Changes in inheritance tax will be devastating for Welsh farmers
Ann Davies MP
As possibly the only Member of Parliament who milks the cows on a Monday morning before travelling to London, I can say that dealing with a herd of cattle is sometimes less frustrating than dealing with a herd of MPs.
I have been taken aback in recent weeks by the disregard the Labour government has for agriculture. A mixture of insensitivity to rural communities and a lack of understanding of how farming works mean that they fail to see the impact their policies will have.
Agriculture and farming play a very important part in Welsh society, not just economically but culturally and socially. Farming families are custodians of the landscape and language in Wales, with a high proportion of them living and working in the Welsh-speaking heartlands.
Support
Agriculture is integral to the Welsh economy, employing around 58,000 people. As the climate crisis leads to more food insecurity, supporting our farmers will be key to our future food security.
Despite the importance of farming and agriculture in Wales, this Labour UK Government have sought to undermine our farmers with the changes announced in the recent Budget.
An effective 20% tax rate on assets over £1 million may seem reasonable on paper, but as we know, most farmers are asset rich and cash poor and would be unable to pay this tax.
As I mentioned at PMQs last week, the average wage for an upland farmer in Wales is £18,600. The Prime Minister’s response did not fill me with confidence.
Devastating
About 30% of land in Wales is under some form of tenancy or let, with the majority being short term—of only a few years—under a farm business tenancy agreement. As far as I can see, the UK Government have not even taken these farmers into account, despite being at the sharp end of this tax.
The news regarding the changes in inheritance tax will be devastating to farmers, and the Government’s communication of it to the sector has been abysmal.
Farmers are also worried that Labour’s decision to apply the Barnett formula to agricultural funding, instead of a ringfenced addition, could severely reduce funding for Welsh agriculture.
This would reduce Wales’ share of agricultural funding from 9.4% to 5.6%. According to the FUW, that would see a cut of over £146 million. My Plaid Cymru colleague, Ben Lake MP, tried to get clarity from the Secretary of State for Defra, Steve Reed, but his response that consequentials “will work in the way they always work” showed he just didn’t get how Welsh agriculture funding has worked.
Trade deal
The election of Donald Trump in the USA has reopened speculation of a US-UK trade deal. The trade deal agreements we have had with Australia and New Zealand have undermined Welsh farmers with imports, and we must not allow Labour to repeat the Tories’ reckless decisions.
All Parliaments of the UK, including in Wales, should have a deciding say on any terms of future trade deals, particularly those that affect Welsh farmers.
The previous UK Government consulted to make the country of origin clearer on food labelling, so that customers could more easily buy British produce and support local farmers.
Now, with farmers under pressure from every direction, the Government must go further by ensuring that “Welsh” and not just “British” labelling is included to help customers who wish to support Welsh farmers when they are shopping.
Welsh farming isn’t just another industry—it’s the backbone of our rural communities, our culture, and our heritage.
If we’re serious about preserving our rural heritage and safeguarding future food security, we must back our farmers all the way.
That means fair taxation that respects their asset-rich but cash-poor reality, real protections against unfair trade deals, and clear, prominent food labelling that allows shoppers to actively support Welsh farmers when they choose Welsh produce.
Ann Davies was elected as Plaid Cymru MP for Caerfyrddin in 2024. She was born and raised in Llanarthne where she farms a tenanted dairy unit with her husband Gareth. She was elected as the Chair of the Carmarthen branch of the Farmers’ Union of Wales in 2023.
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Oh dear, brexit gives them what they want
What on earth has changes in inheritance tax got to do with Brexit? And secondly, I don’t remember Plaid or FUW campaigning in favour of Brexit. Can you please explain your comment?
It’s his anti-agriculture itch all over again. It’s incurable so we all have to suffer it along with him ! Probably prefers his foods stuffs imported, shipped by air freight from distant producers, yet claims to be “green” .
Well said Ann, farm’s in Wales are very important in sustaining our culture. If they get bought by companies, we will lose our rural identity.
Every farming partner has an allowance of £ 1mil each
Plaid standing up for the hard off working people – farmers with properties over £1,000,000!
Plaid standing up for the hard off working people – farmers working every hour god sends in one of the most dangerous jobs in return for an income that is below that of people in cushy desk jobs in order to put food on your plate.
I don’t agree with Plaid on much, but they are absolutely right here.
Much like Karl further up the page, Llyn has an “anti-agriculture itch” which is incurable. By visiting this site we all have to suffer it along with him ! Prefers his foodstuffs imported, and probably shares the freight costs with Karl to ease his “green” conscience.
Because I have no problem with inheritance tax being charged on some farms worth over a million pounds I therefore am anti agriculture and prefer foodstuffs imported? No I simply believe those with the broadest shoulders should pay their fair share.
If you had the faintest idea of the low return on assets employed in agri especially on the family farms that are a core part of rural Wales you would realise that the cash flows after meeting running costs and reinvestment in stock and equipment are modest to say the least. “Cash poor, asset rich” is not a casual catchphrase but reflects the reality within the industry for most. Now there is a very good case for looking more closely at the allowances and concessions granted to those farms that have moved onto a bigger scale where they more closely… Read more »
The next generation of farmers will have to use their broad shoulders to pull the plough once they’ve sold all the farm machinery to pay inheritance tax on land that only has value on paper. Maybe you’ll offer to help.
Farmers pay their fair share in blood and sweat, seven days a week, toiling in all weathers to feed people like you. Show a little gratitude.
‘Because I have no problem with inheritance tax being charged on some farms worth over a million pounds I therefore am anti agriculture and prefer foodstuffs imported? No‘
It’s because like the vast majority of the Labour party you are ignorant of how farm businesses work and confuse working farmers with landowners and the landed classes. The confusion of the two as they exist in Cymru being even worse.
“All Parliaments of the UK, including in Wales, should have a deciding say on any terms of future trade deals, particularly those that affect Welsh farmers.”
What’s that meant to mean? That the Senedd should have a veto on UK future trade deals?
Let’s be clear. The UK Paliament is *the* deciding Parliament for the major decisions affecting the UK. In this case, trade deals. The devolved “Parliaments” have certain powers devolved to them. That doesn’t include trade deals.
Agree.
“All Parliaments of the UK, including in Wales, should have a deciding say on any terms of future trade deals, particularly those that affect Welsh farmers.”
Looks to me like proposing that all four parliaments of the UK should come to a consensus agreement.
Let’s be clear agricultural trade deals are the preserve of the UK parliament but agriculture itself is not.
Independence would of course mean that the deciding say would rest with our government alone.