Cheshire East Conservatives are raising the plight of Britain’s smaller Family Farms, following the devastating blow delivered by Labour Chancellor, Rachel Reeves in her first Budget. The Group’s concerns are summarised in a formal ‘Notice of Motion’ that will be delivered to the Full Council Meeting of Cheshire East Council on 11th December.
Cllr Janet Clowes (Wybunbury Ward) who is proposing the Motion, stated:
“Cheshire is epitomised by its rural landscape and agricultural economy. It’s what attracts people to our county to live and work and provides Cheshire East with a thriving rural economy. Smaller family farms are an iconic feature of that same landscape, many of which are multi-generational and provide good land husbandry as well as contributing to essential food security. The Chancellor’s inheritance tax has been poorly thought through, with the result that the ability of these farms to remain viable will be seriously undermined”.
Cllr Alison Heler (Haslington) agreed saying;
“I’m Cheshire born and bred, from a family that has been involved in farming for generations. Rachel Reeves has received poor advice on this issue and research from organisations like the NFU and CLA have made it clear that a far higher number of Family Farms will be affected than Ms Reeves is suggesting.
As Councillors we have a duty to support and protect our borough and our small-farm landscape is an essential part of that responsibility.”
The Notice of Motion is set out below:
Protecting Family Farms and Preserving Rural Communities across Cheshire East.
This Council notes with concern, the proposed changes to inheritance tax announced by the Labour Government in the recent Autumn budget, which would scrap Agricultural Property Relief (APR)and Business Property Relief (BPR) on farmland and business assets.
This means an effective tax rate of 20% on agricultural assets valued over £1 million.
Whilst the government claims that the new £1m threshold will mean three-quarters of farms will not be impacted by the change, the NFU believes this is an underestimate and that at least 50% of all working farms may be impacted by the new tax rules.
Secretary of State for the Department of Environment, Food and Rural Affairs Steve Reed has stated that already struggling farmers will have to “do more with less”. At a time when many farmers in Cheshire are struggling with soaring costs and energy prices, this tax rise will threaten the future of their farms and destroy confidence in the agricultural community.
APR and BPR have been pivotal in allowing British family farms to remain intact across generations, supporting food security, sustaining rural communities, and aiding environmental stewardship.
The Family Farm is an important feature of the Cheshire countryside and this form of agricultural unit is recognised in Cheshire East Council’s own Rural Strategy (2022 – 2027) that states;
“There is real economic value in the area’s natural capital and landscape character, and the contribution of farming and land management should not be underestimated or forgotten. It is after all, what underpins our rural character, environment and communities, contributing to our ‘quality of place’, which is accepted as an economic attribute, supporting locational decisions and investment in the area”(1)
Unfortunately, despite government assurances that “small farms” won’t be affected, recent analysis identifies that this tax is estimated to impact over 70,000(2) family farms, leaving the average farming family with a tax bill of at least £240,000(3).
Whilst family farms may be asset-rich in terms of workable land and/or buildings, annual profits are modest.
A typical 200-acre arable farm owned by an individual with an annual profit of £27,300 would face a £370,000 IHT liability. If spread over 10 years, this represents 136% of their profit each year to cover the tax bill. At current land prices, successors would have to sell 16% of their land.(4)
In short, this policy compromises the viability of family farms, will force many to sell portions of their land, or close entirely, paving the way for corporate ownership over family ownership.
The Council believes that this tax will have severe impacts on:
1. Food Security: Selling off land or closing farms will put our national food independence at risk, at a time when global stability is already fragile. British family farms are critical to ensuring a steady supply of homegrown food.
2. Rural Community Stability: Family farms are the foundation of rural Britain and represent the majority of farms across the borough of Cheshire East. They contribute to local jobs, schools, and essential services. Labour’s proposed tax risks destabilising communities, eroding the rural way of life, and causing a negative ripple effect across the countryside.
3. Environmental Stewardship: Farms cover 70% of the UK’s land, with family farms playing a leading role in nature recovery, biodiversity, and sustainable land management. The sale and fragmentation of these lands would hinder conservation efforts and undermine environmental initiatives.
This Council resolves to:
• Oppose the Labour Government’s changes to inheritance tax affecting family farms.
• Advocate for the exemption of family farms to preserve the UK's food security, rural communities, and environmental initiatives.
• That the appropriate service committee(s) proactively engage with local farmers and community representatives, to consider what support this Council may reasonably provide tothis essential part of the Cheshire East economy.
This Council urges all Councillors to stand with Britain’s family farms, to support our rural communities, the Cheshire East “Quality of Place” and to protect the environment by formally rejecting this proposed “family farm tax.”
References:
1. Cheshire East Rural Action Plan (2022-2026): https://moderngov.cheshireeast.gov.uk/ecminutes/documents/s97674/Rural%20Action%20Plan%202022.pdf
2. CLA 12.11.2024 ‘Family farm tax’ could leave hard-pressed farmers paying tax bills that wipe out their annual profits • CLA
3. CLA 2024 October https://www.cla.org.uk/news/help-the-cla-save-your-family-business/
4. AHDB 2024 October https://ahdb.org.uk/news/ahdb-response-to-budget-2024
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