Good news about the Family Farm Tax

Farmers have been complaining for some time that the price of farmland has lost any connection with the income that be derived from farming it. And The Agri Brigade column in the new Private Eye suggests they have a strong case:

Average UK farmland prices have more than quadrupled this century, from just under £2,000 an acre to well over £8,000 an acre, according to statistics from land agents Savills. 

Over that time, farm profitability has remained poor, but farmland's IHT-free status drew many ultra-high-net-worth individuals into buying land as a convenient way of minimising their tax liabilities – the so-called "Jeremy Clarkson effect". 

By doing so, these buyers pushed up the price of farmland way beyond what many ordinary farmers can afford to pay for it (UK farmland prices are four times higher than those in France, for example).

For this reason, I argued back in January that it was the lack of inheritance tax on farmland that had caused causing farmers' problems.

But now, from the same Eye column, comes good news:

Evidence is emerging that the controversial withdrawal of 100 per cent Inheritance tax [IHT] relief on farmland is having the intended effects of cooling a previously overheated market and deterring those who are more interested in minimising their tax bill than producing food. ...

In 2025, the proportion of farmland bought by what Strutt & Parker describes as "lifestyle buyers" fell to 11 per cent down from 16 per cent the year before. At the same time, the proportion of farms bought by farmers rose to a seven-year high of 59 per cent. 

During 2025, the Knight Frank Farmland Index showed that bare agricultural land sold in England and Wales fell by an average of 5 per cent, the first time since 2017 that prices had fallen this much over a 12 month period.

The Eye speculates that, because they tend to represent the interests of their wealthier members, the National Farmers Union and the Country Land and Business Association (formerly the Country Landowners Association) will continue to campaign against inheritance tax on farmland.

But I hope we Liberal Democrats will quietly drop our campaign against what, strangely, we called the "Family Farm Tax".

The Joy of Six 1551

 Vince Cable makes the case for building more council houses: "The most compelling argument for councils becoming developers is that the private developer model, however valid for most housebuilding most of the time, depends on a set of circumstances – the ability to earn a profit margin above rising land and property prices – which may not exist. Public sector developers can build through economic cycles and where market conditions are unattractive for private developers."

"Changes in public spaces (including increased provision of green parks, lakes and water fountains) enable easy public access to cooling. Everyday heat adaptation is not only about technological fixes, but about building or redesigning everyday infrastructures that enable a fair and equitable living environment for everybody, whatever the weather." Subina Shrestha and Claire Hoolohan on what Britain must do to prepare for future heatwaves.

Mark Braund looks at Andy Burnham's past support of a land value tax.

"Three Lions has started to to more harm than good. I think that 'thirty years of hurt' line has helped seed a sense of entitlement, a baked-in belief that anything other than outright victory legitimises a sense of hurt. It raises the stakes and ratchets up the pressure – a pressure that ultimately bears down on the very players you're counting on to try and deliver a result." Pete Paphides says it's time to say thank you and goodbye to the song Three Lions.

"The final prisoners left Crumlin Road Gaol in 1996 and, in 2012, it reopened as a visitor attraction and conference centre, sharing the grounds with McConnell’s whisky distillery. Although the prison experience is now dominated by atmospheric lighting, holographic presentations and short information videos, it is possible to see the history behind the modern technology." Angela Buckley experiences the Crumlin Road Gaol Experience.

Jeremy Rees celebrates the magnificent Queenie Watts.

"The rich man in his castle, The poor man at his gate"

Embed from Getty Images

James Hawse's The Shortest History of Ireland reveals that the hymn All Things Bright and Beautiful, with its notorious verse

The rich man in his castle,
The poor man at his gate,
God made them, high or lowly,
And ordered their estate.

was written by Cecil Frances Alexander, the wife of the Anglican Archbishop of Armagh, in Donegal at the height of the Irish famine.

At one of my first meetings as a councillor, Harborough was asked to make its response to the Thatcher government's proposed Community Charge, which was to be universally called the Poll Tax.

It's forgotten now, but the government's original proposal was that the Poll Tax should be phased in over 10 years. If they had kept to that, they might have got away with it. But Harborough was one of many Conservative-run authorities that was so enamoured of the new tax that they wanted it brought in at once.

I remember the debate: you could see the pound signs in some Tory councillors' eyes as they calculated how much the Poll Tax would save them and their neighbours.

In my own contribution, I used some of the approved clichés of the day, calling the proposal "a Robin Hood tax in reverse" and complaining that "the rich man in his castle will pay the same as the poor man at his gate".

One of the later speakers in the debate was Tim Brooks, a Tory and the owner of Wistow Hall. Rather painedly, he pointed out that owning a great house brought with it great expenses.

Anyway, the Conservatives made the mistake of listening to their rank-and file and brought in the Poll Tax at once. Among the consequences of this decision was the fall of Margaret Thatcher. 

The myth that Labour's tax policies lost them the 1992 election

Why did John Major win the 1992 election when most pundits expected Neil Kinnock's Labour Party to be the victors?

Immediately after the contest, a consensus developed that the reason was the effectiveness of the Conservatives' campaign against Labour's economic policies. This view was certainly advanced by the Tories themselves, as its acceptance would make Labour more timid about challenging Thatcherite economics in future. 

And it was advanced by the head of the Tory campaign, Chris Patten, perhaps as a way of burnishing his reputation and consoling himself after he lost his own seat of Bath to the Liberal Democrats.

But I have always doubted this explanation. I remember thinking that it did not chime with what I had heard during the campaign from voters or from colleagues at work.

I recently came across an article that suggests I was right to be sceptical. In May 1994 the Independent published an article by Anthony Heath, Roger Jowell and John Curtice on the findings of their study of the 1992 election.

They go through the various explanations that had been offered for Labour's defeat and find them all wanting – notably the claim that "It's The Sun Wot Won It" made by, you guessed it, The Sun itself.

Here are Heath et al. on the suggestion that it was Labour's tax policies that had been decisive:

Labour's proposals for taxation and national insurance contributions – outlined in John Smith's 'alternative Budget' – were relentlessly attacked by the Conservatives. Faced with the prospect of a cut in their disposable income, the argument runs, voters had second thoughts about the wisdom of letting Labour in.

But our surveys find little evidence to back this argument. It arose because the polls showed a small Labour lead throughout a campaign in which taxation was one of the dominant issues and yet the Tories won. Our research, however, confirms that the pollsters had it wrong all along: they consistently underestimated the Tory vote. The Conservatives were ahead throughout the campaign. 

There was a late swing, but far too small to account for Labour's defeat. And the people who deserted Labour were not particularly averse to high taxation; rather, they seemed to have relatively little faith in Labour's ability to improve services such as health and education.

In fact, the authors find nothing in the 1992 election campaign had much of an effect on the final outcome.

I did receive intimations that there had been a late swing to the Tories. During the campaign, I'd heard stories of Liberal Democrat workers putting money on Nick Harvey gaining North Devon with a large majority, when ultimately he gained it with a small one. 

And I was told to put money on the Lib Dems in Falmouth and Camborne, because Sebastian Coe was going down very badly there. Luckily I didn't, because Coe held the seat for the Tories. He lost to Labour in 1997 and the Lib Dems finally took it in 2005.

My own theory was that voters had chosen John Major over Neil Kinnock. After Margaret Thatcher's late Sturm und Drang years, Major was a breath of fresh air. Those who only know of him as a figure of fun may be surprised at this, but if they study his statesmanlike conduct since losing power they may see why people found him attractive in 1992.

Neil Kinnock, by contrast, had been leader of the opposition for nine years. Some of the attacks on him as a "Welsh windbag" bordered on the racist, but, boy, he did talk a lot. And, burdened by cares of leadership, he had lost the wit and sparkle that had made his name as a backbench MP – notably on Jimmy Young's Radio 2 programme.

So that's why I didn't believe in 1992 that the Tories' attacks on Labour's tax policies had won them the election. And, going by Heath et al.'s study, I was right not to believe what became the received wisdom on that contest.

This question is not just of historical interest. Rachel Reeves's pledge not to increase income tax, national insurance or VAT, which has backed her into such a corner, was made because of a more or less conscious memory of 1992.

For Central Bylines: Ed Davey takes aim at the unpatriotic right

I have a new article on Central Bylines this morning:

People on the left tend to be uneasy about patriotism – the last refuge of the scoundrel and all that – but it’s remarkable how many right-wing politicians and commentators give every impression of disliking their own country. They hanker after the fake past they see online in AI images, but have little love for the country as it really was or is.

I wrote this before Ed Davey decided that Nigel Farage is right about badgers being woke and we have to have Churchill on our banknotes.

The Joy of Six 1468

"By-elections follow their own logic, not Westminster narratives, and Gorton and Denton has all the makings of a classic contest - a divided seat, polarising candidates and four different parties with a credible local claim. ... Gorton and Denton is a bit of a Frankenstein’s monster, formed ahead of the last general election when remnants of the abolished Manchester Gorton seat were stitched onto a chunk of the also abolished Denton and Reddish seat ... with Burnage ward, formerly in Manchester Withington, chucked on at the South West edge for good measure." Rob Ford marks your card for the coming by-election.

Mental Health Cop is not impressed by the new white paper on police reform: "It’s rather spectacular in all the wrong kinds of way because it misses rather a lot of important points, it plays undergraduate essay games with what policing actually is and what the public want it to be, and yes: it touches upon mental health as it’s primary example of the police doing non-police things which need to be cleared out of the way so they can 'fight crime and catch criminals'."

Miranda Sheild Johansson on how abolishing its wealth tax changed Sweden for the worse.

"Maybe 10 or 15 years ago, MOOCs (“Massive Open Online Courses”) were the exciting new technology that would revolutionize education – and perhaps even kill off the university as we knew it. With a MOOC, a single star lecturer would give the definitive course on topic X, and students everywhere would learn from the MOOC. Why replicate thousands of near-identical versions of Biology 101, each taught by a local lesser light, when students could all tune in to a masterpiece by the best instructor in the world?" Stephen Heard asks what happened to MOOCs.

James Kenney examines a favourite film in depth: "Breaking Away – a film that runs well under two hours and yet feels fuller than most contemporary movies – doesn’t linger, nor does it inflate moments to announce their importance. Themes aren’t announced in heavy-handed speeches. It moves generously and with grace through characters in motion and leaves them alive in our minds long after it ends."

"The chancel glows in green and gold, its walls painted with stylised flowers and leaves. The decoration, if overwhelming, also does an excellent job of defining the chancel as the most sacred space." Philip Wilkinson visit Wilmcote and its 19th-century Gothic Revival church. 

Lord Bonkers' Diary: The Duke of Buccleuch is pretty chuffed too

The new Liberator has dropped – you can download issue 433 free of charge from the magazine's website – which means it's time to start another week in the company of the doyen of Liberal Democrat peers.

I worry about the Well-Behaved Orphans: their lives aren't all holidays at Lord Bonkers' favourite Cornish resort Trescothick Bay.

Monday

Having risen early, I spy a party of Well-Behaved Orphans trudging across the muddy fields. Christmas is not a hectic time on the old estate like the potato harvest is, but there will still be work for them to do. It is gratifying that the Liberal Democrats have endorsed my ‘Farm First’ scheme as a model all should follow. 

Equally, as someone who comes from an ancient family and owns many farms, I am delighted that our opposition to the ‘Family Farm Tax’ has borne fruit. I hear on the aristocratic grapevine that the Duke of Buccleuch is pretty chuffed too.

Lord Bonkers was Liberal MP for Rutland South West 1906-10.

It's the lack of taxes on land that's causing small farmers a problem

I used to believe that the most damaging intellectual errors were essentialism and reification. These days I'm inclined to think that alliteration trumps them both.

Over the holidays I saw two Liberal Democrat MPs calling for the total abolition of the "Family Farm Tax" or the "Unfair Family Farm Tax". And the Welsh Lib Dems have just called for that too.

Here's David Chadwick, the Lib Dem MP for Brecon, Radnor and Cwm Tawe, quoted in the Abergavenny Chronicle:

"The Liberal Democrats were the first to call out and oppose the unfair family farm tax in last year's budget and we have been proud to stand alongside our Welsh farming communities to campaign against it ever since."

"This is about fairness and security, if we undermine Welsh farming, then we also undermine our ability to provide the country with the food we need to keep us secure in an uncertain world and to build a healthy nation.

"Despite this welcome change, many Welsh family farms will still find themselves crippled, with incomes barely at minimum wage levels. The Liberal Democrats still believe this unfair tax should be scrapped in full and will be submitting amendments in the new year to try to do so."

 David puts his finger on farmers' central complaint. It's that the value of farmland has lost all connection with the income that can be derived from it. This means that small farms fear they would have to sell land or buildings to pay inheritance tax, though even before the government's recent concessions, farmers had been granted significant exemptions.

But why has the value of farmland loss any connection with farm incomes? The answer is that the generous treatment of landholdings in recent decades has led to land being used as a tax shelter. So it's the absence of inheritance or other taxes on land that has caused the problem farmers most complain about.

Here's Bio-Waste Spreader in the new Private Eye:

Has the government really "climbed down" or "U-turned", as opposition parties claim? The tax was never intended to raise much revenue (about £500m per annum) but instead act as a deterrent to ultra-high net worth individuals (think James Dyson and Jeremy Clarkson) buying farmland because it was exempt from IHT [Inheritance Tax]. 

On farmland estates where the net worth of more than £2.5m, a 20 per cent IHT charge will continue to apply from April (the Treasury estimates that raising the tax threshold will only cost the government about £130m). So the ending of farmland's exemption from IHT will help deter super wealthy individuals from driving up prices to the point where real farmers can't afford to buy land. An initiative the Eye has consistently supported.

And, for what it's worth, it's one this blog supports too.

The Joy of Six 1444

"The mansion tax will impact less than the top 0.7 per cent of households. At a time when Britain’s public services are stretched to breaking point and taxes will inevitably have to increase, it is only right that we asked the wealthiest property owners to contribute more. Asking the wealthiest to pay more to lift children out of poverty or to invest more in the NHS and social care is the fair thing to do. In fact, it is the Liberal Democrat thing to do, or at least it was up until a few days ago." Paul Hindley says Ed Davey should support the government's new mansion tax.

Robert Reich on Trump, billionaires and the media: "Why are the ultra-rich buying up so much of the media? Vanity may play a part, but there’s a more pragmatic – some might say sinister – reason."

Save Ukraine shows how Russia teaches children to hate the West.

"Restoring ponds – old and new, rural and urban – is one of the simplest, most effective steps we can take. Every pond counts, from a farm hollow to a garden bowl. Together, they form networks that wildlife needs to survive and make our landscapes more resilient to climate change." Lucy Clarke explains why restoring Britain's ponds is vital for wildlife and climate resilience.

"Philosophy is the foundation of Stoppard’s plays. They cite Aquinas, Aristotle, Ayer, Bentham, Kant, Moore, Plato, Ramsey, Russell, Ryle and Zeno. One philosopher in Stoppard’s radio play Darkside is never sure if he is spelling Nietzsche correctly." Fergus Edwards examines the importance of philosophy to Tom Stoppard's work.

Graham McCann uncovers one of comedy's great feuds: Tommy Trinder vs Bruce Forsyth.

What does our campaign against the Family Farm Tax seek?

What exactly do we Liberal Democrats want from out campaign against the "Family Farm Tax"?

It's important we know, because The Agri Brigade column in the latest Private Eye suggests the government may be about to make some concessions on the issue.

These concessions, the Eye suggests, would raise the Inheritance Tax threshold on farmland from £1m to £5m (so, £10m for a married couple). 

This would mean that the tax would not be levied at all on anything that can sensible be called a family farm. At the same time, technical changes would see a higher tax take from larger estates. The proposals are contained in a policy report from the Centre for the Analysis of Taxation.

If this happens, I hope the Lib Dems will declare victory for their campaign and move on to other issues.

However, much of our campaigning has given the impression that we are against inheritance tax on land at all. It's hard to find anything countering that impression on the party's page on the Family Farm Tax – please let me know if you can.

Yet it is the failure to levy inheritance tax on farmland that has caused the problem that page complains about most. That is, that the value of farmland bears little relation to the income that can be generated from farming it. 

If we allow farms to be used as a tax shelter, then that will always be the case.

The Joy of Six 1407

"The puzzle for me is what drives Labour politicians (and some others) around the ID card loop? What is the enduring appeal of ID cards that always survives facts and logic? Paul Krugman talks about ‘zombie ideas’, ideas that keeping coming back to life no matter how many times they are apparently killed off by reason and experience, such as the idea that the path to national prosperity is taxing the rich less. For New Labour, with Tony Blair still out ahead, ID cards are a beloved zombie." David Howarth on Labour's fixation with the idea of a national identity card.

Tim Leunig argues that Angela Rayner's problems with Stamp Duty shows that our taxation system is too complex: "When Angela Rayner bought her flat in Hove she owned no other house, in full or in part. It seems to me that the government’s own website is clear that Rayner was not liable for the higher rate of stamp duty. None of the further information on that page suggests anything different."

"A student can easily feed a PDF of the assigned book chapter to their AI application of choice and pass off the bot’s lukewarm analysis as their own; construct a study guide by uploading their notes to an AI tool marketed on LinkedIn by their peers; and even generate plausible rebuttals to arguments posed in discussion sections – all without arousing any suspicion from their overworked teaching assistants." Maria Gomberg on AI in American universities.

Marc Morris asks if William I's "Harrowing of the North" should be regarded as genocide.

"The best comedy does not 'feed prejudice and fear' but rather makes them 'clearer to see' he tells his students. But this view is challenged by talent scout Challenor, a smarmy agent up from London who takes a very different line. Comics are 'servants to the audience', not ‘missionaries’ but ‘suppliers of laughter’.  And in those two opposing views, we have the central tension of the play." Gerard Clough marks the 50th anniversary of Trevor Griffiths' play Comedians.

Gardens, Heritage and Planning visits the lost village of Imber on Salisbury Plain.