In my last post on Inheritance tax I consider the losers and the loss of social structures and care that family businesses provide.
Fiscal policy relies on the chancellor understanding winners and losers. Winners of this policy in the countryside are private equity companies, public companies, and large Charitable organisations such as the National Trust and Environmental/Ecological Charities.
If you choose to follow my posts regarding Marsh Fen and Town[1] you will see the more recent ones describing a changing food industry especially in the Spalding Area and you see a pattern over time of family owned businesses in this sector becoming public companies and, as local family interests shrink in favour of large often foreign owned Companies this is to the detriment of ordinary working people and the locals. I ask the reader to consider the following real life experience in Spalding that is echoed right across the food industry in different areas.
If you look at the history of food processing and distribution you see this starting with entrepreneurs creating family owned businesses. They have connections to their local communities and invest in them in many ways. They invest in the community in which they are based providing a great source of social and regional mobility. This takes many forms. For example when seasonal immigrants were brought into Smedley’s canning factory from Poland and Malta they have chaplains, chaperones, well run accommodation and a Company Welfare officer. In contrast the modern large corporate food factory employs whoever they can get hold of through a third party gang without any care for the multiple occupancy housing they are in, the nature of their welfare outside work, or the impact on the local community whilst paying lip service to anti-slavery audits.
The family businesses that were invested in rural towns and their people and communities have become replaced by multi-national corporates that mostly pay lip-service to such ideals
If you look at Geest as a family run business it has made considerable investments into the community that provide benefit to this day. The family and its staff were strongly involved in the local community, school governors, career advice, the arts, all the social structures of Spalding benefitted from the investment of time, money and people from this business rooted in the local community. The same can be seen with George Adams. No doubt the reader can think of other family firms that invested in their communities in different areas. In contrast public companies pay lip service to community investment and do not provide proper meaningful community investment.
Family firms are also more likely to use local suppliers, many businesses and individuals benefitted from this. Thus there is a web of the large family business creating a hub upon which smaller businesses benefit, peoples livelihoods, and the development of the community sees tangible and intangible investment from them to the benefit all. The large corporate growth of the food factories has seen a massive decrease in Spalding to the point that the area is now significantly short-changed.[2]
The disruption of family farming businesses and their replacement with public companies and private equity companies risks a great deal. Look at any local crisis caused by snow, gales, flood and fire and you will frequently see farmers tractors and equipment helping usually without charge. The generosity of farmers in support of local communities is great and unsung. Look at the investment in things like East of England Agricultural Society’s “Kids Country”[3] was instigated and driven by the generosity and hard work of unselfish family owned farming businesses.
Public companies and private equity companies do not exist within their communities living with and answering for the effects they have on those communities or the environment. Indeed looking at those responsible for our water, utilities and transport the track record is not good.
The government is creating a change to farming structure that is high risk over a wide area of the country. Consider this, when Thatcher and Blair shut down the coal industry towns were devastated. Shops closed. Supporting businesses to the mines, brick works, transport disappeared. Finance companies went bust. Whole areas were blighted. When you have a coal mine, a steel plant or a shipyard close the footprint of blight is clear and visible. In the case of farming it is not. The number of people employed on the land has shrunk from 1 in 5 in 1850 to less than 1%, but this is misleading. If you think of the farmer at the top of the pyramid, below him are a whole host of people reliant upon him, the slaughterman, the vet, the agronomist, the land agent, the banker and finance provider, the agricultural engineer, the machinery salesman, the seed and grain merchant. The list is huge and varied and not patently visible as it was when large industry was closed in the late twentieth century. Getting this wrong can be devastating to the rural economy, which statements from government to date in November 2024 show they have great ignorance of.
Finally I touch upon the other group benefitting. It is possibly with a sigh of relief that tenants on the Rothbury Estate in Northumberland see the local county wildlife trust purchasing the estate. This will ensure continuity of management. My experience of county wildlife trusts is that they have a history of co-operation with and understanding of farmers and farming, indeed many were founded by people with farming experience. The only fear I have with both these and the National Trust is the potential for misguided policy decisions to the detriment of local communities or individuals without care. I have seen good and bad decisions made by such charitable organisations, but then perfection is divine.
That this is an attack on wealth is undoubted, but before people herald it as just a Labour policy it should be considered that we have seen a freezing of inheritance thresholds under previous government and that some Tories had voiced a desire to do away with Agricultural Property Relief before. Indeed we see Michael Gove state that it is a “purely defensible” policy. If you add to this the success of anti-farming movements across Europe we do see an ongoing trend that spreads across all the main parties. It is a simple fact that an urban bias of viewpoint exists because that is where most people live and what politicians represent most. There are many false impressions and this bias is ingrained in our society to the detriment of those earning a living from it.
That public companies and private equity companies are the main source of succession and continuity without financial penalty does not, in my humble opinion, bode well for rural society.
[1] See this link: Marsh, Fen and Town
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