Kent Farms "Threatened"

Changes to inheritance tax rules announced in the autumn budget have sent shock waves through Kent’s farming community.

Vaudeville performer Will Rogers, who was brought up on a ranch in Oologah, Oklahoma, once said the “the farmer has to be an optimist or he wouldn’t be still be a farmer”.

One can understand the sentiment. Farming has always been a hostage to an enormous range of factors, largely out of its control. The weather, the economy, disease, government and laws are chief among them.

Speak to farmers in the rural swathes of the “Garden of England”, there is precious little in the way of optimism these days. Sudden fear and perhaps a little panic might be more appropriate.

The Chancellor of the Exchequer Rachel Reeves stands accused of upending the agriculture sector with reforms to the inheritance tax system which once allowed farming families to pass their land and buildings to their offspring without punitive charges.

Now farms will need to pay a tax rate of 20% of agricultural assets, both land and property, valued over £1million. Although the Government has said the reforms will only affect 2,000 estates each year, with small farms unimpacted.

But, speaking to farm owners, there is a feeling the new Labour administration neither understands nor cares about farming or farmers; for their role in the rural community; the family ties and traditions or their respect for the countryside.

Farmers are pragmatic, unsentimental and stoic at the best of times. They tend to lean towards the Conservative Party, speak their minds and stick together.

But this new tax seems to have sent a real shiver through the industry with grim realisations that farms may have to sell up and face the uncertainties of the future.

One senses this is perceived as being as bad as foot and mouth, mad cow disease or the post-Brexit upheavals with talk already of the dire consequences on mental health.

Michael Sargent, 71, grew up on a farm in Norfolk but met his future wife Rosemary at Wye College. (Couple pictured below)

He moved into her father’s White House Farm, near Biddenden, where there are now three generations living.

The family has 196 acres, rents 300 more, and makes its money from selling milk from 210 pedigree Jersey cows, a herd started in 1963 with just two beasts from Ashford market.

Today, the farm employs very expensive, milking ‘robots’ which cost the guts of £100,000 each while another unmanned craft worth £15,000 bowls up and down the byre’s outer edges nudging back in place feed displaced by the cows’ noses.

It’s a time-saving godsend but might just increase the value of the asset now at risk.

Depending on the HMRC’s district valuer’s assessment, the inheritance tax bill could be as high as £800,000.

“I haven’t got that sort of money, have you?, Mr Sargent says. “It’s a very uncertain time for farming. Not sure the government knows what the changes might mean for us.

“Looking at it, if me and Rosemary did ourselves in, it would solve the problem. I’m not saying I would do it, but you can see it happening.”

It’s a very real concern with reports of one farmer in South Yorkshire taking their own life in the days leading up to the Budget.

Mr Sargent’s son Peter, a 40-year-old father-of-two, speaks enthusiastically about the success of the business over the generations but fears much of Kent’s farmland, including his own, will end up under houses or massive tracts of solar panels.

“Where is the food going to come from, then?,” he asks, “There is so much global instability around food and we need to be producing as much of it as we can. It’s a fragile world.

“But farmers are being backed into a situation of either we sell up or sell the land to pay the tax but be left with an unviable business or have an unserviceable debt on a small profit margin. Most won’t be able to.

“This will rip out the heart of Kent and rural England.”

The National Farmers’ Union (NFU) says the Treasury claims that 73% of farms will be unaffected by the £1million agricultural property relief threshold.

But the Department for Environment, Food and Rural Affair’s own figures show that only 34% of farms are worth under £1million.

Conservative county councillor for Sandwich, Sue Chandler has been in and around farming all her life. Like Mr Sargent she hails from Norfolk rural stock and she too met her husband at agricultural college.

Two generations run the family fruit, livestock and arable business not far from the village of Ash and has been in the same hands since the last war.

“There is a considerable amount of apprehension,” Cllr Chandler says. “There is, in theory, a period of consultation and, as always, the devil is going to be in the detail.

“Farming is a long-term business and if you don’t know what’s going to happen, are you going to invest in it?”

“Land, for farmers, is their working capital. It will depend very much on the (HMRC) district valuers’ involvement in the calculation for inheritance tax.

But in Kent, if the farm is anywhere near a sizeable population, the land may increase in value because of the potential for development.

Cllr Chandler branded it a “tax-raising ploy” which she says is unlikely to raise the government the kind of tax they think it will because, she adds, “they haven’t done their homework”.

“The government doesn’t understand farming or farmers,” the county councillor continued. “Even the government departments can’t agree – they haven’t even done the basics.

“Most of the MPs in this current government come from an urban background, rather than rural areas. But they should care and should care very much in terms of food sustainability, the rural economy and rural communities.”

When Katie Lam was selected as a Conservative candidate to be the first MP for the new constituency of the Weald of Kent in July, she readily admits she knew little of rural ways.

Well, she does now and she’s on a mission, facing in opposition farming’s biggest crisis since entire herds of cattle were put down and burnt in massive fire pits and pyres during the foot and mouth outbreak of 2001.

The outlook for her constituents is existential, she says.

Standing by the milking shed at the Sargents’ farm, the MP goes on: “If this ends up meaning that entire farms are sold off to generate cash what will come in their place will either be some sort of mega-farm agricultural complex or lots and lots of houses in inappropriate places.

“The huge risk is that when it’s gone you can’t get it back, you can’t recreate that.

“It has taken 50 years to build up the herd here on the Sargents’ farm and a thousand years to build up the Kentish farming landscape. The way of life here is as old as the Magna Carta.

“The nature of this constituency is that it is entirely built on agriculture and woven into how we live.”

The Country Land and Business Association (CLA) says sold-off farms will end up in the lands of huge corporations buying carbon offsets, lifestyle buyers or local authorities hungry for land supply for development.

South-east regional director Tim Bamford, says: “Environmental charities may also step in, using the land for ecosystem services, biodiversity projects, and new habitats. Unlike farmers, they’ll face no inheritance tax.

“We know from experience that all these options can lead to responsible land stewardship. But each risks breaking the vital link between the land and those who know it best – those who live and work on it every day.”

NFU President Tom Bradshaw said fruit growers are going to feel hit hard and the £1million threshold is nowhere near enough to match the sector’s high capital investment in refrigeration and pack houses.

Mr Bradshaw says: “Businesses had no chance to prepare. The government will have to realise they’ve got this wrong.”

The NFU argues that few viable farms are worth under £1million.

Addressing fruit growers in Kent the other day, Mr Bradshaw told them: “The government needs to know, from all of you, that they do have a fight on their hands. Make sure your MPs know what this means for you, your family and your business.

“The only way they will recognise they have got this wrong is through a groundswell of support right across the UK, that makes them think again.

“The public are incredibly supportive of what we’re doing in this country and they want access to more British food, and you want to supply more British food.”

According to the government website, Chancellor Rachel Reeves announced on October 30 agriculture property relief (APR) will be reformed, 100% tax-free inheritance tax relief is to be restricted to the first £1million of farm property assets.

Above this amount, landowners will pay inheritance tax at a reduced rate of 20%, rather than the standard 40%, which can be paid in instalments interest free over 10 years.

The website adds: “This is on top of all the other spousal exemptions and nil-rate bands that people can access for inheritance tax too. This means that two people with farmland, depending on their circumstances, can pass on up to £3 million without paying any inheritance tax.”

The government claims the present system allows the top 7% to account for 40% of relief.

It adds “It is not fair for a very small number of claimants each year to claim such a significant amount of relief, when this money could better be used to fund our public services.”

Guy and Claire Eckley’s 1,200 acre arable farm, near Staplehurst, produces wheat, rapeseed and beans. One of their two children wants to be a farmer, the other doesn’t.

How can they pass on the business without being clobbered by the new tax?

“Don’t know yet,” says Mrs Eckley. “But I do know it’s going to be complicated.

“The sad thing is that my son who is not really interested in farming will have to play a role to allow the other to follow us into farming.

“It feels a bit unfair that if you have more than one child it ends up putting pressure on them and you. But farmers should not be making hasty decisions, in my view.

“The other thing is that this is not law – there should be time for the threshold to be raised or a find a phased introduction or more agreeable terms for paying the tax.

“The government has probably not thought out the changes to the landscape from the perspective of environmental protection – after all in Kent 70% of the land is managed by farmers and that means there is potential for real change.

“A lot of farmers are finding themselves at a real disadvantage because this is due to come in in April. There is going to be a lot of solicitors’ appointments between now and then.”

On a freezing November morning, a 35-acre field just outside Woodnesborough, near Sandwich, is banked under a veil of mist and drowning in dew.
Colin Tearle (pictured below), now 77 but still going strong, trudges up the tractor track with a stick and takes in the view.



There is a buzzard mewing overhead somewhere, goldfinches busy themselves on fluffy thistle tops and a pair of ring-necked parakeets dash past enthusiastically.

Mr Tearle, once a Conservative district councillor, is instantly fascinated by the latter.

“Well, I’ll be blowed,” he says pointing skywards with his stick, “never seen them before”.

He was born in his grandmother’s house down the road in Denton and has farmed for nearly 50 years and watched the changes in agriculture with a mix of interest and admiration.

Today, he reckons agriculture is more like a science aimed at high yields at the lowest cost without reducing quality or welfare. Much of the pricing is driven by profit-driven supermarkets and consumers who need cheaper groceries.

“The days of straw-sucking yokels leaning on a five-bar gate are long gone,” says Mr Tearle. “It’s not Lark Rise to Candleford, you know.”

In recent years he has dispensed with cattle and concentrates on maize production to be converted by bio-digestion into methane for fuel.

He says: “What is not understood by the average person is the long-term cycle of farming.

“For maize, it’s 15-18 months before you see the return. It takes even longer to build a livestock herd with very careful management.

“These idiots in London don’t know any of this.”

Mr Tearle fears the inheritance tax will split farming families asunder and the parents’ knowledge passed on to their children lost when the asset is sold.

“On paper, some farmers look on paper like they are multi-millionaires but they’re not,” he says.

“Farms are asset rich but cash poor. The farms will be lost to massive investment companies who have no interest in or involvement with the local communities.

“Are they going to be the chairman of the local parish council, a school governor or a volunteer at the local fete or give up their time to the church? Of course not.

“All that is at risk if you drive local families off the farms. It will lead to the destruction of local farming communities across the land.”

At 77, Mr Tearle, who does not own enough assets to be troubled by the new Labour tax, only farms because it is his way of life, something to do in “retirement”.

And then he says: “The best crop a farmer can plant is concrete. There’s nothing that gets the same return as selling for development.

“The trouble is when it’s gone, you’ll never get it back again.”