An angry backlash greeted the farming minister at this year’s Egg & Poultry Industry Conference in Newport.
Daniel Zeichner addressed delegates at the 57th EPIC, but faced a hostile reception from some in the audience.
Speaking a fortnight after the announcement farming assets worth more than £1m will now be liable for 20% inheritance tax (IHT), the minister was told by Tom Bradshaw, president of the NFU, it was a badly thought through policy that would have unintended consequences.
“The atmosphere in our industry is visceral,” said Bradshaw, opening the conference on 11 November. His voice at points shaking with emotion, he continued: “The feeling of betrayal is something I have never experienced before. The damage that has been done with the budget will take a huge amount of time for our industry to get over.”
Bradshaw highlighted the commitments made by the Labour party in its election manifesto about food security and said these policies would harm those goals.
“In May 2023, Kier Starmer said he wanted a new partnership countryside based on partnership and respect. Today, we are questioning whether they meant anything to him.
“This is really difficult. I want to work in partnership, but I am wondering if the government really understands farming.”
Zeichner, the minister for food security and rural affairs, spoke next and acknowledged the backlash. “Tom Bradshaw is a very serious person and I take what he says seriously,” he said. “But there are a range of views on how these measures will work out and it is a really complicated situation.”
He said public services needed to be funded and urged farmers to “look at the details”. He also said only 462 people claimed agricultural property relief (APR) last year and said the advice he had been given was that the effect would be minimal, especially with appropriate succession planning.
“I also just need to point out that the chancellor had to mend the public finances because the country could not go on as it was.”
Anger
In a fiery question and answer session, poultry business owner James Hook challenged Zeichner on the tax changes, describing them as an “earth shattering blow”.
Hook, whose enterprises are involved in 50% of the UK’s chicken and turkey production, said he was even having discussions about whether it was worth continuing in business.
“I am an angry farmer,” he said. “I don’t think you realise what you have done. I think you’ve got away far too lightly. This is a mess.”
“I hear what you say,” said Zeichner. “I recognise the passion and discontent. The mess is what we inherited from the last government.”
Jonty Hay was another broiler business owner dismayed at the policy. “You have got this all about face. Family farms are on a knife edge all the time. It all needs to be rethought out.” Implementing the policy would lead to a reduction in UK food production, he said. “Your food security won’t be here, we are going to be importing a lot. Your legacy is we won’t be here.”
But Zeichner argued the exemption on inheritance tax was being abused by some. “There are people who come in and buy land for purposes of tax evasion and that is quite clearly going on.”
He also said there were other potential benefits. I’m afraid I do see people who are farming late into their 70s and 80s and it is very difficult to have conversations about how to pass it on, and one thing that could come from this discussion is more of those discussions.
“Another passion I have is generational change and getting people in, and that could be a consequence of that discussion.”
Poultry industry effect
He faced further challenge from Gary Ford, PR and policy advisor at BFREPA, who warned the tax changes would disproportionately affect the poultry industry, which tends to have high value housing and equipment but not necessarily large areas of land that could be sold to fund a tax bill.
“This is a big dilemma for farming businesses,” said Ford. “I spoke to a shed fabricator and he said a number of farmers have already cancelled order because of the budget. All businesses need confidence. This has ripped the guts out of the industry from a confidence point of view.”
Zeichner responded: “I hear your points about inheritance tax. I’m not a tax lawyer. Paul Johnson of the IFS said in his view the impact would not be great. I would ask people to look at the detail. People who have done that are left much more reassured.
“I genuinely think the chancellor had to fix the country’s finances. In the last decade living standards have been absolutely static.”
Away from controversy about the budget, Zeichner told the delegates how the government planned to support the industry.
“Thank you and all the people who work in your industry for the endless efforts to make and produced the highest quality British poultry meat and eggs,” he said.
Zeichner referenced his previous role as a shadow minister for the last parliament “I had the opportunity to meet many of you to be briefed to do some of the awards events and generally I feel I’ve got to know a lot of people, but you are the experts. I recognise it has been a very difficult few years during the pandemic, throughout the rise in feed energy costs linked to Russia has been difficult. But there is a general sense is the industry is starting to recover and some of the challenges we know are dissipating.
He said he understood the threat posed by avian influenza. “I can reassure you is that lessons from the previous outbreaks ready and prepared to deal with whatever is coming.”
He added the government was determined the industry would not face unfair competition from imports of eggs and poultrymeat without the same animal welfare standards. “That will underpin any trade deal we negotiate.”
On planning, Zeichner made a clear commitment that the government would help clear the obstacles currently stopping farming businesses from expanding. The planning system has proved a huge obstacle for businesses, and Zeichner said that would change.
Consumers, he said, had expectations that food would be “cheap, they want it to be produced to the highest standards, they want more and they don’t want to allow any land to be given over to do it.
“That is not resolvable,” he said. “One of the things a newly elected government with a big majority can do is face up to some of those really difficult decisions. As it with the public finance, so it is with planning.
“We are going to have to face down those people who will say to us we do not want to see further production facilities. Because we need to feed our country. And that is what we are going to do.”