Farmers hit out at Budget bombshell in Suffolk/Norfolk poll

The region's farmers are in shock after they took a heavy financial hit in the first Labour Budget in 14 years - despite earlier assurances they would not be targeted.

A poll of delegates Larking Gowen's Autumn Farming Conference - held at All Saint Hotel near Bury St Edmunds - showed a stark drop in optimism in the sector.

A tax relief for family farm businesses which meant they don't have to pay inheritance tax so they could be passed down to the next generation was partially scrapped in the Budget - and their direct payments were slashed.

Delegates at the conference (Image: Denise Bradley) Positivity about the future plummeted from 53% to 18%, the poll showed. Just 24% said they weren't optimistic before the Budget, but that figure soared to 64% after it. Around a fifth of delegates who took part in the poll were not sure.

Fears were raised at the event about farmers' mental health heading into the winter after another challenging year for the sector, which has faced adverse weather conditions leading to a tough harvest and autumn drilling season.

The conference also threw doubt on Ms Reeves' position that the majority of farmers (73%) would not be affected by the APR cap.

Sam Steggles, Gavin Lane, Abigail Maynard,  Cath Crowther, Michelle Masson, Emma Griffiths; Edward Vipond, Emma Griffiths and Bruce Masson at the Autumn Farming Conference.  (Image: Denise Bradley) "Rachel Reeves has dropped a bit of a bombshell on the whole of the industry," admitted conference co-chair Bruce Masson, a partner at Larking Gowen.

And the sudden loss of their traditional farm subsidy - or delinked direct payments - would hit farms "quite hard", he warned. These are now capped at £7,200 compared to the tens of thousands of tapered payments some would have been expecting next year.

Country Land and Business Association (CLA) regional director and event co-chair Cath Crowther said their initial estimates were that capping Agricultural Property Relief (APR) on inheritance tax at £1m could harm 70,000 farms. 

Cath Crowther (Image: Denise Bradley) She described the move to apply the cap as "a betrayal", adding that it had "completely pulled the rug from under" farm businesses. "It's clear that Labour hadn't understood the issues around APR."

"The only people captured by this are the active farmers," she said. "Do we really want big corporates buying up our land and those big decisions being made in London, Shanghai and New York?"

Gavin Lane, deputy president of the CLA - who farms in west Norfolk and is due to take on the top role next year - said it had been a tough week.

(Image: Denise Bradley) "I can't really impress on you enough how difficult the last week has been both for the organisation and a lot of our members," he said. 

Farmers operated on low margins and most were looking at a return of 1% on capital value, he added.

"It's going to be incredibly difficult to pay these taxes out of revenue," he said. This meant farmers would either have to sell off land or fund them from other investments.

He admitted he was "gobsmacked" by the Budget announcements, which he described as "anti growth" and "anti rural" and warned they would undermine confidence.

He felt that both environment secretary Steve Reed and Ms Reeves had back-tracked on previous statements.

"We had Steve Reed at our conference less than a year ago saying APR would not be altered," he said.

"We are looking for this to be reversed. I think it's incredibly important we get across the point that with this hanging over rural businesses it's a sword of Damocles.

"It's not what happens now - it's the perception and the ability of our businesses to plan and invest in the future."

Their efforts were targeted on persuading the government to reverse its decision, making representations on a consultation on trusts and lobbying backbench Labour MPs in rural constituencies. But he feared there was "a body of people who want to take direct action".

"I'm really pleading with people not to take direct action," he said. "I would like to take some of the anger and frustration out of the argument while we are in this process of talking to government."

He was "still hopeful" and felt that the government would have to renegotiate its relationship with the sector - but was worried about how some farmers would cope in the near term.

"I do worry going into the winter months about the mental health issue," he said. "I do think it's going to be a particularly tough back end to this year and going into spring."

The wide-ranging conference included information on Environment and Biodiversity Net Gain, Environmental and Social Governance (ESG) and how redundant farm buildings could be turned into homes and businesses under current planning rules.

Ed Vipond, farm director at Troston Farms, near Bury St Edmunds, described how he diversified into growing a niche sunflower seed crop on the 1,800ha Breckland estate. Crops like oilseed rape and sugar beet were becoming too problematic to grow, he explained.

But sunflowers were by no means an easy option, he suggested. Combining the crop was hard - but he had found a way - and the crop had proved highly drought-resistant, he said.

He now grows it over 65ha, planting in May and combining in October/November - with each year a learning curve, he said.

"They really motor - and the don't need any rain. They'll grow quite happily in a drought situation," he said.

Estate owner Cathrina Claas-Mühlhäuser - the daughter of Helmut Claas, founder of CLAAS agricultural machinery makers in Germany - was committed to the estate, he added. It lies close to Saxham, where CLAAS has its UK headquarters.

"They have invested massively in Saxham site and that would have been around the Brexit time. There's still a passion and a drive and enthusiasm to farm in the UK," he said.

Sam Steggles, founder of the Goat Shed farm shop in Honingham, Norfolk, and owner of a 50-strong herd of pedigree Simmentals, described how he and wife Caroline built up their business from scratch - many years after the family farm was sold off by his grandfather. 

Sam Steggles (Image: Denise Bradley) Among the many challenges he faced was the pandemic, which crippled him financially overnight and lost him 90% of his cheese business.

But he clawed his way back and now employs 50 people. His latest challenge is trying to foot the extra £100k he has to find to pay next year's rise in minimum wage and employers' national insurance following the Budget.

Mr Masson advised landowners to wait until more was understood about the financial implications of the Budget before taking any radical action.

Bruce Masson (Image: Denise Bradley) "Keep calm - because we are very very heavy on rhetoric and ideology at the moment but very very light on detail," he said.

The Finance Bill needed to be published and make its way through Parliament before they had a fuller understanding of the detail of the measures, he said.

"I think the advice on it would be we actually need to see how it pans out," he said.

(Image: Denise Bradley)