by Elliot Keck, head of campaigns
Following on from my colleague Callum McGoldrick’s stunning success at the York Dialectic Union last year, when he and Christopher Snowdon of the IEA won a debate on the smoking ban, I decided to try my luck with the good students of York University.
Fortunately I was given a much easier topic than Callum - for this week I was debating the reduction in agricultural property relief, better known (and more aptly described) as the “family farm tax.”
On my side was a passionate, eloquent farmer - pretty useful firepower given the topic. On the other side were two students. Why two students? Well, the university was unable to find external speakers, so unpopular was the topic. As I noted in my introductory remarks, a whopping 63 per cent of the public believes family farms should be exempt from inheritance tax, with just 22 per cent taking the opposite view. This includes 60 per cent of 18-24 year olds and 57 per cent of those with an undergraduate degree. Although, given the students did not, by definition, yet have an undergraduate degree perhaps the data for A Level or equivalent is better - in which case it’s 67 per cent.
It was no surprise then that we won the debate, 34 to 5, with 13 abstentions, although that’s an even firmer stance against the policy change than our polling would have implied would be present in the room.
But what is really worth commenting on is some of the arguments deployed by our opponents to try and polish what I called this cowpat of a policy. Some were unsurprising. Firstly, that APR is a loophole that allows the wealthy to avoid inheritance tax by investing in agricultural property late in life which is then exempt from tax. Secondly, that this is a tax relief that benefits the wealthy, and that the tax system needs to be re-balanced in favour of income, and against wealth. Thirdly, that APR is unique in the world - nowhere else has this tax relief. Fourthly, that we need to fund public services and every little bit of revenue helps.
Now I don’t need to go into detail to dismiss these spurious arguments. The claim that this closes a loophole is obvious nonsense - agricultural property remains taxed at a much lower level than other property, meaning the loophole still exists. The claim about wealth and income (as well as being exaggerated), also involves asking farmers to pay for the failed housing, economic and monetary policies of our political elites. The claim that APR is unique in the world is simply not true - multiple countries have similar taxation policies. And of course, many (e.g. Sweden, Australia and New Zealand) have no inheritance tax at all.
But my favourite argument made was that agricultural property relief is a very new tax relief, and that farming survived for centuries without it. In particular, my opponents pointed to the time of Henry III when landholders were subject to something called “feudal relief”, where the heir to an inheritance had to pay a sum to the king or their feudal relief to take possession of their inheritance. Essentially a medieval form of inheritance tax.
Which precisely proves the point - inheritance tax is in many respects a medieval, essentially feudal tax. It sets the principle that the state of today, or baron of yesterday, could simply seize your assets when you die.
There is a more amusing point here though about this example (which again, was designed to support the policy of reducing APR!). Let’s take a look at the king they mentioned, Henry III. Well, in the spirit of the age, I asked Chat GPT for one significant criticism of the long-serving monarch. Here is the verbatim answer:
“Henry was notorious for his lavish spending, particularly on grand architectural projects like Westminster Abbey and his courtly lifestyle. He often relied on heavy taxation and unpopular financial demands, such as the Sicilian Affair, where he wasted large sums trying to secure the Sicilian crown for his son Edmund, enraging the barons.”
If this has echoes of today, you wouldn’t be wrong to hear them. Only yesterday’s Westminster Abbey would be today’s HS2. The courtly lifestyle would be gold plated public sector pensions. And the Sicilian Affair would be the plan to pay to give away the Chagos Islands to Mauritius.
Because just like in Henry III’s time, we also have a state reliant on heavy taxation to fund its lavish spending. Needless to say the profligacy of our rulers is an appalling justification for the cruel and capricious inheritance tax. It’s time to scrap it.