I would like to deal with the question of the definition of a farmer. We agree with the Minister that the special concession of 50 per cent or £100,000 given to a farmer ought to be restricted to genuine farmers. There is no reason why wealthy people should be able to invest their money in land and get this concession. It is not intended for such people at all. It is intended for those who are engaged full time in farming. One ought to concede the point that this concession given to the farming community is the minimum that one ought to agree to. It is fair to say that a farmer is in an unique position in that being a farmer and having an income from the land he also possesses a considerable amount of wealth. A farmer with £100,000 worth of land might seem to be a rich man but in reality he is a comparatively small farmer. His income is considerably less than that of a wide section of the population living in cities whose theoretical wealth may be a great deal less. Assuming a farmer has an income at all from land he is by definition a wealthy man in terms of this form of tax. Obviously it is only fair that there should be a concession of this kind granted to farmers. Equally one accepts that it ought to be restricted to those who are genuine farmers employed full time in farming.
The definition contained in section 10 may cause problems, inequalities and in some cases injustices. I would have preferred to see a form of definition which would bring out the element of full-time work. A farmer working full time at farming, however that might be defined, could be counted as a genuine farmer. This form of valuation, saying he must have 75 per cent of his assets in farming, is liable to lead to problems in such areas. This is especially true because of the system of aggregating the family wealth. For example, if the farmer's wife has a certain amount of property —she may own a small hotel, a public house, she might have been left a couple of houses by her family, and because of this in the case of a relatively small farmer he could find himself drawn into the wealth tax net. I am sure the Minister does not envisage or wish this to happen.
If a full-time farmer has a farm worth £75,000 he may have about 80 acres of land, allowing for outbuildings, machinery and livestock. If his wife has a public house worth £25,000, this brings the family wealth up to £100,000, the wealth tax limit. Because he has not got £74,000 and £26,000 to bring him over the limit he has not got 75 per cent of his assets in land and he therefore qualifies for the wealth tax. At that level he would have to pay only a marginal amount. It is relatively easy in such a case to reach the threshold. In accordance with the provisions of this section, in that case, not only could a relatively small farmer find himself liable for wealth tax but he would not have the benefit of exemption for livestock. For example, in order to gain the exemption given to livestock, he must be a genuine farmer in terms of this section. In this case if a farmer or his wife has assets amounting to more than 25 per cent of his total assets outside the land he is liable to be caught within the net without the concession of 50 per cent or £100,000 and without the special exemption given to livestock.
This would bring a married man, a farmer with £75,000 or more with, say, 80 acres and the case of the single man who has a property of his own it could bring him into the net at around £55,000, say around 55 acres. This is obviously not the intention of the Minister. It is undesirable and unjust. Quite obviously there are vast numbers of people in the country in other areas making far more money than this particular farmer but whose wealth, in the sense used in the Bill, is less. The farmer's wealth is, to some extent, mythical because his income from that wealth is small, an average of about 2 per cent. He is getting a small return from his wealth because he is a farmer and wishes to remain one. He has no intention of selling his land and, therefore, realising this purely notional wealth which is of no value to him apart from giving him an income. Because of the fluctuating nature of the value of investments, the problems attached to sales of livestock, the value of the farm could go up or down between one year and the next. Somebody could be in the net one year and not in it the next, because of the relatively low threshold created by the Bill.
The Minister ought to consider seriously whether this is the correct definition for a full-time farmer within the meaning of this section, and whether he might not change this definition to preserve the intention that only genuine full-time farmers are included and that speculators are excluded. While preserving this intention the Minister might think of a different definition which would not have the possible effects I mentioned.