FISCAL FISTING FOR FARMERS AND SMALL BUSINESS OWNERS

[00:00:03] Speaker A: Good evening, everyone. This. This. This episode is like a reactionary one because we've just had a budget announced by the government today in the uk, so it affects farmers a lot. So we decided to speak on it or speak about it, and we've brought in an expert in. In money, an accountant, the name of Sophie. And, yeah, so we'll. We'll chew the fat on this this evening, but before that, we'll do our usual. If, you know, it's not a normal episode, we do our usual good, bad and ugly. Or would it be ugly? Ugly, Ugly. Considering what's come out of the budget, which would you want to take? [00:00:48] Speaker B: Well, I'm gonna say if you're gonna. You go first. Welcome back. [00:00:51] Speaker A: Good morning, ugly of your day today. [00:00:55] Speaker C: What about the good of my day? Good. Yeah, yeah, My good. Probably only four shits in the parlor today. [00:01:05] Speaker A: Only four what? [00:01:06] Speaker C: Four shits. [00:01:08] Speaker A: What, on you? [00:01:09] Speaker C: Not, not on me today, but four shits in total. Whole milking. Pretty good going. That was. [00:01:15] Speaker A: What do you normally get? [00:01:17] Speaker C: 20? Because they're still on grass. [00:01:19] Speaker A: What? [00:01:20] Speaker C: Yeah, like. And the normal ones do it. [00:01:23] Speaker A: It's like a normal projectile. [00:01:24] Speaker C: Yeah, old projectile. Yeah. They're still on rich grass in the day, so I'm sure Neil's had worse today. [00:01:32] Speaker B: I've had, well, in the ship now I just end up with bits of hoof in my hair. You don't have to live with that anymore, do you now? So if, you know, there was one time when Tom would come home and you'd find hoof everywhere and you're like, where is this coming from? Yeah, and I am. And I'm still there, like, you know, my partner often says, like, well, how's it got in the bathroom? Well, it just gets everywhere. [00:01:51] Speaker A: A bit like straw. [00:01:53] Speaker B: It does, yeah. Yeah. [00:01:55] Speaker A: So what were you going for, bad or ugly? [00:01:57] Speaker B: Well, you know what, considering today is a pretty ugly day, I'm going to do another good. And it actually is today I had the pleasure of calling in for a quick pint in the Farmer's Dog Pub, which is owned by Jeremy Clarkson. And fair play to the man, he has created something now that is unbelievable. You know, people queuing to get in, parking in the field opposite to get in there, and paying absolutely top dollar for some fantastic local produce, beer, cider. So, yes, incredibly, incredibly unbelievable, really, just to sort of see it. I've never seen it before. I've never been to Diddley Squat Farm Shop. And to go and see it firsthand was actually quite like a bit of a wow. Because you Know, you see it on telly, you see everything. I sort of roughly know Caleb a little bit just from similar area and I look after the cows that the milk goes into the vending machines there. And, yeah, it was pretty. Pretty astounding. So, yeah, big, massive kudos to Clarkson for what he's done because he has created something there that is great. And you've got a pub on the side of the pub as a huge sign. That's the full length of the pub and it says. All right, it says Hawkstone and it says back British Farming. And you can't fault that. To have that on the side of a main road on the A40 is fantastic. [00:03:20] Speaker A: Love it. [00:03:21] Speaker B: So, yeah, I'll take an. I'll take another. Good. [00:03:23] Speaker A: Because I'm gonna have to do a hat trick here because the episode is going to be fairly ugly, so might as well go with that. We'll go with a third. Good. I finally managed to butcher up some pigs yesterday, so I'm gonna be fully stocked again on an online shop. I've struggled with stock since I did a market like two weeks ago because I sold out and I've just not had a chance to top up the supplies. But as of tomorrow morning, Halloween payday, people can stock up on Ginger ninjas. [00:03:57] Speaker C: Nice. [00:04:01] Speaker A: The budget, I mean, so I've been working all day, so I've not had a chance to look at it properly, but we've got. I've got a window here with. With the key points. Got back fed, the pigs cooked. So, yeah, I've literally not sat down properly and had a look. But from what I'm hearing from many farming friends, and one of my colleagues actually is a farmer, farmer's daughter. And, yeah, she's not happy. But from the bits I've heard briefly, the main thing is that the fact that the inheritance tax has been. It was tax free before, wasn't it, on agricultural land? [00:04:41] Speaker C: Yeah. So now, yeah, APR relief is what they call it, agricultural property relief. And including the house, if, like the farms too. And we've seen land prices increase ridiculously over the last period of time. Like, especially since COVID I don't know what it's been like with you guys, but land prices have gone up ridiculously. You know, you're not buying a farm under a million pounds now. You know, it's. It's pretty. So setting, like the new level at a million, I mean, that's not really going to cover anyone. So the first million is free, but after that, 20%. Well, I don't Know how that succession is going to work, passing it on to the next generation. Now I just. [00:05:24] Speaker A: So with that, and that's what my colleague was made very clear. That's the main point of contention. I'm not a landowner yet. Hopefully if I'm successful I'll get some land. Is there like some sort of clause? Because with normal inheritance tax, with people that aren't farmers, do you always pay tax on inheritance? So if, let's say you I inherited my parents house, I'd pay some form of tax or not regardless of the value of the house or is there a relief? [00:05:54] Speaker B: No, there's relief on it, isn't there? So basically you can have half a million pounds worth of. The best way to describe it. So you and Nick here, okay, you're married, right. And you own a house and your house is worth say £500,000. Yeah. And you've got £300,000 of assets. You both got half a million pounds worth of tax allowance each. Okay. So unfortunately you die, Nikki. Sorry? You die Flav. And you leave it to Nikki. Well, you've, you've used your half a million pounds so you're fine. And then Nikki still got half a million pounds. So you don't pay any tax. Okay, so you don't pay any, basically any tax over a million pounds. Yeah, that's basically how it works. So, so it's a very, very, very small percentage of the population that would have to pay tax. Does that make sense? [00:06:44] Speaker A: Yes. So this is my thing that the fact that like farmers have always had that. Farmers have always had that apr. Also what I'm looking for, they've been exempt on agricultural land and then now they're not. Why. Oh, here we go. Areas. He's back. Listeners. The, the third prong has just entered the. Entered the chat. Where have you been? [00:07:15] Speaker D: Good evening. We've been a really random event at Raby Castle in the northeast. I didn't really know what it was. [00:07:26] Speaker A: Involving but what were you doing there? [00:07:30] Speaker D: Yeah, so the kids had a great time. Anyways, we were hoping you're going to. [00:07:35] Speaker C: Say you've been in government today for the transition. [00:07:38] Speaker A: I think I'd be locked up causing havoc. Yeah. So I was. [00:07:43] Speaker B: We're just talking, Chris, we're just basically starting. Just talking about the APR stuff. [00:07:48] Speaker D: Yeah. [00:07:48] Speaker B: So we just did a little bit of basic thing about, you know, how, how. We're just talking about how that, how it was and how it is going forward. [00:07:54] Speaker D: Yeah. [00:07:55] Speaker A: So for, for a non, a non farmer or non agricultural land owning person, if they were to ask, so I'm gonna play that person because I don't own any land yet, like I said, yet. Why? Yeah, so what? Why is it a big deal? Like other people that aren't agricultural landowners have been okay with the way things have been going and they've not been benefiting from that exemption of tax on agricultural land inheritance. So now people will have to pay tax on it. Why? As a, as a non, non farmer or someone that doesn't own land. Why, why the big deal I think. [00:08:39] Speaker C: Is the value in the farms gone up so much and also being able to follow a lot of these people who worked on farms for very little in the idea that the farm might be passed down to them. Does that make sense? So like that, that's part of it. And keeping a farm in your family is going to be very difficult. That kind of money, if we're talking, you know, 2 million pound farm, the second part of that half of that is subject to 20% and who, you know, farming is what we all know this is so marginal anyway. [00:09:14] Speaker D: Yeah. [00:09:14] Speaker C: Where's that money coming from? You know, a succession, you know, succession, it can't just be passed on the generation. This is generations and generations of farmers who are going to be affected by this. And it's just, yeah, you're just sort. [00:09:29] Speaker D: Of taking the incentive away of passing that asset on to your next gen and giving them the chance to have to farm as a lifestyle and have that asset. But it just makes it almost impossible on, on those margins for some of those and also some of the guys, that land has gone up so much. If land did drop and they bought land at say 10,000 pound an acre, they struggled to service that debt. [00:10:00] Speaker C: Exactly. [00:10:01] Speaker B: I mean I described it in layman's terms to my 11 year old daughter a minute ago because we were talking about and she was asking, and I use one of my farms as an example because she knows the farmer, I said look, this farm, you know, I think it's about 250, 300 acre dairy farm. They're milking 240 cows for robots. Incredibly good farm, really good, invested massively. But I sort of said, well when they're the parents, you know, they die effectively, you know, their children are going to go and find probably £800,000. [00:10:32] Speaker C: Yeah. [00:10:32] Speaker B: To pay the government in tax. You just think how on earth they haven't got £800,000 in that business because they've invested continually in the farm, they've invested in infrastructure, they've invested in technology, they haven't got. Not many farmers do have £800,000. And that's a small farm. That's only two or 300 acres, you know, and that. And that's the thing. It's just. I just. Yeah. I mean, I'm not a farmer. I mean, will it affect me? I don't know. But it just. It just. It just doesn't make sense. [00:11:05] Speaker C: No. And I mean, I don't know if you guys saw in the. Sorry to take it down as, you know, a pretty horror story, but a chat I think two days ago, committed suicide because of this, just so that he could get the. It passed before this came in. And, you know, this is a real loss. [00:11:24] Speaker A: I saw that on the farming forum. That's madness. I think aside from whatever we talk about here, because I know some people this will affect, like that family. This would be such a. Such a raw thing to talk about, even listen to us during the fight over. But it's madness that whoever in government, whatever people sit there and discuss this before Reeves comes out, holds that box that looks like an LP player out there to say, this is what I'm doing. There must be people there. Like they get paid enough to think about all these. All these what if, what if, what if? And clearly they didn't. And to have someone, a family to lose a dad just because he. Just so that he can. He can help the family essentially not pay that. That's nuts. Doesn't mean they're thinking about. [00:12:24] Speaker C: Yeah. The risk of that is generations. A ripple of that death. [00:12:31] Speaker B: It's just bonkers. [00:12:33] Speaker D: But there's lots of other things there that are going to affect farmers. You've got the employers. National insurance has gone up like minimum wage. Yeah. Capital gains tax 24, isn't it 10 to 18%. [00:12:50] Speaker C: Yeah. [00:12:51] Speaker D: Like there's. It's. It's not just that. It's. It's everything that. And you do think is this, is this. Has this been a bit of a. An error in. In by some of the agricultural lobbyists as well? [00:13:07] Speaker A: Like it. [00:13:08] Speaker D: Has this. Have we missed a step here? Like what, what have we been doing the last four or five months with this new government? Like for the. For this to happen. Like, you know, my thoughts on sort of marching and, and I'm not the biggest fan of farmers sort of protesting, but I think this, if ever there was something where everyone needs to come together and really show the government that this is just. This is just not on is. Yeah, I think, I think this is the time for everyone to come together because I Read a comment from the preceptory, Steve Reed, and he, what did he say? Something like, farmers will just have to learn to do more with less. And that is the death free secretary. Ridiculous. [00:14:02] Speaker C: I mean that's what we've been doing for generations. [00:14:08] Speaker B: It's crazy. I mean, going back to the APR stuff which I think of. Concentrate on that for a minute and you look at all of that. I mean, also, I mean like Chris, your family is a tenant, am I correctly saying, on a tented farm, aren't they? [00:14:20] Speaker D: Yeah. [00:14:21] Speaker B: So how is that going to affect, know when your landlord, you know, dies and he has to pass that on or do whatever he does, there's going to be a massive effect there for tenanted farmers, aren't they? Because these estates, all of a sudden you, you're going to be going back a long time, you know, in history where you had like massive estates that were broken up because of death duties. There was a big thing, wasn't there, in the 1800s, around death duties. And we've almost gone back to those times because estates like yours, Chris, you know that. How is that going to affect those sort of places? [00:14:52] Speaker D: Oh yeah, well they're gonna, it's gonna be back to like the sort of years ago when estates had to sell stuff off for inheritance tax. It's just gonna, it's just gonna happen again. And a lot of farms aren't going to be able to, to, to be able to especially with, with tight margins the way they are. And, and there'll be a lot of farms like us that nowadays really there isn't, it isn't a clear line between sort of owned and tenanted land. There might be farmers most, well, quite a lot of tenants have probably bought land as well as they've gone on, which will then be affected by that as well. And it's, yeah, it, it's with, with especially that all that's going on with, with legislation on, on sort of carbon policies as well. A lot of farmers must just be sat there tonight just thinking, why the hell do I bother? Like, what is this all for? Like, am I. Because if I've even got a son or daughter that wants to enter the business, like, am I, am I doing the right thing in carrying them on? Because is there a future for them? And if this carries on, then yeah, I don't know myself to be honest. [00:16:18] Speaker C: I think there's a really strong message right now from government on respect. I don't feel like it's, it's actually like the respect of a role of a farmer in society right now that just doesn't come out with that at all, like. No. And I actually was, I am the head at the Farming Minister, Daniel Zeitner. He actually, I really liked him and I think he's, I think he's actually very good. But I think I don't know what's happened between then and this, that box coming out because I am, I'm actually really shocked when there was rumors around that apr. I was like, oh, it will never happen. I was like, it will never happen. We're talking about food security, we're talking about next generation. Talking about all of those things really actively in the press and everything. And you've just come out with this. But just. [00:17:07] Speaker B: I'm shocked thinking about it like, you know, from a dairy business you could have a, you know, a farmer that's in his 50s or 60s, say and the children are involved with the farm and they've made a decision that they're going to invest in infrastructure. So whether that's dairy, whether it's like someone you're dealing with, Chris, you know what, we're going to put some poultry houses in. We're going to borrow, you know, we're going to borrow a million quid over 25 years or something like that. Take a mortgage out to do whatever this massive investment structure is. All of a sudden that, that's like, well, hold on a minute. Because you've got to factor in that when the parent dies that there's going to be some inheritance tax to pay there. So that's going to have a kick on effect with your type, potentially your types of business, Chris, you know, and everything and borrowing and banks and finance and everything like that. It's just, it just keeps going. [00:17:55] Speaker D: I do feel for the bank managers and the accountants today as well. Like they must be just absolutely inundated with, with quick questions. And again, a lot of this, a lot of the devil is going to be in the detail with this. There is like as, as much as it looks doom and gloom there will be for those that can really sort of plan ahead. But what happens with a farm, for example, if, if the farmer died suddenly then they would have nothing in place at all. [00:18:31] Speaker C: So it's, yeah, it's going to change the tenancy market as well because a lot of these. Thank you, Chris. I think your family have got. Is it a generational tenancy? [00:18:42] Speaker D: Yeah, it's a three generation fbt. [00:18:45] Speaker C: Yeah, exactly. So like that won't be able to be changed and altered because a lot of These. A lot of these estates are in trust. [00:18:52] Speaker D: Yeah. [00:18:52] Speaker C: And so like that. What they got the in APR on tenancies, if that made sense. So, like that would have been allowed. If it had been tenanted out, they still would have had apr. Well, unless it's actually actively being farmed now. There's not. That changes the whole landscape for a tenant as well because they're. The landlord's going to want a totally different agreement. [00:19:14] Speaker D: Oh, yeah, yeah. [00:19:15] Speaker C: And we're talking carbon farming and that's going to come in and we're gonna. It might be more profitable for them to do other things with it. [00:19:22] Speaker A: So a point you make there, Sophie, about the respect and how farming is not seen as a serious job. I've said this I don't know how many times that when they and Chris mentioned it briefly there about sort of going to streets or whatever, when they're French, we're doing some stuff and Dutch or whatever. Aside from those mini groups that were meandering in into farming thing to push their agenda, we know who they are. Aside from them, they're core like their farmers. When we see them doing that, we hear like, nice, not too bad here. It's not too bad. Well, guess what, it's bad now. And until. Until the day. I've said this so many times. Until the day. And English, because. Does this just affect England? Does it affect Wales? It's just England, this, isn't it? The budget. [00:20:14] Speaker C: Yeah, yeah. That will be the whole thing. The API. [00:20:20] Speaker A: Yeah. So the. [00:20:22] Speaker C: It's the subsidy that is bring fence. So whales. [00:20:25] Speaker A: Yeah, yeah. [00:20:26] Speaker C: System and things in us. [00:20:28] Speaker A: So until. I've always said, until the day a British farmer feels uncomfortable like today, we're not going to do anything because when. When something squeezes here. Well, I'm still getting BPs. That's going. Always something. Oh, I've still got Countryside stewardship scheme. Right. That's going to get phased. But some girls say, oh, I'm still getting sfi. But now this one, this one's gone into the core. People are gonna feel this in like right in there. So I'm hoping finally we're gonna stop being all nice and I see and gentle and just tell them like it is. If it means. [00:21:00] Speaker D: Yeah. [00:21:01] Speaker A: Going out there and causing havoc for them to listen, then why not? And I said this way back when, when we were doing anything about like supply chain fairness or whatever. But a point I was going to make there. Back to two points, actually. One is saying about the farming that's going to be hard to take from generation to generation. Does that mean then potentially British farming, we're gonna. It's gonna be less sentimental, like, compared, let's say to New Zealand, because I've got friends in New Zealand that, let's say mates that are engineers or teachers. Their parents are farmers, but they don't care, care about the farm because they parents will sell it, they'll get the money and it's not like it has to be passed down. Same with dairy farms and share farming there, etc. And then the other point I was going to make, we can discuss all this after the second one is farming margins, which we've all mentioned about margins there. Will this then finally make farmers push for better margins? Because if now we're getting squeezed on inheritance as well, we'll be like, oh, but we're running businesses on small margins, which is seen as a norm. The fact that farms can run on small margins is seen as a norm. So are we going to get to a point now that farming is actually okay if a doctor has to work to a profit, if a hotel owner has to work to a profit, if airlines have to work to a profit? Are farming now going to farming business is now going to be seen as a serious job and people having to work on serious profits rather than just constantly scraping, scraping the barrel. [00:22:33] Speaker C: I mean, your final point, that would be nice. Like, I'd love it, but I. It's so, like, so much of it. Well, in the dairy industry, I can't speak for your sector, but is so much global now. We're so exposed to global pricing and supply and demand. So it just, it puts us at more of a disadvantage, if that makes sense. If we're going to incur this additional mean. I'm a tenant, but it will, it will definitely directly affect me because it will affect my landlord. That just put me at more of a disadvantage on a global level because a lot of the milk prices now are done globally. It's actually, even if they're like a cheese product, you know, say barbers or W, like a production like a British, they still get pricing from global level. So it just puts us at more of a disadvantage. And with you, it's very difficult with a scale of business, 2 million liters to do something with, if that makes sense. Like, it's a fresh product. You can't be like, oh, I'm just gonna, I'm gonna just make cheese suddenly, or I'm just gonna, you know, it's just a lot, a lot of milk even, you know, even a smaller dairy would struggle to suddenly switch into selling direct or it's a big investment, if that makes sense. It would be nice. The sentimental thing, I don't know how you feel about that. I mean Chris, do you. Are you sentimental about your farm even though it's tenanted? [00:23:53] Speaker D: Oh yeah, yeah. I think most tenant farmers would. Yeah, it's, it's, it's where you live and, and like most tenant farmers we've invested a lot. It's. The farm is unrecognizable from, from when my family sort of took it on. So yeah, I think it's just a. Yeah. Tenant is just a label. But I would say every tenant farmer I especially on longer term tenancies really treat it as a home. If you're maybe on a five or ten year tenancy, it's different. That's something I think is wrong with a lot of agricultural tenancies that maybe land agents especially are looking at things too short term and things are getting ripped and pillaged because farmers can't afford to invest. But those are long term. Yeah. Treat it as their own and look after it and yeah, it's, yeah it is, it's. I think I can't, I can't get my head around as well with this where the, with that 1 million threshold they've done like that pretty much just means that because I think animals are seen as an asset and any like equipment is seen as an asset. So really the only people that this wouldn't affect is if you were literally a hobby farmer with 20 acres with about 20 sheep and a house with it. So there isn't even anything for like to, to even help the really small farmers. And, and I think one thing we've probably agriculture's got in our, in our benefit today is actually this budget really affects the sort of the real working class people with these like the biggest height tax even a lot of the labor, staunch labor supporters are going to be sat at home tonight thinking bloody hell, how do I afford to feed my family and stuff. It really like this trust got a lot of criticism for her budget but. [00:26:10] Speaker B: This is next level nice and another level from Liz's but I mean like going back to like sentimental and stuff. What you said Flav. I think you know the. I've got friends in New Zealand and stuff and I think New Zealand's a different market because a lot of corporate business owned land in New Zealand, it's very, very, very different. So I think a lot of the family farms have been lost in New Zealand. A lot of a Lot of farms have been taken over by big corporate enter. I think the government somehow thought that there are a lot of corporate businesses in the UK and I think there probably is corporate business in the UK buying land to avoid taxes and using loopholes. And I think that is happening. So I think you have to be aware that that is going on and there is businesses that are going out and buying land just to avoid stuff. But the percentage wise is tiny. But I think they viewed it that that's just the standard, what everybody's doing. And I think, you know, somebody. A small family farm, you know, farming a couple of hundred acres, you know, on the Facebook. Yeah. That farm might be worth several million quid or four or five million pounds, but it. But they haven't got that. It's just. It's just bonkers. It really is. It's just. It's crazy and I think something needs to change on it. But then I think the next sort of. The next big thing that affects it is the. Is this minimum wage. I think this is absolutely massive for farming. [00:27:38] Speaker D: Yeah. [00:27:39] Speaker A: Neil, before you go to minimum wage, quick. Yeah. You compared. Liz Trust there. I. I can't believe we're referencing that human l Trust. [00:27:51] Speaker D: I know, but this week, careful what you wish for. That's all I would say. [00:27:55] Speaker A: But no, no, Chris, that's what I'm saying. The question. The question I was going to ask there is. And this is. This is beyond whether someone's blue or red or green following or whatever. And I think this is a bit of politics I'm still getting my head around in this country, how it almost seems like a family thing, whether you're conservative or whatever. People always say coy about discussing politics openly. Whereas in Kenya, I remember growing up, my dad would discuss politics with his mates to the point of almost punching each other and then they just be fine because it's like talking about sport. [00:28:32] Speaker B: You. [00:28:33] Speaker A: Chris might. Who you just bought again, Chris. Liverpool. [00:28:35] Speaker D: Yeah. [00:28:36] Speaker A: Yeah. I sport Man United. Neil supports what? Birmingham. [00:28:41] Speaker B: Yes. [00:28:41] Speaker A: Yeah. And we might not see eye to eye when talking about football, but we're still friends. So anyway, I think we can't forget. [00:28:49] Speaker D: That's why. [00:28:50] Speaker A: Yeah, I'm definitely not. Neither is Neil. Neither's Neil. [00:28:55] Speaker B: We're coming. We're building up. [00:28:58] Speaker A: So the question is this matters. Like at the moment we could. It's so. It's so easy to be like, I can't believe labor doing this and a lot of friends. I know that conservatives or people that vote conservatives will be loving this because it's like, look, you voted. Even seeing comments already, people are, oh, you not voted Labor. But then we're forgetting what they've, they've come in, what they've walked into. So whatever the situation that was left for them by conservatives, they now have to find money from somewhere to try and rectify to go forward for their term in it. And we mentioned this before coming board episode. It was saying I would be good if there was like long term plans for any government coming in that, okay, this is a 10 year plan for food, for transport or whatever and if you come in, you don't have to change it to put your mark. It has to go like that for 10 years and then you go on. And I think that will probably avoid things like this because currently it's almost like, oh, they did this. We're gonna come in try and fit like the private school tax or, or some of the other bits that they put on there. I think we can't forget the mess that they were left with. [00:30:08] Speaker B: Yeah. [00:30:09] Speaker A: Not saying what they've done is good. [00:30:10] Speaker D: A lot of that's like a lot of the debt was caused from COVID Yeah. [00:30:16] Speaker A: By who, who was in there then. [00:30:17] Speaker D: Yeah, I know, I know. But like most countries in the world are in. Are in. [00:30:22] Speaker A: Yeah. [00:30:23] Speaker D: Because of that. [00:30:24] Speaker B: It is because of COVID And I think, you know, you've also. Yeah, go on, Chris. [00:30:29] Speaker D: I think a lot of this stuff, like I haven't always been his biggest fan, but I think Rishi Sunak's address today was really strong. Like he really did tear Keir Starmer a new one today. Like it was. He pulled apart all of the sort of pledges that he made and I think that is where it is. I think what he said in the run up to the election, he has promised things which he wouldn't do and he's gone back on a lot of them. And it reminds me a lot of when we had the coalition government with. I can't remember the. [00:31:11] Speaker A: Cameron. Cameron and Nick Clegg. [00:31:13] Speaker D: Yeah, Nick Clegg. Yeah. [00:31:14] Speaker A: Like Nick Clegg promised like a shadow. I don't remember him doing anything. [00:31:20] Speaker D: He went back on everything he said and that today really reminds me of that. And I think he will have lost, especially with the, the sort of two year argument that was already there. Yeah, I think. Yeah, yeah. I think we'll struggle to ever have seen a Prime Minister in his first three or four months premiership to, to be that low on confidence. And I think it's. Yeah, I'm. I said to you at the Time. I think the Conservatives. Yeah, they were. [00:31:54] Speaker A: What about Liz Truss? [00:31:55] Speaker D: Good for agriculture especially. Packet politics, wasn't it? But yeah, I'm pretty positive to think we wouldn't, we wouldn't be in this situation today if Rishi was still there as bad. But yeah, that's, that's my own personal opinion anyway. [00:32:21] Speaker A: Yeah, you get there, Sophie. [00:32:23] Speaker B: Yeah. [00:32:24] Speaker C: I'm just getting a charger on and it keeps playing this music. [00:32:32] Speaker A: It sounds like a horror. It sounds like a horror film music. [00:32:35] Speaker C: I can't stop it now. [00:32:37] Speaker D: You want to work it out cuz. [00:32:39] Speaker B: You'Re like Christmas decoration shining. [00:32:44] Speaker D: You're not Christmas decoration, please. No, I'm. [00:32:49] Speaker C: I'm going to prop it up with some books now. That thing is driving me mental. There we go. [00:32:55] Speaker D: Just tell me not put the Christmas decorations up. That may have been a joke. [00:33:00] Speaker B: No, but I think. Yeah, I think, I think, Chris, you're right and I think a lot has to be. Covid has a massive effect on stuff, you know, huge. And I think the other thing I remember in this country there is some like. And this comes, you know, we'll move on to after. You know, talk about minimum wage. It links into it. But I was reading some stats the other day that there's like 9 million people. One in nine people are on sort of disability living allowance. There's been a massive shift from, you know, people because it's harder to claim, you know, unemployment. They go on to this disability and they'll claim something and you think, wow, one in nine working people are not working for some reason. That. Yeah, that's horrific. And in Wales, in the Valleys, it's one in four. So one in four people in the Valleys in Wales are claiming disability allowance and not working. Like people of working age who. We've got 9 million people that probably, yeah. Percentage of those can't work. I accept that, that's fine. But there will be a chunk of those people that can and they're choosing not to. And I think there's. There's some massive things here that it's a really easy fix for the government to turn around and say, do you know what? That hard working farmer there, that's worked for generations, you know them. We'll have a bit of that. Because the easy, you know, because that's an easy fix that gets money straight away and where the harder fix is actually to solve some of the problems within our society. And that's incredibly difficult. [00:34:29] Speaker C: That's really interesting, Neil and I know Flav, you feel quite strongly about this as well, is that like I feel like farming and food is such a solution to so many problems in our society that actually you're now penalizing us with something that we actually can be a solution like the health of the country is very reliant on the health of the farming of the nation. You know I really. It can be, you know, if we get this right and we you know, educate people about where the food comes from, we teach it in schools, we get kids out on farm, there is so much we could do with that. But now actually we're going to be less likely want to. Want to do that. If you're penalizing us in another way, how are we going to get enthusiastic about having these things and influencing in a positive way? You're just stamping on us. [00:35:13] Speaker D: Yeah. [00:35:14] Speaker A: So just looking at some of these key bits from this budget on the Guardian which is quite reputable I'd say. I saw earlier that the defense money is 2.9 billion increase in military spending. Right. And for NHS it says it is going to be a 10, it's promised a 10 year plan. Well what's the promise? Promise a 10 year plan for NHS and it's announced that it'll be 22.6 billion increase in the day to day health budget and a 3.1 increase on the capital budget. So if we're just going to look at just the. And then that includes 1 billion for repairs. Have you been to hospital lately? [00:36:05] Speaker B: Yeah. [00:36:06] Speaker D: 1 billion. [00:36:06] Speaker A: Yeah. For repairs and you're putting 2.9 for defense and then you've got here 1.5 billion for new beds in hospital and testing capacity. When, when Noah was born last. Pretty much this time last year, a month out, we were in hospital for three, three, three weeks. Two different hospitals, quite big ones. One in Portsmouth, Princess or Princess Anne and I think it's coming what the other one's called but big hospitals and you look at the facilities, even you talking to the staff because we're in there long enough like on first time base, first name basis some of these people and I'm like how do you not work in here? The food is, the heating, some places doesn't work the beds. I slept in a bed for a week that while staying with Nikki it was asleep on an ironing board. And yet you've got a billion for repairs and 2.9 million in defense. Like why do we have to. I know we as a country have to protect ourselves but we're protecting ourselves and you could argue because we've gone somewhere and caused havoc and then now we come back. Yeah, let's sit back here and wait for them. [00:37:13] Speaker B: It's. [00:37:14] Speaker A: Oh, my God. [00:37:15] Speaker B: It's a different argument. [00:37:17] Speaker D: All this stuff's going on. And again, like, she's committed more money again today to HS2. [00:37:24] Speaker B: I thought they canceled it. [00:37:27] Speaker A: Yeah. [00:37:28] Speaker B: From Birmingham North. [00:37:29] Speaker D: 12 billion overspend already. And I think she's committed another 4 billion to take it to Houston. [00:37:39] Speaker B: Houston. To tunnel it to Houston. Yeah. Because at the moment it finishes away. I mean, that's a whole. There's a whole new podcast. I've got some good friends farmers. Because that's my part of the world. [00:37:51] Speaker D: You know, I remember when I worked for the nfu, that Birmingham to London train ain't bad anyways. It's not. [00:37:59] Speaker B: No. [00:38:00] Speaker C: It won't be on time. [00:38:01] Speaker B: Well, Chris, you. You lived in Stony or just outside Stony, so if you can imagine your NFU building. [00:38:07] Speaker D: Yeah, it goes right through it. Yeah. [00:38:09] Speaker B: Literally not next to it. It is phenomenal. It's like. It's like somebody's just got like a. An angle grinder and just shoved it down the countryside and just put huge, big gash. But that's a whole different thing. Minimum wage, that's going to have a huge, huge impact on farmers. I think. Sophie, you made a good point, Hilly, when we were talking, because we both, you know, both got backgrounds of being herds people. Herdsmen. That's bonkers. Because all of a sudden people who work on farms on salaries, that's going to be. That's dangerous territory. [00:38:43] Speaker C: Oh, yeah. It will be unachievable with the hour per hour. We're gonna have to be very careful as an industry that that's being worked out that we are equal. The right amount. I mean, so people. The right amount anyway. But it's an increase that. I don't know where that's coming from in the margin. Like, I'm. I want to pay my people fairly, but I, you know, for an apprentice, when you're putting a lot of work into them as well, they've increased that. I think it was £7 50. It used to be like £5 something. [00:39:13] Speaker D: But you're doing 7.55. It is. [00:39:16] Speaker C: Yeah. Yeah. Well, that is, you know, that's a big increase. And yes, I think people should be paid fairly, all of those things. But to. It's a lot of work having an apprentice. Like, I don't. I can't. Yeah, I love having a print. We always have one on farm. But I. It is a lot of work. Like, it's a lot of work. [00:39:33] Speaker A: So I will go back to margins. Props up again. So how about after they've done their budget and they can clink their glasses tonight, blah blah, whatever. They should probably organize a meeting somewhere and have heads of farming. Probably not just the organization because we know some of them aren't as useful as they should be. Have some heads of farming there. Have heads of supply chain as well. And discuss this because whenever we talk about margins, who's the one that's pinched every time? It's a farmer. So we like currently we're worrying about your standard cost, the usual cost of production, what you pay yourself. Some people don't pay themselves. Like our friend Johan said on Twitter once, how he puts himself like two pound fifty an hour which is nuts. Like I'm not, I'm not doing that. If, if, if my whole tendency is me earning two pound fifty an hour, I'll quit. I'm not doing it. I'll go earn money somewhere else. Less stress. Yeah. And then you've got to worry about weather. You've got to worry about your health, mental health. I know other people do too. You're going to worry about how much you're going to pay people. Then when it comes to being paid by your customer, you know you're going to possibly be just about making money or making a loss. And then it's like how, how does it work? [00:41:02] Speaker D: Yeah, but as well, just but as well. So our margins are going to be pinched. But then you look at it from the processor point of view as well. So some of these big processes employing a lot of people, they've just had a huge hike on minimum wage. They've had a, their business rates are going to double. So that, that also has a. Well, it's a big knock on effect for farmers as well because that means that they, they're gonna, there's even going to be even less at the profit to pass on to the farmer because they, they've really been pinched. So in an industry that's already. Yeah. Margins are unbelievably tight. The, this will, yeah, this will have a big effect on the processes and stuff today as well. Especially if you employ some of the numbers that some of the, like Isla Raw or ABP or somebody like that, some of the big, the big guys that's. It's going to make a big difference this to their bottom line today as well. [00:42:08] Speaker C: No, you're right. It's is that it's every business out there, isn't it? [00:42:11] Speaker D: I just like what incentive is there for a young person Wanting to start their own business. Like, you must like some. Someone in university today, clever guy or girl, by thinking, right, I've got aspirations to start my own business and employ people. And yeah, it's, it's a bit like I was speaking to some Americans and, and I think one of the reasons Trump got in in 2016, whenever it was, was Barack Obama got was. Was very much associated with a similar thing of just losing connection with the business community. And, and that sort of was the main focus of Trump getting in. And it again seems in this country that we have lost that link to the business community, which is such a, which is such a key link for the government to be successful. [00:43:09] Speaker A: But then from, from the bits you just listed there, Chris, does it looks like in this situation nearly everyone's done like whether you're a farmer, whether you're just a general public, whether you're a big business owner, seems like everyone's stung. And I'm, yeah, the, the thing that I'm asking is that one, normally politicians will go one side or the other. Like conservatives are like, yeah, pro farming. Well, not profiling, but they'd always do things that if you're rich you'd benefit, blah, blah, blah. Whereas this budget doesn't seem to benefit anyone. And that just poses a question in my head that is it, is that how bad the country has got that we now have to almost like go from ground zero and work up or, or what? Because something had to be done. If the country is in so much debt or things aren't working, something had to be done and anything that was put out today on the budget, someone would have been stung. So does that mean then they just sting everyone and then you can all grumble or. Yeah, I just don't. Trying to get the logic in some of the bits that they've done. I'm like, don't. Yeah, I don't get it. [00:44:21] Speaker B: But I don't think it's just farming, is it? I think it's just across, it's across all businesses. You know, we're talking here about the effect that a 12 pound, the minimum wage will get effect on people getting up to 12 pounds 21. You know, you take any manufacturing business, you know, food manufacturing, things like that, where you've got operatives online that are on weekly paid minimum wage type things all of a sudden that then increases their margins. So like food manufacturing is a really good example because all of a sudden they've got to pay their staff more money. So what they're going to do, they're going to squeeze a person below them and the person below them supplying the raw products into food manufacturing is farming. And that's, that's the reality of the issue is that, you know, we are as farmers at the bottom of the, you know, everything goes up from us. And like you safe said earlier, if you're producing 2,3 million liters of milk a year, or if you're producing, you know, you've got 32,000 hens laying in a shed, you can't simply say, do you know what? We're just going to direct sell that. You can't do it. It's just not possible. Not everyone can do that. You know, Flav, you're in a credit for position that you found a niche, you're passionate about doing what you do and you can succeed in doing what you do, but the majority of farmers can't do that. You know, that's, that's the thing. And it, you know, and also there is, there is a saturation point. There's a saturation point with milk vending machines. There's a saturation point with any forms of vending machines. You know, the bottom line is that a farmer should be able to produce milk, beef, chicken, pork, whatever it is, sell it into the commercial market and make money. That's, that's, that's the difference. And when you've got all these things coming in now, it just makes incredibly hard. [00:46:06] Speaker D: Yeah, like, like I think I said when I came on, there's definitely been a failure from those representing the industry and the industry itself to make the government understand the rural sector and how important it is to protect food security like that. Yeah, really just, it just, yeah, it's just sort of been lost and. Yeah, like I said at the start, just what have these conversations been like in the run up to it? Surely some case studies on the impact this would have. I know it's been like, it's been rumored now for the last sort of week that it was coming, but yeah, it's. [00:46:58] Speaker C: I think it's got to this. Yeah, I, I do and I, I'm gonna, I mean, I do agree in some ways with you, but I do feel like Rachel, we, I mean, the ch. The Chancellor, she. I think she was going to do this no matter what came in. I think this was always. And not an easy win for them, but it, it's going to generate a lot if, if they action it in the way they're saying it's going to generate a lot of income. [00:47:22] Speaker B: Yeah. [00:47:23] Speaker C: And, and I feel like they I do feel like they definitely, I mean the farm, the bodies that are representing us have definitely been in there for a long time and that Daniel's has been sharing office, NFU office. And he has known exactly what on the ground. You know, on the ground it's looked like that's been fed through hard to him. But it's just that she's come out with that box like Fab said and, and I, I think I felt this last two weeks that it wasn't gonna happen. Like I really, I thought it was just a bit of a joke to be honest. And when they came out with it today that, that Apr. I just think, oh, I can't. Yeah. I don't know whether it would. Is there any going back now? I mean it's going to cause absolute chaos. [00:48:09] Speaker D: So if, I don't know if you've touched on it but did you see the, obviously in the dairy sector about the review on thresholds for sugar tax and they are considering extending it to milk based beverages. [00:48:24] Speaker C: It will be. Yeah, that will be another stab in the guts. Yeah, I feel it's mate. Yeah, people are just starting to return. So like there's some really good studies on people returning to dairy from other alternatives. Like 82% are returning back when surveyed and that's actually really good. And it's like me and Tom, we had breakfast this morning, like all of us, the kids etc, we've got the luxury of doing that because we work early and come in, you know, come in and they're on half term. But we were just saying oh it actually feels like people are coming back to meat and dairy and like wanting to saw, you know, a bit of that. And so I, I feel like, you know, if we're going to start suddenly labeling milk as sugar, you know that as bad then it was just going quickly backwards because I feel like we've made some real headwind in the last with the out the campaigns and the milk, you know, all of that. [00:49:19] Speaker D: Yeah. I think what the government need to realize is that governments don't grow economies. Business businesses do and they only do that if they've got confidence in the market and the government and, and I don't think they do. [00:49:35] Speaker A: Yeah, I think some of this seems obviously they've probably done some work behind the scenes. I hope so. But a lot of it seems quite off the hip like this. The milk thing is talking about taxing. What like what's that on is. Yeah, you just. And I think Neil, you mentioned there about your last point about not Just being farmers, it's just like the minimum wage thing. I think it's high time now farmers speak up, man, like, none of this round table nonsense. Yeah, Nah, that doesn't work. Don't sit there and talk to someone that's going to tell you that they will do xyz. And as soon as you walk out the door, they're giggling to their aid and they're 15 entourage that they've turned up with, hashtag, there is coffee and you know they're not going to do anything. Enough is enough. Now, like, if we, if, if people just sit back now and take this and not say what they think properly and go to, then we need to take what we get because it's like, yeah, it's madness. When. When nurses got done, they went on the streets. When doctors got done, they striked. When train drivers got done, they striked. When farmers get done, you have a few hundred turn up. No one else does anything because now we don't do that. That's not British culture. Well, guess what British culture is this getting stung by your own government like this. So we either do something about it or just carry on suffering. [00:51:13] Speaker D: I do think this is a good opportunity because it is. The whole, the whole supply chain could come together on it. [00:51:18] Speaker A: Yeah. [00:51:19] Speaker D: Like the, the retailers, the processes and the farmers. Because it's in all of everyone's interest for farmers to thrive. Retailers and, and processes need farmers to thrive and to be able to supply them with produce. So some of these things today are really gonna have big impacts on supply chains and where food's coming from and. [00:51:44] Speaker A: The cost of the food. [00:51:45] Speaker D: And the cost of the food. Yeah, because that's what we've got. Like, we are in. We're still in a cost of living crisis. Like we talked about last week, didn't we, about the campaign on from Riverford, plowing their own furrow on. On bloody. Oh. Saying everyone's a mega farm, obviously, in their own interests, but, like, we've got to, like, we can't all buy a 20 pound box of vegetables. Like, we need to. We need to look at what our consumers can afford and produce them affordable food. And, and this. A lot of these steps today are just going to make it nearly impossible. [00:52:28] Speaker A: Hey, Chris. They might be able to afford it with an increase in minimum wage. Right. But then, look, that's another thing I thought about there, Neil. When you say so, obviously thinking of it as an employer, and I might be one in future, if I was an employer, I'd be like, oh, that's an extra. Like I remember I used to work before when the minimum wage went up, it was the five figure increase just like that on their wage bill because like when you've got that many staff, but as an employee I'd be like, what? Minimum wage gone up 12, 21. Loving it. So like it's, it swings in roundabouts, isn't it? [00:53:11] Speaker B: Well, I think it does, it does things in roundabouts. But I think what, what it comes back to is, you know, we'll wrap this up. But I think what it comes back to is that farmers, you know, are sort of like you're producing something that you don't know what you're going to get paid for. You know, that's, that's it, that's, that's the, the crutch of the matter. You don't know what you're going to get paid for it. Yeah, but we know that we've got to pay somebody X amount of pounds minimum wage. We know. Yeah. To produce it. We know that the fee cost is this, we know that the vet cost is this, we know that all these costs are fixed and we know exactly what they are. But the big difference is we don't know what we're going to sell the product for. So you know, you can do, you can do, you know, you do your cash forecast, your cash flow and all the rest of it. A lot of lime milk contracts, you have to do that. They want to know what your production is, they want to see your production curve and, and you do all of that and you sort of still. Well, we don't know what we're getting, you know, this, this is the thing and it suddenly can change. [00:54:15] Speaker C: Yeah, I mean Neil's so right. I mean like for a real life example, tomorrow we've got our milk price calls and that is action from the 1st of of November. So I find out tomorrow what I'm going to be prayed for next month's milk. So how many days have I got? You know, how much notice have I got? [00:54:33] Speaker A: Tomorrow's 31st and it starts from the first. [00:54:36] Speaker C: Yeah, exactly. So that's telling me what, why? [00:54:39] Speaker B: Yeah, that's because that's how I do it. So don't give you any notice. Not alone are the same and a lot of the big people are the same that they don't give you any notice. So they can literally just drop that milk price or they can increase it. So some of the smaller dairies will give you a month's notice so some of the more regional dairies will Give you a month's notice so they'll tell you. But the downside is that is, is that your milk increase for August, you're not going to get it until October. Does that make sense? [00:55:10] Speaker D: Yeah, yeah. [00:55:10] Speaker B: You know, so, so you're always that sort of thing in behind. [00:55:15] Speaker C: But, but it is, it's like going back to your point, Neil, is that we just don't know. We can't plan like every decision we make on farms long term, but then pricing wise, it's so short term. [00:55:27] Speaker A: So Sophie, if you were to call up tomorrow and say, actually for whatever reason, or if you kept it quiet, however you say, right, look, I'm not sending you milk as of tomorrow, how would that affect you if you, if you were to do what they're doing to you do it the other way around, how would that work? Yes, sir. I'm not supposed. [00:55:46] Speaker C: I have. No. So our milk, we have to give 12 months notice. What? Yeah. And we, and I'd have no income, you know. Well, I'd have our beef and things. But that's, you know, the thing with the milk is it's monthly. We get paid twice a month for our milk and because it's so fresh, you know, obviously it leaves. It leaves daily at the moment, but paid twice a month. And being part of a co op is. It is good because you get a payment on top of your milk price because of the share of the profits. And I'm very happy with Arla, but it is, it's all these decisions we're making long term, like breeding, all of those things. Investment are so long term, but we are so affected short term by pricing. So like milk price late now it's out of our hands. Late labor cost. [00:56:33] Speaker B: And this is where corn flav. [00:56:36] Speaker A: Sorry, I said it shouldn't be allowed, man. [00:56:38] Speaker B: When this is where the APR thing is, so. So probably affects dairy and probably poultry, I'd say, more than anything because of the, the amount of investment. [00:56:50] Speaker C: Mass investment. Yeah, yeah. [00:56:52] Speaker B: It's huge investment, isn't it? You know, like, Chris, you're dealing with the pulp, you know me, safe, obviously, dairy, very, very biased dairy. But, you know, from your point of view, Chris, dealing in the poultry industry, you know, so, so I, you know, I'm a, I'm a bee farmer. I'm farming, you know, a couple hundred acres. I come, come to you. I want to fit a shed out. I want our first 2000 laying pen shed, everything. How much money is that going to cost me? Ballpark figure? [00:57:16] Speaker D: Well, you wouldn't really convert A shed. You, you really for build a shed from scratch. [00:57:21] Speaker B: That's what I mean. I'm going to build a share from scratch. [00:57:23] Speaker D: 32,000. You're looking at 2 million quid. [00:57:26] Speaker B: 2 million quid? [00:57:27] Speaker D: Yeah. [00:57:27] Speaker B: So there you go. So you're going to go. And the chances are massive percentage that is going to be borrowings. So. And you. What's that going to be over 25 years. What. What's an average sort of 20 years? [00:57:40] Speaker C: Yeah. [00:57:40] Speaker D: You're looking to pay 20 year mortgage between 8 and 10. 8 and 10 years, yeah. [00:57:45] Speaker B: Yeah. So how. And then also then you suddenly got to pay some APR inheritance tax in the middle of that 20 year period. It's OP's. Yeah, it's. [00:57:55] Speaker D: Yeah. [00:57:57] Speaker B: So right. [00:57:59] Speaker A: So deflating, man. I'm not even in the position. These people are like you say the big dairies and it's so deflated. [00:58:05] Speaker B: Actually, not even big dairies, Flav. It's, it's. It's a dairy farmer that's decided to say, right, I'm going to put robots in. We're going to go and spend half a million quid, I'm going to put some robots in. And it's not. That's not a big dairy farmer. That's the thing. [00:58:19] Speaker C: It just comes back to that messaging from government. Actually. We talk about like food security and that's what they really wanted and they even renamed the job, didn't they? Food security. I just feel like it's a massive kick in the guts and I feel like it's signal of how invaluable we seem to be to them. It's not just the money, it's the signal that. [00:58:41] Speaker A: Yeah, it's all performative nonsense. I've always said it like whenever you go in there to these meetings and even lumit mps like you can, you know, when you talk to someone, a fellow human being and you just look at them talking, you listening to them, you're like this guy, the amount is moving or guy or lady, the mouth is moving. There's sound coming out of them which in form of words, but there's no substance, no substance whatsoever. They're doing a job five years and their wage, poop. They've gone somewhere else. They're gonna earn more money and it's just a cycle. They don't care. They do not give a question though, which I haven't asked do if this, when this thing comes in, is there any, is there any way to avoid it? Like, because is it true that with the normal inheritance tax, if. Let's say I pass whatever I own to Noah before I die, or however many years before you die, then you don't pay seven years, you don't pay tax. Seven. [00:59:48] Speaker D: Yeah. [00:59:49] Speaker A: So then I know that will be a tricky thing with succession in farming, because that's another issue we deal with as an industry. But then surely if we backed against a corner, then potentially we might have to improve our succession plans in the industry. Not waiting till someone's on death's door to then be like, oh, actually, I'll give that 10 acres to Neil, 5 acres or so. Because you're a girl and 15 acres is Chris. Because as a good schmooze and a good blagger, like, we have to think that, okay, I'm gonna die one day. I'm now 50. I want my kid, Noah, who's X man, X age, to take over, put this plan in, sort it out, and then you avoid it. So I guess the whole succession job is gonna have to get a bit better than. Isn't it? [01:00:38] Speaker C: Yeah, I mean, it's a totally just. It's a different environment. Like, it's a. It's a different advice. Totally different advice. And I think there'd be a lot of accountants going home tonight being like, oh, man. [01:00:49] Speaker B: Yeah, this is definitely the detail, because that's what it is. There will be ways. There will be. There will be something there. But we don't know what that is yet. But I think, yeah, I think we need to sort of pull this to a bit of a close, really. And we can talk all night about, basically. So it's. But, yeah. Well, thank you. Anyone got any more points? David McC. [01:01:19] Speaker D: No. [01:01:20] Speaker A: I feel exhausted, man. [01:01:22] Speaker C: Yeah. [01:01:26] Speaker B: Thank you. Thank you for joining us, Sophie. That's all right. That was good. And. And, yeah, we'll. We'll. We'll catch up soon. [01:01:35] Speaker A: Yeah. Thank you so much, Sophie. [01:01:37] Speaker C: Pleasure. Nice to see you.