THERE IS a clause in the Ministerial Code that states no conflict should arise or ‘could reasonably be perceived to arise’ between Ministers’ duties and private interests.
That brings us to Chancellor Rachel Reeves’s ‘farmer-harmer’ inheritance tax raid on British family-owned farms. In theory, this new tax was intended to help raise money to fill the supposed £22billion ‘black hole’ in the public finances which Reeves mysteriously found five minutes after the Labour 2024 election landslide. If you believe the Starmer/Reeves claims about the black hole, most of the tax rises in the Reeves ‘Bankrupt Britain’ Budget lasts November could appear to make sense. As the Chief Secretary to the Treasury, Darren Jones, explained referring to the tax rises, that businesses would just have to ‘suck it up’.
Unfortunately for Rachel and Darren, businesses have decided to not ‘suck it up’. Instead new hiring has been cancelled, tens of thousands of people have been told they will be losing their jobs, several massive investments such as the AstraZeneca £450million new vaccines manufacturing plant (a cause of alarm, if not outrage, to the manufacturer’s many critics) have been cancelled and many entrepreneurs are leaving the country. Moreover, as the Reeves/Starmer/Jones Budget plunges the country into a recessionary doom loop, tax revenues will collapse and any possible increase in tax revenues will be eaten up by the massive increase in the government’s out-of-control spending andborrowing costs.
Back to the farmer inheritance tax. Given the outraged reaction of British farmers, some might wonder why this reform was introduced. For one thing, it will be collected quite slowly as it will be paid over ten years after a farmer dies, so it will not be a quick fix for the ‘black hole’. Moreover, like all new taxes, it will generate considerably less revenue than planned as farmers consult advisers to find ways of avoiding it, such as gifting their assets years before their deaths.
There are several possible explanations for the ‘farmer harmer’ tax. These are not mutually exclusive: some or all may be true at the same time. On a basic level, some might see this as a typically vindictive Labour assault on a group they feel have traditionally voted Conservative and therefore there are no votes to be lost by penalising them. In fact, just as Stalin demonised the ‘kulaks’ for allegedly causing food shortages by hoarding grain, Labour may be hoping that their mostly inner-city electorate will cheer Labour’s farmer-bashing when supposedly greedy millionaire farmers are landed with new taxes on their supposed ‘massive wealth’.
A further explanation is that the farm tax may force many smaller farmers out of business. This would allow the Labour government, possibly using the vehicle of the government-owned Great British Energy, to pick up these farms at knock-down prices and convert them from what Labour seems to see as ‘useless’ food production to much more useful (in Ed Miliband’s eyes) wind and solar farms.
There is a third and possibly more interesting reason for Ms Reeves’s enthusiasm for her new tax. In 2015, the City investment group Aberdeen Asset Management, now calling itself ‘abrdn’ – perhaps Aberdeen decided capital letters were racist or something equally ludicrous – bought the multi-billion dollar US-based FLAG Capital. FLAG stands for ‘Forest, Land and Agriculture’.
Abrdn also launched a couple of multi-million pound funds to invest in UK forestry and agricultural land. In a 2018 interview with an agricultural investment publication, abrdn seems to express frustration at the difficulty in acquiring farmland in the UK due to so much being owned by families who had farmed the land for generations and so were unwilling to sell out to companies such as abrdn: ‘given the family ties involved in the farmland sector, there may be multiple interests (not just financial) that could potentially create challenges in the ownership shift to purely financial owners‘. ‘Purely financial owners’ are, of course, financial predators like abrdn which want to get their hands on British farmland.
Abrdn is one of the biggest real estate owners in the UK and, in its December 2023 annual financial report, it cites its ownership of nearly £76billion of real estate assets and its intention on growing this area of its business. However useless the Tories were in power, it was hardly likely that a Conservative government would find a way to start confiscating agricultural land so it could be flogged off to City investors.
Abrdn proudly claims that it does not make donations to any political party. But there are more subtle ways of influencing government policy than buying them and their wives fancy spectacles, clothes and underwear. Abrdn’s big opportunity seems to have come with the impending election of Starmer’s Labour government.
In July 2024, the left-wing think tank Demos published a report titled ‘The Future of Inheritance Tax in Britain‘. A key issue covered in the Demos report is the number of exemptions from inheritance tax in the UK. Demos writes: ‘The UK is unusual in offering 100 per cent relief for owned businesses and agricultural property, and not counting most private pensions for inheritance tax purposes.’ If you’ve looked at Rachel Reeves’s changes to inheritance taxes, in particular those concerning SIPPs and inheritance tax on agricultural land, you might detect more than coincidental similarities to the recommendations of the Demos report.
The main sponsor of the Demos report was abrdn through their abrdn Financial Fairness Trust operation. Abrdn manages at least £506billion UK and global assets.
So, what we appear to be seeing is a deliberate attempt to break the stranglehold farmers have on land ownership in Britain similar to the way the Dutch government used restrictions on fertilisers and other tactics to force some of their farmers out of business so the government could use the land for other purposes – mainly housing for migrants and energy production.
Incidentally, the CEO of abrdn, Douglas Flint, was appointed by Rachel Reeves in December 2023 as part of a ten-person panel to advise her on her plans for government. Furthermore, abrdn is now one of the 14 members of the Treasury’s newly-formed NISTA (National Infrastructure and Service Transformation Authority) set up by Reeves in October 2024.
All this suggests there may be serious breaches of the ministerial code in the way that Rachel Reeves has apparently used a tax reform – the removal of the inheritance tax exemption on farmers – to further the business interests of a financial company, abrdn, with which she has very close connections. By forcing farmers off their land, because many will be unable to pay the new inheritance tax, Reeves seems to providing an excellent opportunity for her ‘friends’ at abrdn to buy agricultural land at very attractive prices. Given lawyer Starmer’s apparent obsession with adhering to rules and regulations, it could seem astonishing that he hasn’t yet sacked Reeves for what seem to be blatant, self-serving breaches of the ministerial code in the way Reeves appears to have used taxes to assist abrdn’s commercial interests.
