctly saying exactly what I was thinking.
Thank you for such a clear explanation. I've been struggling to understand where I stand on this issue and you've helped me to see that what we are being present on the surface isn't the real issue.
He hasn’t really offered any solutions to the farmers though has he?
All he has said is that it would be better if farmers got a fair price for their produce
And that the land is over valued
1) Farmers can protest all they want about getting next to nothing for their products it’s not going to change anything quickly.
We live in an international world and even outside the EU our farmers would just be undercut by foreign competition.
Say they did get an increased price for their crops who is going to pay for that are the big companies going to just absorb the costs? No they are going to pass it on to the consumer pushing up food prices.
Is the price of land going to drop because of this I would not hold my breath.
Instead farmers who are just scraping by get hit with huge inheritance bills
Let’s take Richard’s £3million example
Say a husband and wife die
Leave it to their son
He is entitled to a £500,000 tax exemption per parent = £1million.
But will pay 40% on the remaining £2 million
That’s £800,000
The government will give you a 10 year interest free period to pay that which is £80,000 a year on top of the other overheads to run the farm.
Richard’s points about about how the system is not working for farmers are valid but inheritance tax does not fix them it only give them additional overheads to pay.
The result of this smaller farmers end up selling up taking a big lumped sum. who buys the land the large companies with tens of thousands of acres give it time farming will become like the rest of the food industry the majority of which is owned by 8 large corporations.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes.
In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
He's just highlighted what farmers have been saying for years nothing new, but the tax will finish alot of farmers off
@@johnredmond6723and that’s if the farmer is still married. 42% of marriages end in divorce. Why should that statistic be any better for farmers. Also 38% of farmers are over 65 so have a greater likelihood of being windowed than most of the working population who are largely under 65.
Really useful information here. Thank you.
I buy veg , meat and dairy boxes to directly support farmers because I've known about manufacturers control for years
Live vegan
@@yellowgreen5229 No
@@yellowgreen5229 I would sooner eat a vegan than be a vegan
@@yellowgreen5229who do you think grows the veg and grains etc?
Agree. 😊 I buy a meat box and sometimes a fruit box from an orchard in England. The apples last quite well and nothing is wasted.
Absolutely bang on the money!! Fantastic video and the best most honest, factual and concisely laid out video or content I have seen.
I agree we should be protesting against prices and take back some of the control the marketing boards used to have pre 90s and have since been replaced by the supermarkets. Hopefully the follow on from potential further action in the form of a strike will put more emphasis on our need for food and its value.
Land prices are pushed due to external purchasers pushing prices from predominantly non farming people
Thank you so much.
How did we, as a country, get to this point? It seems to me that the famous "City of London" has a lot to answer for, and the sooner it is dismantled the better for us and the rest of the world.
Excellent, had not considered that reasoning.
Only one point, food producer and supermarkets, yes, but actually it is the consumer who is only willing to pay next to nothing for rubbish food.
Good comment, Richard. Many crop and animal farmers are squeezed by big buyers and supermarket chains. Many farmers are tied by contract to supply only ONE buyer and are not allowed to sell to others. A massive amount of land is owned by listed companies who pay no estate duty. Most family farms are owned by private companies whose shareholders are family members.
Great video. Should be compulsory watching. The whole protest feels astro turfed to me anyway.
Quite informative, clear, and helpful. It has helped me to understand the current situation in the UK better.
So just curious, what’s the safety net to stop farms from selling land to corporate entities who consolidate the farming?
If they’re forced to sell due to poor profitability I can’t see how a new farmer will be waiting at the gate to purchase the land and make an attempt themselves.
So it seems like the land is valuable and would more likely be eventually used for housing, since that’s an issue. And even if you restrict it in a way that requires farming to continue, we have the first issue.
Cribbing from the current issue of Private Eye, be curious on other opinions on it.
"But no inheritance tax will be due on the first £1m for farmland, with 20 percent due on anything above that (half the usual IHT rate) however large the farm. Moreover, inheritance tax remains zero if the asset is passed on to heirs at least seven years before death, so unless a death is unexpected and sudden, the tax is effectively a voluntary one and unlikely to raise much revenue."
"A far more lucrative tax change would have been to abolish capital gains tax (CGT) "rollover relief", which allows farmers who sell land for housing to put their profits into more farmland without paying any tax at all. This "rollover" money buys between a third and a half of all farmland in the UK. By increasing the rate of CGT in the budget, Reeves has further incentivised farmers to avoid CGT by rolling over housing development gains into more farmland - thus helping inflate land prices even further beyond what ordinary farmers can avoid."
I’m part of a farming family, I totally agree that the farming protest is not being explained properly. I work on my parents hill farm part time as it can’t afford to support me but my dad 71 needs the help but it’s too much for one person. The economic of farming have been terrible for my whole life (35). My only fear to your argument is ideology. Big business may keep the land prices high. And other forces that are entering the agricultural space. Not to mention tourism keeps lake districts housing prices high pushing out the locals.
This is where regulation is needed, but this is the step in the right direction for the long term. I'm hoping they'll introduce protections for farmers and other forms of production as the other side of this coin to make a real positive difference for society as a whole. We've pandered to wealth for too long in this country, all thanks to Maggie Thatcher (or mostly). The same is true in the US with Reagan. Those two were peas in a pod in terms of their policies that destroyed everything and got us in the mess we're in now.
Brilliant. Thank you for explaining it so straightforwardly. I wish that the Government was making the case, rather than relying on academics to do so. The Government appears to be doing the right thing, but failure to communicate is undermining society’s confidence and allowing emotion to muddy the waters, enabling opportunists to whip up division (Jeremy Clarkson perhaps?).
This all supposes the Government actually knows what it’s doing. Mostly it doesn’t
This is the second video i have watched of this channel and it really helps to fill in those wide gaps of knowledge in a way that is clear and simple to absorb. I just want to keep watching more videos and learning more!
Just fills in gaps with rubbish
Very well put. If the farmers are really intending to pass on their estates to their children, and their children then pass on to their children and so forth, then the cost of the land decreasing shouldn't really matter. The only people who it should matter to are the James Dyson's of this world who have bought up farmland for the sole purpose of dodging tax.
Fantastic explanation!
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes.
In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
If you work very hard using land that is worth millions, yet you only earn a meager economic return. Something is seriously wrong and it’s NOT inheritance tax. Why is the land worth so much yet barely economical for farming? That tells you that land isn’t being valued as a farming asset. It’s valued for something else. One main reason: land is used as a tax avoidance mechanism for the wealthy. They want to buy the land for this purpose, ergo high demand, ergo high price on land. Farmers are barking up the wrong tree. They should be angry at the Jermey Clarkson’s who buy land from farmers as a means to dodge taxes. Yet they are marching alongside Clarkson against taxing him. Farmers are seriously being mislead.
Your points at the end are valid, but farmers will still suffer until land prices fall. They will not fall because Labour also wants to allow houses, wind farms and solar panels on the land, son farmers, in my opinion are going to be deliberately forced off the land. Just watch how food becomes expensive then, fueling inflation, increasing unreliable imports. This government doesn't think that is problematic, but remember how fragile the supply system was during the pandemic.
And at the same time they seem intent on provoking Putin into a major conflict with Europe, ensuring that our global food supply chain becomes ever more precarious.
No criticism of how we got here under 14 years of Tory rule? It was in that time period when agri land became a financial instrument.
_Labour also wants to allow houses, wind farms and solar panels on the land_
We need all three urgently.
And these significantly increase value for society.
Obviously the first one the most with little impact on farming capacity.
I think you have hit the nail on the head. Its a real land grab. Farmers are forced to sell land to pay a bill they cant afford and the government gets the money from the sale.
I actually discussed this with my dad last night who as a 92year old ex farmer (gave up his NFU membership last year) had been watching country file.
Two of my cousins who run a few hundred acres could be the farmers in this scenario though they rent a couple of hundred acres. The rent on land is only about 1% of value. Indeed a local farmer offered this sort of rent for some land I own. Inheritance tax in the past actually broke up the estate that is part of the land that my cousins own, otherwise they would have probably have been tenants like their father and grandfather.
Some of the estate is owned by Duke of Westminster who paid little or no inheritance tax on the death of his father in 2016, thanks to tax avoidance measures. (He’s worth about £9billion). Part of this was the Abbeystead estate used primarily for shooting. In 1915,when Earl Sefton owned it, 8guns made a record of shooting 2,929 grouse in a single day. Yep this was 1915 when my grandfather who should have been working Lord Seftons land was otherwise engaged…
Great point, I would extend that to include housing which is a high paying financial asset rather than just a home.
What you identify with the financialisation of farmland also holds true for housing...
Thanks you changed my veiw.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes.
In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
Clear, concise and well articulated....you have converted this peasant through reasoned logic. If only we had this quality of thinking in the hall's of power. Excellent Richard.
The halls of power have acted in introducing inheritance tax.
You're correct about many of the challenges facing farmers but unfortunately inheritance tax does not fix any of this
A very good video which makes me wonder why the government is so ignorant of the realities of farming that they are not enlightening the farmers of the benefits of the new law, could it have a hidden agenda?
No, it’s bad for food security if farms are sold off for solar farms and housing etc. IHT should only be paid on sale of assets, most farms are worked over the generations by those that know how to manage our countryside.
@@teryd5672n actually solar farms and onshore wind turbines are compatible with farming - solar isnt compatible with cattle or crops but works well with sheep. Indeed these two renewables can tip a non viable farm into viable.
@ I prefer to see solar used on low grade land or buildings. Prefer countryside to look like England.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes.
In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
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It's a good point, not made anywhere else. The economy has been destroyed by the City turning every single asset and commodity into a financial product.
Positive price control at the farm end will see demand for negative price control at the supermarket end.where prices will otherwise soar. Is that likely?
I totally agree with you As a farmer
Great explanation,but unfortunately land prices will not fall as large companies will still use land to offset carbon,plant trees and other environmentally beneficial practices,all worthy causes that will keep land prices high and of course delivering tax breaks for the companies concerned and even subsidies paid to rewild etc.
Land is a finite resource and will always remain a good investment for large corporations with or without inheritance tax,so once a farmer sells land it will always be difficult to buy it back if your relying on producing food to buy it.
I agree. Land prices will not fall due the fact that land is used for building on. With the hundreds of thousands of people who entered the UK. I have watched with horror the amount of building going on and building land was told is making around £1m acre. How true that is I'm not sure. But land will not fall. The old farming saying they are not making anymore of it. I have lived on the same farm for 60 years. I have also seen the prices go up. Rich people invest in land because on the whole that's where they want to live to get away from the city.
Accountants have always given some bad advice in the past to me. Your gut instinct as my father would said is the best factor. If it's to good it's often true. Farmers on the whole are wally old folk as I have found out over the years.
Inheritance tax will kill of farming. Because prices will not go down. I have seen people rich and poor want to live off the land. I'm only happiest on the farm with nature around me.
Just FYI: this is an interesting and well-argued video... that I nearly didn't watch because of the first part of the title (the second part wasn't visible until I clicked on it).
Many years ago I worked for the Milk Marketing Board, MMB as a truck driver visiting farms and dairies all over the UK. At that time the argument was that the MMB had too much control in setting the price of milk with the large dairies having a greater say in its price than the farmers themselves; they wanted to control the price themselves.
Eventually they got their wish, the MMB was disbanded and farmers set up co-operatives to control as they thought, the price of milk. What happened of course was that the co-operatives were outgunned by the large dairies and together with the ever increasing purchasing might of the supermarkets who could obtain milk cheaper from mainland Europe if farmers did not meet their prices per litre here in the UK. They then found that they were in a worse position than back in the days of the MMB which was initially set up to give farmers a fair price for their product.
The saying "be careful for what you wish for" is as ever relevant today regarding inheritance tax as it was back then in the days prior to the MMB being disbanded.
Great video, does anybody know how much farmland in UK is used for financial speculation?
So what you are all seem to be arguing about, is that someone needs to be paying more tax. Well, here’s my observation. I left UK 20 years ago, to live in NZ, which has neither capital gains or inheritance, but now claims it needs at least one. Irrespective, both countries are currently identical: culture wars, health systems are a shit, roads are a mess, education is completely fkd. So I ask myself more tax for what??????? Can you guarantee that something is actually going to improve or is this just more money being taken from those that really work to feed the ever increase demands of bull shit jobs and the establishment.??
Well we need NHS funding increased, for one. Our healthcare working per capita is below par and needs adjusting, if we are to have a service that is fit for purpose.
@@dogblessamerica Imagine if all that plandemic money just went directly to improving the health system.
Wait. It doesn't work because of too little money so let's give it less. Really?
You litterally gave yourself the answer: Both cuntries suffer the same problem, due to lack of funding of public services, and people in both countries are arguing that what is needed is to tax capital gains or inheritance (i.e. Wealth). No one seems to be suggesting "more money being taken from those that really work".
@@dogblessamerica The NHS is a mess, it needs sorting before anymore money is given - its not a Binary Keep it as it is, or sell it off to American insurance companies there is a middle path that needs to be trod -
Personal example a simple ultrasound can be taken and read within 24hrs of it being ordered by a Dr for £40 (NHS lead time 8-12wks), un ultrasound guided steroid injection for £200(NHS waiting time 1 year), are these options highlighted by an over stressed NHS - no, if they were people who could pay im sure would and NHS waiting times would drop dramatically.
Drug purchasing could be done at a national level, leveraging scale to drive value - at the moment its done at best at trust level at worse its at unit level driving purchasing costs up massively.
The orderly that sweeps the ward is paid minimum wage and has been since he was employed in 1985, however there are now 3 levels of management and subcontractor umbrellas between him and his old boss the head of the facilities he now costs the NHS £50 a hour.
this is a great video. i hope it gets more views.
You are exactly correct - family style farming does not make a reasonable return for both the investment and the labour.
Regardless of the structural issues adding inheritance tax to the mix when parents and child/children work the place together for decades is a huge imposition - the parents may have retired a decade before but still be on site when they peg out.
If you want all farms to end up owned by Blackrock inheritance tax is a great way to do it.
Here in Oz we dont have any inheritance tax yet still farmers are plagued by debt loneliness poverty and suicide.
You have missed the point. No IHT means land values rise too high to underpin an economic system. IHT means that wealthy individuals, who have been buying up land in UK solely to avoid paying IHT would not do so, would therefore sell off their land and prices reduce. Ensure that sensible controls on development keep farmland for farming and you start to get the balance coming right. There’s other things as well and this video explains them very well.
@@iambarks2814wealthy individuals have accesses to expensive financial advice that renders them completely safe from IHT though... so who's left to foot the bill in this scenario? those generational farms that aren't rich but are sat on land and lack the means to proof themselves against this kind of taxation....
@@iambarks2814 I think you have missed the point. The value of the land has very little affect on day to day farming of the land. The introduction of inheritance tax is going to force farmers to sell land , making it more available to large companies
@@jimkirkland1344Not sure how comparable this is to farms, but for houses the valuation of land is very regularly the most valuable component. The housing crisis is a byproduct of crazy land valuation as property = (build price * depreciation + land price). What proportion of farm price is land valuation? My thoughts are IHT may in the short term increase prices but on a macro level result in lower prices as farmland is less desirable to own.
Oh my gosh, you make a very well explained point here. 👍
I can see what you mean by the investment industry really messing up farmland values. I remember the days when farmland was really cheap, because it was of little use unless you were going to farm it!
Brilliant, I, (we) need clever people such as yourself who not only understand economics, but also have the ability to explain economics to people who don't. Thank you.
This presentation is brilliant. The government needs to articulate the points made here. There must be a lot of people protesting today who will never be able to afford a farm and are on the minimum wage, mobilised by oligarchs using farms and land as financial instruments to avoid paying tax.
Let's face it, farming labour, like labour in the hospitality industry, has never been a well paid career. To a large extent, that's why non farmers have very little sympathy with the plight of UK farmers, who are admittedly being screwed by the bigger food manufacturers and supermarkets. That's the real problem, farmers aren't being paid anywhere near enough, in many cases, for what they supply, whereas others further down the food chain are making rather nice profits, which can then be passed on to their shareholders, in the form of dividends. Capitalism at its finest, where someone foots the bill for someone else's greed.
When are we going to acknowledge that delaying IHT and charging it and CGT at point of sale the farmers would be protected and the non-farmers would leave immediately.
It would also stop Labour apologists from putting out guff like this.
The last person Farmers need to lead their charge is Jeremy Clarkson. He's not a farmer, he's a grifter.
agree 1000%
He is someone with a voice, if it wasn’t for him no one would be talking about it because the media wouldn’t cover it.
It is corrupt to the core.
@@mrmagoo-i2lYes and he is using his voice to benefit himself and himself alone, he doesn't give a shit about any of the others farmers. Stop acting like he is doing a good thing when he clearly isn't.
@@surprisedtoast649You know him well then?
@@Durnyful I don't need to, Jeremy himself stated that he only bought all the farmland as a means to avoid paying inheritance tax, so no he definitely doesn't care about other farmers who won't be affected at all by this change.
Fantastic explanation. I’ve been trying to unpick this issue for a while now and this was just the video I needed.
Going to save this to post on the ridiculous social media posts on the protests. Thank you for such a great explanation.
What you say is correct, but with out first putting right what is wrong, introducing inheritance tax is plain wrong.
You cannot have watched the video, if you still believe that.
@@EvoraGT430 I watched , maybe you need to rethink your comment.
@@davidallen1418er no
@@Redf322 To understand fully the attack on farming and the food supply you need to know and understand the 20x30 and 20x50 accords that the west have signed up too.
@@EvoraGT430 To understand fully the attack on farming and the food supply you need to know and understand the 20x30 and 20x50 accords that the west have signed up too.
So, to paraphrase your saying, No inheritance tax on farms until the government allows farmers to get a sensible return on their investment/labour.
@@alantyrell41 exactly and in my opinion that's not going to happen,so why's everyone so thrilled about the idea..
That’s not it at all. We still need inheritance tax to close the farm loophole that inflates the value of land. We also need to tackle the issue of farming not actually being a profitably activity.
@@Fireclaws10 But in the meantime that is still going to destroy a LOT of farms for decades as this problem gets ironed out. So it seems to me that the farmers are quite justified in their protest.
By the way... when we get this war that our leaders seem intent on provoking.... British farming will be profitable again.
So where were the protests over the rise of use of farm land as a financial investment a la clarkson under the Tories and the need for an inheritance tax . And given farmers are generally Tory/ reform voters you’d have thought they would free marketeers and protesting for a subsidy FREE industry as in NZ.
@@goodlookinouthomie1757 it isn’t. The BBC did the math, and you can look it up yourself. It’s 117 farms that are worth over £3 million.
I see only one flaw in the argument. You might be right to say that the economic value of the land is zero, but its value for IHT purposes will not be assessed on its economic value, but its market value. So 100 hectares of land might be economically valueless, but commercially, several million pounds, and that's what IHT will be charged on.
Exactly this is the issue. I was thinking I was the only one who had picked up on that aspect of his theory. Yes theoretically if over time the price of land drops, then the numbers of farms who will currently be subject to the IHT will also drop. However there are many market factors that influence the land price and anyone who bought land to avoid IHT under the old rules is not going to want to sell it off cheap and take a loss are they? It is likely to see more trusts start being created the land will remain in the same hands.
All the time the IHT is based on a figure that is largely locked up in the land price this policy will hit disproportionally the farmers who are land rich but cash poor.
Market value is dictated by supply and demand, if the demand goes down because of this IHT loophole getting shut down then in the longer term it will be eventually benefical for them.
@@SessDMC IF the value of land goes down. That is the key question. The closing of the tax loophole should, in theory, reduce future demand by those seeking to benefit from the old IHT reliefs, but all land is already owned. It cannot be created. Much of this land is owned by those who bought it to obtain the relief, and, as @johnstainsby7747 points out above, those who have done this could simply set up a trust to keep the land in perpetuity and rent it out to tenant farmers, so not increasing supply (and so reduce price) at all?
Perhaps the government needs to look at closing yet another tax dodging loophole?
Since the 1930s, the average price of UK farmland per acre has grown by a staggering 17,400 percent, according to a Knight Frank report. In the 1930s, the average price of bare farmland was approximately £40 per acre, which surged to £7,000 per acre in the first quarter of 2021.
Over many decades, Governments have ignored advice, to deal with monopolies. They have been able to use the lack of contol to their advantage and to benefit interested parties. Farmers need less regulation, indeed, I am beginning to wonder if the government should be billed for the paperwork they require.
The voice of reason and common sense - thanks.
Nice to get a detailed and balanced analysis of this, which mainstream media seem to be incapable of providing, all too often.
This guy makes clever arguments.. But in fact its smoke and mirrors and he clearly is also a labour party supporter. Let me tell you what is is really taking place. Firstly you should be aware that there have been massive farmer protests in many parts of the World in recent times.Over 750 Dutch farmers have signed up for a government buy-out scheme, It is part of the Netherlands’ Climate con trick) drive to drastically slash nitrogen emissions. In India, Farmers have been protesting because of drastic law changes.
In the USA, Bill Gates (pure evil) has become the largest land owner and there are Gov attacks on those wishing to grow their own food. So in reality in order for this evil Global agenda to proceed in the UK a different tactic is being used. And this presenters idea that 'new' people can just start farming in comparison to those who have lived on the same land for generations is laughable. Also the farming land at current values will be bought by large global companies that have other intentions for the land or even if not they are skilled enough to avoid future inheritance tax just like all the other tax avoidance schemes they use. Do not be fooled by this guy or the Government.. The intention is to destroy the smaller farms, to force them to sell and the big guys move in. Same with housing.. Banks are buying up properties in unprecedented numbers in the USA and the same thing is now taking place in the UK.The Financial Times reported that the Lloyds group, the UK's biggest mortgage lender, was aiming to buy 50,000 homes by the end of the decade through its Citra Living brand and intends to be your Landlord from now on!. If you dont know the phrase ; You will own nothing and be happy; by now then you are living under a rock. There are countless holes in this presenters analysis and the bottom line is that Farmers will be forced to sell their land to pay inheritance tax..The land price will not collapse as there is an agenda and competitive companies who ultimately are owned or controlled by the same master companies.. such as Black Rock for example.. will ensure the price remains high.. because the plan is to buy out small farms not because of profits or to avoid inheritance tax,, but as part of a Global Agenda. The most powerful people in the World understand that Money is nothing other than a mechanism , a tool for power and control and a way of stealing real world assets. These people want control of the food supply and money will be no object to them. Farmers who dont want to sell are the problem and traitor Starmer is solving that problem for them.
If farm land dropped in price, because "it has no value, as it is not making a return". The banks and lenders are going to shut down a lot of businesses as the security value is out of the financial models.
So either way the current farmers are done. Maybe new entrants can make it work.
how does land make a return? its the crop or cattle ie stock that makes a return.