Thursday, January 23, 2025
Major supermarket comes out against Labour's 'tractor tax'
The paper says that the retailer has backed farmers in their fight against the inheritance tax raid, with its chief commercial officer warning the “UK’s future food security is at stake”:
In a triple blow to the chancellor as she seeks to woo business investment to the UK at the World Economic Forum in Davos two more huge supermarkets, Lidl and the Co-Op, also called on her to pause the policy.
The interventions mean Tesco, British agriculture’s biggest customer, Lidl and the Co-Op have joined other major supermarket chains Sainsbury’s, Asda and Morrisons in backing farmers.
To add to her woes, a new report by the Office for Budget Responsibility (OBR) warned the policy may raise less than the Treasury hopes, with the £500m-a year-revenue forecast given a “high” uncertainty rating and likely to fall after seven years as families use tax planning to avoid the charge.
Tesco’s chief commercial officer Ashwin Prasad said that ensuring farms remained economically sustainable was “essential” not just to food security but so customers “can continue to get the great quality food they want, at a price they can afford”.
The calls will increase pressure on Ms Reeves to U-turn on her controversial tax raid. The chancellor has faced a furious backlash to her Budget decision to extend inheritance tax to family farms, which critics warn could sound the death knell for family farms in England.
The changes mean that farms valued at £1m or more would be liable for 20 per cent inheritance tax.
The Treasury says that, with tax allowances, in reality, only farms worth £3m would be affected, just 28 per cent of family farms. But official Defra figures appear to suggest as many as 66 per cent could be hit.
Thousands of farmers brought Westminster to a standstill in November when they descended on the capital to voice their opposition to the change.
Mr Prasad said: “One message is loud and clear: farmers desperately need more certainty. After years of policy change, it has been harder than ever for them to plan ahead or to invest in their farms.
“One current area of uncertainty is the proposed change to inheritance tax relief. With many smaller farms relying on APR [agricultural property relief] and BPR [business property relief], we fully understand their concerns.
“It’s why we’ll be supporting the NFU’s calls for a pause in the implementation of the policy, while a full consultation is carried out.”
I can't see Labour backing down on this one, but as the pressure increases it's possible that some of their newly elected MPs in rural seats will start to question the policy.
