The net zero tax break threatening Britain’s food supply
Rishi Sunak made just one simple promise as he addressed farmers in February: “I’ve got your back”.
With support for the Conservatives plummeting in rural areas that were once considered their heartlands, the Prime Minister had taken to the stage at the National Farmers’ Union conference in Birmingham to pledge millions of pounds in support.
In an apparent bid to shore up faith ahead of a general election, he vowed the Government would “never take food security for granted”.
Less than two months on, that promise is already being questioned in the countryside.
Farmers have raised the alarm about a new inheritance tax break for landowners that they fear could end up damaging the UK’s ability to feed itself.
Under planned changes from 2025, landowners who convert agricultural land back into forest or other wildlands to boost biodiversity – a process known as rewilding – will be eligible for the tax relief.
It has sparked fears that rich landowners could prioritise rewilding over food production – putting already stretched domestic productions at risk. It comes on top of existing subsidies to encourage more rewilding by farmers themselves.
“With current sustainable farming incentives we are being driven down the road to take good productive land out of production,” says Jo Hilditch, managing director of Whittern Farms in Herefordshire. “They are simply trying to appease the green voter and the activists.”
Unveiled in March’s Budget by Chancellor Jeremy Hunt, the new inheritance tax break is part of the Government’s push towards net zero.
Rewilding large swathes of the country by planting more trees and bushes, for example, could help to suck more carbon out of the air and reduce emissions. It is hoped that it will repair nature: the UK is one of the most nature-depleted countries in the world, according to official figures, with one in six species facing the prospect of extinction.
The change is also a boost for billionaires: some of the UK’s biggest and richest landowners will be in line to benefit from the new rewilding tax break.
Danish tycoon Anders Holch Povlsen, the Tetra Pak heiress Lisbet Rausing, and the entrepreneur Christoph Henkel have all unveiled plans to rewild vast swathes of land across the UK in recent years.
Povlsen, who is the biggest shareholder in Asos, is Scotland’s largest landowner with more than 220,000 acres across 13 estates. He owns Wildland, a rewilding initiative that wants to restore large swathes of the Scottish Highlands “to their former natural splendour”.
Rausing, meanwhile, backs rewilding projects through her fund Arcadia and has spent millions on projects in Europe. With her sister Sigrid, she owns 100,000 acres of land in Scotland.
Henkel, who is worth an estimated £1.2bn, recently bought 13,000 acres of Scottish land with plans to rewild portions of it.
The financial impact of Hunt’s new tax break is minimal. The Treasury expects it to cost around £5m in 2028.
But farmers fear it could have a disproportionately negative impact on agriculture by encouraging landowners to kick farmers off their land. Just under half the UK’s farmland is tenanted, according to government data from 2022.
“As an island nation with limited land, it’s imperative we strike a balance between maintaining domestic food production, delivering for the environment and many other land use needs,” says Tom Bradshaw, president of the National Farmers Union.
He worries that the tax change could encourage private investors to start buying up land in order to access various environmental subsidies offered by the Government.
“It would be particularly concerning if this wider extension encouraged tax-motivated private investors, with no interest in food production, to buy agricultural land and take it out of production,” says Bradshaw.
There are already worries about the future of British farming. Just under half of the actual food on plates is produced in the UK today, including the majority of grains, meat, dairy, and eggs.
However, financial stress and a growing burden of red tape threaten to lower this figure and increase reliance on imports.
Simon Roberts, the chief executive of Sainsbury’s, has warned that ministers are enacting a “well-intentioned but inconsistent” policy on farming that is damaging food security.
Writing in The Times, he said: “We all recognise the need to make our food system more sustainable, but the current approach risks inadvertently reducing the level of UK production. This will affect capacity here and lead to more imported food — which of course is less sustainable.”
Ministers have replaced EU subsidies with new, post-Brexit green incentives known as Environmental Land Management schemes (ELMs) as the UK pushes towards net zero.
However, the transition to ELMs has been hampered by delays, confusion, and contradictions, leaving many farmers claiming they are unable to invest for the long term.
“Farmers are part of the solution for this, but we should be treated with respect for the thing we do best – produce food,” says Hilditch.
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Some also have doubts that these new farming policies will yield the intended benefits to the climate.
“We’re producing meat in Europe, in a relatively environmentally friendly way,” says Jack Ward, chief executive of the British Growers Association (BGA). “At the same time, Brazil is going flat out destroying rainforests, to make good the gap that we are leaving by moving towards an environmentally friendly system.”
Hilditch says: “The last thing we should be doing is relying on cheap imports where we are probably just kicking the can down the road.”
Ward adds: “The idea of saying to people, if you take out big blocks of land [for environmental purposes], we will subsidise you to do that – are we going to, in 15 years’ time, be subsidising people to put it all back into production because we didn’t think it through?”
A Government spokesman said: “We want to see food production and the environment go hand in hand.
“Extending agricultural property relief to environmental land management ensures that farmers will be able to deliver, alongside food production, significant and important outcomes for the climate and environment.”
