'Farmers have always been cited by economists as the classic example of an 'asset rich, cash poor' group in society'
The EU does not have a track record in agriculture for getting everything right, but it at least tries to do so for a sector it still views as central to the eurozone economy and European society.
To that end it is in the process of forging a new plan for the CAP, based around a lighter touch on regulation. From outride the EU, with past and present governments that have little interest in agriculture – other than as a vehicle for green ambitions – we can only look at such interest with envy. Instead we are locked in a downward spiral of political disinterest locally and nationally in what was once a key industry and should be again.
One challenge the EU is unlikely to get right in its review of the CAP is what it describes as 'generational change'. This is the time bomb under the industry of the average age of farmers being that at which most people would be retiring.
Over the years various policies, through rural development, have been implemented to tackle this. Some have been bold, particularly in Ireland with retirement and new entrant schemes, but in the league table of efforts the UK was always close to the bottom. That has not changed with Brexit. To be fair this is not a uniquely UK or European problem, in that in all developed agricultural economies a sound solution remains elusive.
This has had one faint positive. It has eased the pressure of past generations for the children of farmers to become farmers, whether or not it was a lifestyle they wanted. However for agriculture and the economy it is a major frustration. Come the budget at the end of October, if rumours are right, there is a chance it could get even worse.
We know the new Labour government is making much of the £20 billion public finances black hole left by the Conservatives. They deny this, but it is clear that with yet another month of stagnant growth there is a problem to be tackled in the Chancellor's financial statement. With a pre-election pledge not to raise basic tax rates, VAT or National Insurance the government is looking to other potential tax rises and spending cuts, at least in part to fund the list of public sector pay rises it has agreed.
This was highlighted by the Matt cartoon in the Telegraph, with Robin Hood robbing pensioners – via the cut to the winter fuel payment- to hand the money to already well paid train drivers. This is politically sensitive, but when a government has an historically massive majority there are no checks and balances from the opposition or within its own party.
One potential target being debated is inheritance tax and it is very definitely in the firing line. The tax take is the product of inflation in the value of all assets, but in particular property and land. This is the tax that led to many great houses being handed to the National Trust over decades because assets rich cash poor members of the landed gentry enjoyed life to the full and set nothing aside for future taxes.
One of the big questions is whether agricultural property relief could be a target. This was introduced to facilitate generational change in farming, long before that term or the EU came into being. It has made agricultural land attractive as an investment to minimise tax liabilities, helping create and maintain the success of agricultural tenancies.
It used to be said that inheritance tax was almost a voluntary tax, because of the exemption level. But mix lack of change to tax thresholds and inflation and even estates with little more than a family home are liable for tax. It is an obvious target for the Chancellor and having seen down pensioners a relatively easy one. The farming lobby is worried it could in some way be brought into the equation. It is unlikely to be eliminated, but a tapering element could emerge.
When it comes to the inevitability of 'death and taxes'
Making that worse through tax changes sold to society as a way to 'make the rich pay more' would worsen food security and make the age profile in agriculture worse, assuming this government has sufficient interest in farming to follow the EU lead on the importance of securing generational change.
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