THE UK Government has moved to quell family farmers’ fears over the Chancellor of the Exchequer’s Inheritance Tax raid, claiming its impact will be far less than farming organisations have claimed. However, the Welsh Government has no clue about its impact on rural Wales.
That became clear when Huw Irranca-Davies, the Welsh Government’s Cabinet Secretary for Rural Affairs, answered questions in the Senedd on Wednesday, November 13.
LOTS OF QUESTIONS, NO ANSWERS
Mr Irranca-Davies, also Wales’s Deputy First Minister, was repeatedly asked about the impact of the tax raid on Welsh family farms. Not only could the Minister not provide a convincing answer to any of the questions, but he confirmed the Welsh Government had neither commissioned nor been privy to any impact assessment on family farms.
Wales’s Rural Affairs Minister couldn’t say how many family farms will be affected because the Chancellor does not know because the tax base is uncertain.
Huw Irranca-Davies repeatedly cited modelling supposedly done by HM Treasury before the recent Budget about the number of farms that could be affected. However, when pressed further on that number, he could provide no detail.
WELSH FARMING OWNERSHIP TOO “COMPLEX” FOR WG
The Cabinet Secretary claimed that he could not provide any details because the ownership structure of family farms in Wales was too complex to give a definitive answer. It didn’t seem to occur to Mr Irranca-Davies that he could not have it both ways on the issue.
The Minister accepted the Treasury calculation but acknowledged that the number of family farms affected was uncertain because their ownership was “complicated.”
If the latter is true, the former represents no reassurance at all to Wales’s farmers. The failure to assess the tax base arguably reflects a lack of basic due diligence before announcing a change to taxation. It smacks of a policy formulated on the hoof without a critical examination of its likely effects.
Answering a question from Laura Anne Jones, Mr Irranca-Davies let the cat out of the bag: “It’s certainly not helpful to speculate on numbers of affected farms given the many complex factors that are involved. Those include the farm ownership structures, the inheritance plans, and the applicable reliefs that may apply, which all affect the application of APR. Farm values themselves also fluctuate, making it quite difficult to estimate how many are valued over the IHT threshold at any given point.”
He concluded: “We have to see how this works out. I understand NFU Cymru and others will be making representations to the Chancellor, and I wish them well with that, as well as with presenting the data and evidence on their analysis.”
MINISTER IMPLIES PREFERENTIAL TREATMENT FOR SFS FARMS
When Llyr Gruffydd, Plaid’s Rural Affairs spokesperson, asked the Minister whether he would also make representations on Welsh farmers’ behalf, a blizzard of word salad sped across the Chamber. Mr Irranca-Davies didn’t want to say “no”, but “no” is what he meant.
However, his response to Llyr Gruffydd contained an enigma. It is not clear whether the operation of Mr Irranca-Davies’s mouth outran his speed of thought. He appeared to imply that farms signed up to the Welsh Government Sustainable Farming Scheme could get preferential treatment from the tax.
He said: “The Welsh Government did, indeed, work with the UK Government to make sure that Welsh farmers joining the work that we’re still doing on the sustainable farming scheme are not disadvantaged in any way by the agricultural property relief proposals.”
WG WANTS FARMERS TO DO ITS HOMEWORK FOR IT
Welsh Liberal Democrat MS Jane Dodds tried a different tack to get a proper answer.
She asked: “It really is very interesting to hear you say that very few farms will be affected, because we do need those numbers, if that’s your view. We need that backed up with evidence. I just want to say that while a £1 million threshold may seem substantial, Welsh family farms are often asset rich but cash poor. These families live modestly and work tirelessly on the same land, year after year, yet they are now facing an onslaught of financial pressures.”
Mr Irranca-Davies’s response suggested that he had forgotten what he had said about the issue’s complexities, the necessity of raising more money from taxation, and the impossibility of giving a definitive answer.
He told Ms Dodds that farmers should go to the Treasury website and look for themselves.
Of course, if it was that simple, one of Mr Irranca-Davies’s team could have checked on the core position before he declared it so complex that it defied analysis. He pressed on by suggesting that individual farmers and farming unions could do what the Welsh Government, with its civil service apparatus and deeply comforting relationship with Labour in Westminster, couldn’t do: come up with a detailed analysis of the tax’s impact. With the power of the state’s resources and two Labour governments behind him, Mr Irranca-Davies couldn’t achieve that.
Absent any analysis or impact assessment of its own, the Welsh Government will necessarily fall behind any analysis that Wales’s farmers prepare. After all, on his terms, the Cabinet Secretary will have no alternative figures upon which to base a judgement that fits the singular nature of Welsh farming. The percentage chance of the Welsh Government following the logic of its self-acknowledged ignorance is, however, nil.
