The wealthy do – as author F. Scott Fitzgerald noted a century ago - think they're different to us. The recent farmers' protests proved that. Despite their wealth, farmers claimed impoverishment and demanded favours and subsidies from the state. It's time we stopped putting up with their egocentric bleating.
This is the audio version:
And this is the transcript:
The wealthy aren't like us. That's something that the author F. Scott Fitzgerald observed in the 1920s in a book that he wrote called ‘The Rich Boy'. Most people think that the quote I'm about to make came from The Great Gatsby, but it didn't. It came from this other work, which is less read. But this paragraph seems to me to be particularly poignant. Let me read it to you.
Let me tell you about the very rich. They're different from you and me. They possess and enjoy early, and it does something to them, makes them soft where we are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand. They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think they are better than we are. They are different.
And to some extent, I think he's right. And that's what I want to talk about in the context of something that is deeply topical at present, which is farming.
We have seen quite enormous levels of anger amongst the farming community about the fact that the Labour government wishes to impose inheritance tax on farms, which means that these very rich landowners are going to have to pay some contribution - much less than everybody else in society - on the transfer of their property from generation to generation, and they are up in arms about it.
Why are they up in arms about it? Because they claim they are entitled to their land. And they are entitled to pass it on. And only their children can use it effectively. And if they are not allowed to pass their land on to their children, then those children will not feed us. And therefore, we will all starve, so we should be grateful to them for what they do on our behalf and compensate them accordingly by allowing them to remain way above averagely wealthy in the society in which we all live.
And, to be polite, I'm getting very bored with that argument. I find it pretty repugnant, to be totally honest, for all sorts of reasons.
The first and most obvious reason is that I do not think that the ability to farm is passed on eugenically from one generation to the next any more than I think, for example, that the ability to be head of state is passed on from one generation to the next inside the royal family.
Or, by the way, any more than I think, as used to happen in medicine, that the right to be an orthopaedic surgeon was passed on from one generation to the next as if it was a rite of passage.
All of this is simply an expression of privilege. And privilege, in that sense, gives rise to inefficiency and inadequacy at the end of the day.
And the very fact that the farmers are complaining that they can't make money out of their farms probably proves that fact. Precisely because they pass their farms on from one generation to the next without trying to innovate or reform or take into consideration the way in which the world is changing around them, their farms are failing financially, and they want us to support them in that. And I find that very annoying.
But there's more to it than that. These very wealthy people think they have a right to be very wealthy. And how dare anyone challenge them?
One of the most powerful images of the protests that the farmers made in London was the coats that the people were wearing. I've talked to a few people because I'm not really a fashion aficionado, and I'll be honest about that. But I did ask some people about how much those coats might have cost. And I'm told a thousand pounds a pop is quite likely. They were very expensive, oil Barbours, or the equivalent. And these people are claiming they're making twenty thousand a year but can wear the sort of garment that, frankly, most of us cannot imagine buying.
Now, of course, they will put them through the farm accounts as protective clothing, which is another subsidy they get that you and I don't enjoy because, by and large, we will not get any tax relief on our clothing for good and obvious reasons that our clothing is there to keep us warm and decent more than anything else, and so we don't get tax relief on it, but they will claim it is necessary for farming purposes. And so will enjoy that relief. But, that is just another indication of privilege.
And those who were complaining were not the tenant farmers who are working out on the fields not very far from where the camera is standing right now to film me.
They are not the people who will be sitting on a tractor because, by and large, they're being paid minimum wage to be out on that same field.
These people are those who have invested, like Jeremy Clarkson did, to protect their estate from inheritance tax, and who are now claiming that Labour must change its mind.
That's the other thing about the wealthy. They're very good at being noisy. In a society where noise has suddenly, because the Tories have made it so, potentially illegal, especially if it is associated with protest about something the government has done, the wealthy do make a lot of noise. And again, I find that very objectionable.
They make that noise through the media, which, of course, they own in very large part, and that is problematic for our democracy.
They think they can drive their tractors down the streets in Westminster, and nobody will worry, and yet when a young person walks down that same street to protest about climate change, they go to prison. This is also about privilege.
Now, I'm not saying that I am asking for the wealthy to be lower than everybody else. That would be absurd. I believe in equality, but I am asking for that equality. And right now, the rules that are being put in place with regard to farming and inheritance tax reinforce the existing inequality by actually saying farmers are still entitled to pay only half the rate of inheritance tax that everybody else does when there is no economic advantage to society to keeping those farmers in place in their farms because other people are more than capable of doing the job of farming in this country, and do, as most farms are tenanted, and there is no reason why that wealth should move from one generation to the next without any condition on the next generation actually even running a farm.
After all, if the farmers had their way, they would be able to pass on their estates to their children, who could then flog it off and receive the entire thing tax-free, whereas if somebody had, for example, owned a very large house in London, which could be the case as an accident of fortune, then those children who inherit that will have seen the estate diminished by inheritance tax. So, it is privilege that the farmers are asking for, and that is something that I do resent.
Do I really believe that the world will be worse off because the farmers are made to pay inheritance tax? No, I genuinely don't.
Do I actually think we will end up with better farming in the UK because farmers are being made to pay an inheritance tax? Yes, I do, because I do think this will encourage young people into farming because the price of land will fall.
Do I think we will have more efficient farms in the sense of better managed but also farms that better respect the environment - because, let's be honest, existing farmers have been absolutely terrible at that? Yes, I also think that too, because I think a new generation of farmers will worry about the way in which they environmentally produce their product.
So, I believe that this tax change is necessary and important. All I would say is that Labour might want to phase it in over time. How long? 3, 4, 5 years, so that farmers can make a transition? It's quite normal for that to happen, it's called a grandfathering provision. And this could be done for the sake of letting farmers plan a tidier rearrangement of their affairs at present when they didn't know this was going to occur. I would accept that possibility now, even though it is generous to those with wealth. But after that, frankly, I think farmers should stop moaning.
And the consequence of allowing farmers that time period now to get their affairs in order should be that they should pay inheritance tax at the same rate as everyone else. They might get that extra million allowance, I could live with that. But beyond that, if they have this phased in allowance now, 40 per cent tax for them as for all other people in this country.
The rich aren't different from us. They just think they are, and it's time we stop them thinking so because they are no better than anyone else in this society and should be playing their part just like everybody else does by paying their taxes.
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Brilliant post, totally agree with everything except for not enough emphasis on the delineation between Farmers who own large holdings and Tenant farmers who own diddly squat and really are
sometimes very disadvantaged. For generations most of my forebears were tenant farmers or share farmers (with one exception who really did fit exactly into your description) and they did it pretty rough. They pictured and presented themselves as being better off even as bank finance and taxes drove them mad and off the lands.
In the final analysis tenant farming can be a rough life and unlocking generational wealth in large holdings should reduce the cost of actual farming to the farmer who actually does the farm work, rather than the one who rents out their lands.
Did I see somewhere that the Inheritance Tax rules for farms were changed as recently as the 1980s, and before that IHT was charged. if so, then many of those protesting would have inherited their land at a time when they had to pay Inheritance Tax. Haven’t heard any of them saying how bad things were beforehand and how great they became afterwards!
You are right
The rules being replaced were created in the 80s / 90s
Sorry Richard your comments sound more like a rant. If you think that land prices will fall and young farmers will get into farming you are sadly mistaken. More likely that land will be bought by hedge funds, companies, the rich and at the other end of the scale those who will buy a relatively small area and turn it over to horses etc.
Where farmers transfer a farm to another generation and they are useless at it they will not carry on farming! As for the subsidies – sorry but thats an urban myth!
Politely Peter, you are very clearly part of the problem. And I don’t take kindly to privileged idiots telling me that their subsidies are urban myths when I see people suffering for lack of state support. If you wish to call that a rant you are entitled to do so. I call ur a bias to those in need. And you are definitely in the wrong place.
Peter
“Where farmers transfer a farm to another generation and they are useless at it they will not carry on farming!”
But they would still get the farm they would sell without IHT! And, on your analysis they would sell it to “hedge funds, companies, the rich and at the other end of the scale those who will buy a relatively small area and turn it over to horses etc. “
Precisely
Hence why I was annoyed
I struggle to understand why a tax that raises so little revenue (relatively) and is paid by so few people remains so salient. Perhaps it is because the people who do pay inheritance tax have a megaphone. But even people whose estates are well below the nil rate limit seem to hate inheritance tax.
I expect quite a lot of the heat would go out of it if the rate was cut significantly – to say 20% – and the nil rate band increased substantially (it used to increase with inflation each year but has been frozen for years, so fiscal drag is doing its work).
The quid pro who would be to cut back on the reliefs – APR and BPR have been cut already, but for example there is still the CGT uplift to market value on death.
The obvious answer is, as you say, to start at low rates and make them progressive.
Richard , once you start heading in to this territory the reply generally goes along the lines of ” Politics Of Envy ” or ” Class Warfare ” .
You then get the ” Higher Tax Kills Aspiration ” , well we are seeing today what over fourty years of this brand of economics has delivered , the rich richer and everyone else poorer and without fit for purpose services or infrastructure .
I’ve never understood why anybody wealthy to the point they wouldn’t need to worry about anything financially in their lives still demand more and more to the detriment of society .
It baffles me completely .
I am not envious of anyone with great wealth. It is cumber.
I’m 100% certain your not Richard and my post wasn’t meant to come across that way , apologies for that .
I’ve spent the majority of my working life fighting these battles at Trade Union level and I’m well accustomed to the wealth divide and what it entails .
The Thatcher years were horrendous and we’ve never recovered in my opinion .
Thanks
Slight confusion cleared
Richard,
I was a bit sceptical about the coats until I had a look, here is
https://www.barbour.com/uk/catalog/product/view/id/168432/s/barbour-x-to-ki-to-military-waxed-jacket/category/93/?_gl=1*14wvo2c*_up*MQ..*_gs*MQ..&gclid=Cj0KCQiAr7C6BhDRARIsAOUKifhthVWYnflcKfAr7HSaXR3tV7_vrP2xa0pGUHE4dMNeL5uk9caijp8aAhw_EALw_wcB
The Barbour x TO KI TO Military Waxed Jacket £929
I might of course wonder to what extent the price of the jacket is a function of its ‘tax deductibility’
Worth making the point that there are a significant number of farms and farmers that are pretty miserable and of course that Death Duties or whatever you want to call them have been an contentious issue for as long as they have existed.
BUT it seems to me that the reason why Inheritance Tax is now so contentious is that the price of certain assets in particular land and housing have risen far in excess of earnings, that is either the profits from farming or wages to the extent that it is no longer possible for most people to buy homes or farms – if you are a farmer without assistance from the bank of mum & dad.
As Danny Dorling has pointed out the cost of building has risen roughly in line with the RPI since the end of WW2 but the costs of housing relative to average earnings has risen about threefold.
We have both talked about our experiences of buying our first homes, in my case as a single APT&C Scale 3/4 Local Government Officer in Bristol in 1986, something that my colleagues and I were all doing with our own money at about the same time.
What is really needed is something the Right Wing Tory Bow Group have called for which is some kind of target for average house prices in the UK, they have suggested 4x average earnings and appropriate policies put in place to maintain this target eg restrictions on lending and who can buy residential property and what use they can put it to.
In the same way there has been a historic relationship between the the rental value of farmland which is clearly determined by the money you can make from farming it and the cost of purchase as about 20 times the rental price. In the same way I suggest there needs to be some sort of control over who can buy farmland and what they do with it. As Guy-Watson Singh has pointed out you cant buy farmland in France without approval.
Clearly if our children were able to buy their own homes and farms from their own earnings then I suggest we could take the sting out of protests against taxes on inheritance as well as of course being a very desirable thing in its own right.
You’re being a bit mischievous about the Barbour jackets. The ordinary ones are £200-300. I used to wear one for work because it was tough, thornproof, waterproof, durable and necessary. I’ve still got it, still wax it occasionally, and it looks like it went through a war. It has a sou’wester to go with it. (and it wasn’t tax deductible, I was on PAYE)
The landowner (or estate agent) is the one who goes for the tax deductible £1,000 Barbour and they never let them get dirty. Plus blue wellies with buckles, and a Barbour pattern peak cap, Tattersall shirt and a spotless green quilted gilet.
I asked about the ones we saw the protestors wearing.
I was not being mischievous, I think.
I half remember a comedy sketch (can anybody place it?) which featured somebody observing and talking to a farmer by their fallow, uncultivated, field. And the farmer is moaning about how how hard done by they are. Is then asked what they are growing: response “Money”, and telling what they get in subsidies and land value appreciation.
🙂
Is this the sketch: “The Mitchell and Webb Situation – Farming”
https://www.youtube.com/watch?v=_pDTiFkXgEE
I think you might be referring to the EU “Set Aside” policy which aimed to reduce the butter mountain/milk lake/wheat mountain by paying farmers NOT to produce them (just like they gave the NUM & steel workers full time wages not to mine coal or make steel – No?…). I called it “the ragwort subsidy”.
More recently a similar policy with a greener logic, has come along, called “rewilding” (for more detailed up to date information you would have to tune your crystal set to the BBC Home Service, and listen to “The Archers”.
A well argued and sober counter argument the likes of which we will not get in the mainstream media.
There is one bone if contention though and that is the use the minimum wage in agricultural work.
After many years living in a rural area and rubbing shoulders with local councillors and land owners (who are sometimes both) I feel that I can say convincingly that the minimum wage is not as widely paid in the shires as one might think – even today.
And accidents on farms are also a problem, indicating the cost cutting and poor work conditions for agricultural workers that can exist to boost profits.
At around the 8-10 minute mark, the Viscount Hinchingbrooke complains about hoe the inheritance tax will destroy the Mapperton Estate in Dorset.
https://www.youtube.com/watch?v=4Dcox4hf5PM
I worked in a farm related profession for 15 years. So I’ve been on the inside, and knew about half the farms in a 25 mile radius of my then home city
They were all sorts, rich, poor, posh, peasant, landowner, tenant, Lords & Ladies, commoners, council & MOD tenants.
It seems to me that the two really important issues are not how to keep farmers happy (as opposed to giving similar consideration to other essential workers like refuse collectors or office cleaners in the square mile), but the following:
1. Food security for the UK population.
2. Sustainable land use (food, wildlife, ecology, CO2, energy generation, pollution &, flood prevention, forestry, recreation for the masses (a Sheffield interest – mass trespass Kinder Scout) – whatever is needed to make EVERYONE more secure, and done with a global perspective.
Some historical perspective, when the monastery lands were confiscated and given to Henry’s cronies, the monks & nuns got pensions. Even they didn’t get to farm for ever.
I repeat, keeping incumbent farmers happy is not a good policy focus.
I might add to your list, making farms economically sustainable with a fair income for farmers that does not require tax breaks and subsidies. That brings up how farmers are treated by the supermarkets and food processors and the prices they receive. There are some farms, and Im thinking of small hill farmers, where it is hard to see how they can ever be economically sustainable. Its subsistence living and very tough.
Agreed.
And I did make this clear when I started on this theme.
My local farmer, Phil, inherited a large acreage from his father. He promptly rented parts of it out to business, reduced the actual farming to hobby projects, and now lives off the rents from people, some of thrm producing crops. He’s waiting for housing reforms to let him flog parcels off to builders. He’s poor enough to send his kids to private school.
which means that these very rich landowners are going to have to pay some contribution
This argument about farmland owners needing to pay some contribution doesn’t work on a deeper discussion in my view. As I understand it, inheritance tax can still be avoided entirely by gifting your estate above the threshold, or just all of it, to a relative more than 7 years before you die. If you don’t plan for that, or a horrible accident takes you while you’re younger, then the new inheritance tax falls due. In effect the Labour scheme is a tax on bad planning or bad luck and that is not a sensible basis on which to design a tax system. and nor is it fair.
If the intention is to get all landowners to make a contribution to reducing the gap between government income and expenditure, then there is a suite of policies available that doesn’t discriminate between those good and bad at planning or those favoured by luck.
And that suite is?
Right now you have not contributed my making this observation
The clue is in my name – the UK should adopt the full New Zealand model.
What is that?
Why should we know what it is?
And why do you need to be cryptic?
You’d be amazed how many fathers won’t let go until they actually die. I used to visit farms with granddad still hanging on, doing it the way he’d always done it, rattling around in a big farmhouse, son gradually getting bitter, living with his wife in a small farm cottage, and HIS son about to take over the bitter excluded role, when grandad finally qualifies to pay inheritance tax, son takes over, but has lost all enthusiasm for new ideas through waiting too long, but will stand in the way of HIS son till there’s another grandson in the queue. Those were some of the most miserable, badly run farms I ever visited. The clever ones retired on milk quota, slaughtered their dairy herds and let out their grazing & arable land to neighbours, while son got into contracting.
Anyone wanting special IHT regimes for farmers has to explain why we don’t offer the same to other small family businesses, and how that might work – Ice cream, restaurants, garages, pharmacies, solicitors, bike shops, furniture upholsterers, garden centres, child care or elderly care facilities – but maybe they they don’t lobby as well as landowners (because it is landowners we are talking about here).
“You’d be amazed how many fathers won’t let go until they actually die. I used to visit farms with granddad still hanging on, doing it the way he’d always done it, rattling around in a big farmhouse, son gradually getting bitter, living with his wife in a small farm cottage, ”
I am NOT amazed.
In the USA many farm families, who are truly large farmers, operated on a family business model not much different than that of the Windsor-Mountbatten-Glücksburg family.
🙂
This so reminds me of Darren Cullen’s Mini Daily Mail, with the headline “Rich people failing to integrate into British society”
https://www.spellingmistakescostlives.com/product-page/mini-daily-mail-preorder
🙂
Whether farmers think they are entitled to ownership or not, the fact is that they are better placed to continue owning farms because it will not then be bought by large corporates or split into smaller lifestyle properties with pony paddocks, and they also know the land intimately and what will or won’t work there. Therefore, rather than argue to reverse the Chancellor of the Exchequer’s proposals, the discussion on farming and inheritance tax (IHT) needs to move on from protest alone to proposing alternatives that genuinely protect family farms but prevent tax avoidance (and inflation of land prices) by wealthy landowners with little or no interest in farming. The continuity of family farms is important for food production and an important glue for sustaining rural communities, making some farming-related inheritance tax (IHT) concessions justifiable, but a simpler, fairer, better targeted approach than changing Agricultural Property Relief (APR) is required. Reversing the proposal maintains the status quo with all its associated abuse by the very wealthy. Certainly the proposed thresholds could be raised, but that would remain overly complicated and will benefit even more tax avoiders than currently proposed if they fall beneath a raised threshold. It’s also ironic, and harsh, that a Labour government’s proposal disadvantages single parent farmers – e.g. divorced or widowed – who cannot share allowances with a spouse. Practical alternatives, such as a current farm residency requirement, or heirs’ commitments to continue farming for a number of years, or practicing nature-friendly farming practices, in exchange for IHT concessions have not been explored, but still could be (there is much to be learned from such approaches in Europe – especially France). A collaborative effort between the NFU and government on such ideas could break the current deadlock and reset relationships without either side losing too much face. This all leaves me puzzled that there is so little discussion about alternatives. Might this be a case of sheer intransigence on the part of the government combined with protection of their wealthy members by the NFU and CLA? Whatever the answer to that, at tge moment this is an own goal for Labour as it provides ammunition for the political right wing who are not only good at making a lot of of noise, but are cleverly exploiting the public’s rose-tinted perception of cheery red-faced farmers with baa-lambs.
You ignore an obvious fact.
Family farms are failing and have degraded the countryside whilst reinforcing inequality.
How would you address that, before seeking extraordinary privileges?
As it is, the system we’re getting permits perpetuation of failure. Why is that acceptable? Please explain. Then we might take the discussion forward. At the moment it’s utterly one-sided. Why?
Surprising that no-one has yet mentioned ‘Red Diesel’ fuel, the “dyed gas oil for registered agricultural or construction vehicles such as tractors”.
The fuel duty on red is 47 pence per litre cheaper than ordinary diesel, giving farmers/landowners close to 50% saving on fuel costs. A very nice subsidy, but why have farms been receiving this special subsidy since 1961?
Are they special, or do they simply shout and protest louder than others?
Thanks for raising it.
I’m not particularly religious in any conventional sense, but James 5 1-6 is pertinent.
Come now, you rich, weep and howl for the miseries that are coming upon you. Your riches have rotted and your garments are moth-eaten. Your gold and silver have corroded, and their corrosion will be evidence against you and will eat your flesh like fire. You have laid up treasure in the last days. Behold, the wages of the laborers who mowed your fields, which you kept back by fraud, are crying out against you, and the cries of the harvesters have reached the ears of the Lord of hosts. You have lived on the earth in luxury and in self-indulgence. You have fattened your hearts in a day of slaughter. …
Nothing has changed!
Wow
I was not familiar with that passage
Luther did try to get it excluded from the Protestant Bible. It says other dangerous things too, like orthodox belief not being enough if it didn’t prompt you to do good things like feeding the hungry.
There is some very subversive stuff in the Bible, not to be used carelessly. Why do you think they kept it out of the vernacular for so long?
Try reading the prophet Amos Ch 5.10-15 out loud in Threadneedle Street, I suspect you’d be in a CoLP Transit van before you’d finished reading. https://www.biblegateway.com/passage/?search=Amos%205%3A10-15&version=CEV
😉
Amos is very good on such issues