Tuesday, 4 June 2019

Who ate all the pies?


Tom's pie chart

Comments here and elsewhere noted that this week's Countryfile took a sharp left turn, with Tom Heap looking at  UK land ownership and tax avoidance, and concluding that "it's clearly very important that the countryside doesn't simply become a tax haven for the super rich".

Land reform campaigner Guy Shrubsole from Friends of the Earth appeared, as did Robert Palmer from the left-wing Tax Justice Network. (You might as well face it he's addicted to stamping out tax avoidance).

Here's a transcript:

ELLIE HARRISON: Now, many of us have strong feelings of shared responsibility and even a sense of ownership over our countryside. But is too much of it now in the hands of the super-rich looking for tax breaks? Here's Tom.
TOM HEAP: The value of our countryside speaks for itself. A wise man once said, "Buy land - they're not making it any more." But here in the UK, getting your hands on a slice of the pie isn't easy. Today in England, 50% of the land... ..is owned by less than 1% of the population. And in Scotland, a little over 1,000 people... ..own 70% of the land. That's a lot of our land being swallowed up. But what does it matter who owns the countryside? Well, the Scottish Land Commission has warned we're facing a land monopoly that could lead to an abuse of power. And there are also concerns that some landowners are more interested in securing tax breaks than managing the actual land. So is the UK countryside in danger of becoming little more than a rural tax haven? Trying to find out who owns all this land isn't easy. There is a Land Registry for England and Wales, and separate ones for Northern Ireland and Scotland, where we should be able to look up ownership - but in many cases, the entries simply aren't there. Take the land around me here in West Berkshire - it's among the millions of acres that the Land Registry simply doesn't have an entry for. Guy Shrubsole is a campaigner who's spent years digging through the English register's dead ends, and he's discovered nearly a fifth of our land is not properly accounted for.
TOM HEAP: So why have you brought me to this particular spot?
GUY SHRUBSOLE: Well, this is a spot of actually unregistered land, which means that we don't know who the landowner is.
TOM HEAP: It seems so bizarre. I mean, how come?
GUY SHRUBSOLE: 17% of England and Wales is actually unregistered land. The Land Registry has been around since about 1862, yet it still hasn't actually finished the job.
The HM Land Registry puts the missing figure at 14%, but say they aim to have it sorted by 2030. While a lack of information is one issue, Guy thinks it's what the records DO tell us that's the real problem.
GUY SHRUBSOLE: A really large number of big estates can trace their land ownership back as far as the Norman Conquest from 1066, when William the Conqueror came over, conquered England and handed out the land to his 200 barons. I think it says quite a lot about how concentrated power, wealth and land still is in our country and I think that's quite worrying for how we look after the countryside. 
Including the unaccounted-for chunk, Guy estimates nearly half of the land is where it's been for centuries - in the hands of old money. But the landscape is changing. Today, almost a fifth of land rests with new money - oligarchs, entrepreneurs and investors. Approaching another fifth is owned by private companies...with the rest split between the public sector, charities, the Crown and the Church. Modern-day land barons range from the Duke of Buccleuch, who owns more than 200,000 acres or 81,000 hectares, and the Duke of Abercorn in Northern Ireland - it's thought he owns at least 15,000 acres - to foreign investors like the Sheikh of Dubai, with more than 60,000 acres in the Scottish Highlands, and the American energy company Valero, which is reported to own 17,000 acres running from Wales to north-west England. With 95% of the land eaten up, there's little left for the rest of us. And that lack of opportunity is being felt across rural communities. Some say this is a land grab that has left small-scale farmers across the UK struggling to expand their business, or even get a foothold on the rural property ladder. One man who dreams of doing both those things is Matt Launder. He's a first-generation tenant farmer giving it his best shot in Welshpool.
TOM HEAP: Tell me about the struggles you've had in the last year or so with land and getting the right ground to farm.
MATT LAUNDER: Predominantly I am a tenant farmer, I farm 11-month tenancies, so when it comes to that you don't ever know year-on-year if you're going to keep that ground, so there was about 300 acres of the farm which I rented that was sold off, you know, and that's...
TOM HEAP: A big proportion.
MATT LAUNDER: It's a big chunk of my business, yeah. But it was, you know his choice to do, it was his land. I don't know of many tenancies about now which are longer than 11 month, so us as the next generation or the first generation of farmers, that's how we do it, it's all risk. But to grow my business, it's something I'll have to keep doing, and it's just part of it, I think.
TOM HEAP: You must know other young farmers like yourself - what are they telling you? How difficult is it to get established as a farmer today?
MATT LAUNDER: It's seriously hard, I think, it's seriously hard but very worthwhile. You know, we're coming from nothing and competing with someone who's established, but that is the way of the business. And one day I will hopefully be that established person. But it's the beginning and, you know, no good songs are written about an easy start, are they? 
Matt is clearly one to watch. He's got the drive to succeed in a tough business but he risks getting left behind as farmland is snapped up by those who can afford it. Even with a recent slow-down caused by Brexit, the price of land has gone up fivefold since 1995. And estate agents are marketing UK farmland to attract the richest investors from across the globe. It's clear where they think the value of land lies - farmland is transferable to the next generation in a tax-efficient way. It sounds more like trading stocks and shares than looking after what's around me here. Some of the attraction lies in Agricultural Property Relief - or APR for short - which was written into inheritance tax law 35 years ago. It was designed to help family farms survive when they are passed on to the next generation. But today critics say it's allowed the wealthy to harvest tax breaks. Robert Palmer is from the campaign group Tax Justice UK.
ROBERT PALMER: The idea of what we want to do is build political momentum to get a fairer, more effective tax system here in the UK.  
He says the UK Treasury has lost millions as wealthy investors deliberately buy up land so they don't have to pay inheritance tax:
TOM HEAP: Just as an example, say I had a £500,000 house and I wanted to pass it on to my kids, or I had £500,000 of agricultural land, what would be the difference? 
ROBERT PALMER: So on the agricultural land, you could pass on the whole amount tax-free to your children. For your house, you'd have your £325,000 threshold and above that you would pay 40% tax on the amount that was left. So you'd be paying about £70,000 of tax. 
TOM HEAP: In what sense is this unjust? 
ROBERT PALMER: There is absolutely no cap on it. Our research shows that there are just 60 families sharing £100 million of tax relief between them. These are huge amounts of money that are going to already wealthy families. 
Although he agrees that APR is vital to the survival of smaller family farms, Robert thinks the relief should be targeted to avoid abuses.
ROBERT PALMER: So one of the very obvious things would be to put a cap on the amount of relief you could get. So for example you could say the government will give tax relief up to £1 million worth of property, and after that there's no more. You could also say, for example, that if farmers had held the land for ten years or more they could also be able to get the relief. 
HM Treasury says APR relief can only be applied to working farms, which means any landlord claiming it must prove a commitment to farming the land. But is money flowing from business into the countryside really all that bad? Last year I put these very tax concerns to Sir James Dyson, the vacuum cleaner tycoon who's bought up large swathes of the countryside.
TOM HEAP: So this isn't just something that you're doing for tax purposes, a tax dodge.
SIR JAMES DYSON: No, no. Far from it. I'm investing a lot of money. We've built 93 miles of hedging. We're building 15km of dry stone walling, we're repairing all the ditches, about 650 hectares, and set aside grass. 
So big estates can provide real payoffs for the countryside and environment. One businessman who's bought into land, albeit on a much smaller scale, is Roger Saul - he started the fashion brand Mulberry. 15 years ago, he moved from handbags to grain sacks as he began growing organic spelt on the Sharpham estate in Somerset, which he bought from a neighbour.
TOM HEAP: So why the move from bags to farming?
ROGER SAUL: I'd had a crash landing with Mulberry at the end and sadly came out, but the farm came up for sale. It was the dream because I used to spend all my summer holidays with my grandparents over in Suffolk, farming.  They were farmers, so that had been sort of instilled in my brain. 
Roger converted the rundown dairy farm to grow spelt, when a doctor recommended it for his sister, who was dying of cancer at the time.
ROGER SAUL: She had been trying to get something that could work in her tummy that could perhaps rebalance the alkalinity and acidity of her body. And somebody said, "Try spelt." It's good for the mind, good for the body, good for the soul. 
With his gift for marketing, Roger has expanded the business in the past 15 years, breathing new life into the farm and the local community.
TOM HEAP: Roger, I can see you've really got a passion for this. But do you understand that for some farmers, money coming in from the outside kind of prices them out of getting on to the property ladder?
ROGER SAUL: Yeah, I can quite appreciate that. But I suppose if you look at it from my position, the fact I've created a spelt business out of nothing from here over a 15-year period and that we're probably doing, I don't know, 15 times the turnover and we're employing eleven and a half people, and we've got seven farmers growing for us - we're creating wealth for those around us - not on a big scale in any way, but we're making this all possible whilst protecting the soil, whilst protecting the environment. And I think that's vital.
TOM HEAP: So do you think this inheritance tax relief which makes that passing on easier, do you think it's right? Or do you think it's just being used as a tax dodge?
ROGER SAUL: I think in a farm of this sort of size, it's crucial. Already it's tough enough if you've got three children, I would imagine. Are you going to split your farm in three or is it going to go to one? Add that capital tax that would come in, I think it would destroy farming. 
From ancient estates to insecure tenancies, the way land is owned has a huge impact on the way it's farmed. And while it's difficult to legislate for people's motives, it's clearly very important that the countryside doesn't simply become a tax haven for the super rich. 

2 comments:

  1. Or to put it another way - 0.5% of the population own 100% of the bog found in the UK. They are welcome to it.

    This is a typical lefty gripe when the real problem - what is causing real distress for real people in their millions is that they are being squeezed into smaller and smaller properties in the south and young families are increasingly finding that they have no prospect of ever securing a house with a garden for their children.

    Still if the BBC want to see Mugabe-style policies being implemented...(is anyone naive enough to think that people like Shrubsole and Palmer will stop at closing off tax concessions?).

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  2. What Tom Heap and Countryfile may not realise is that a lot of the land owned, especially in Scotland, is not necessarily farming land for which IHT Relief is available. It is difficult to farm land, especially for arable crops, when it is full of rocks and/or trees and is at many degrees to the horizontal. Then there are the expanses of water ...

    Tom Heap & Countryfile are also misrepresenting what happens tax-wise. The Government (which has no money, only money from taxpayers) does not give this money to already wealthy people. It is just allowing them, if they are producing food from land, to not be taxed as highly as they might be. It could be said to be not penalising them for something in return for the greater population, ie, giving nothing in return for something. 'Some might say', ho-ho, that that is a bit of a bargain.

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