Labour digs in over family farm tax raid: Defra’s bid to soften the Budget blow is rejected by Downing Street_Nhy
A bid to soften the tax raid on family farms, led by the Government’s own department for the countryside, has been rejected.
Downing Street insisted yesterday there would be no concessions to the policy of slapping Inheritance Tax on farms worth more than £1 million, hitting farmers who want to pass on their land to the next generation.
It came after rumours of splits within Government over the plan – which has been branded disastrous by farmers –ahead of a mass protest in London next week that tens of thousands of people could attend.
The BBC’s Newsnight reported the Department for Environment, Food and Rural Affairs (Defra) believes it was not properly consulted over the change, which it only heard about the night before the Budget.
Officials are said to have suggested that farmers aged over 80 could be spared having to pay IHT at 20 per cent when long-standing exemptions are scrapped in 2026.
But Sir Keir Starmer’s official spokesman said: ‘The changes to agricultural property relief set out in the Budget will be implemented as set out in the Budget.’
And a Defra spokesman said: ‘All ministers support the policy and it will not change.’
It came as new Conservative Party leader Kemi Badenoch toured Seed J H & Son farm in Aylesbury, Buckinghamshire yesterday with Greg Smith MP.
Downing Street insisted yesterday there would be no concessions to the policy of slapping Inheritance Tax on farms worth more than £1 million
A mass protest in London is planned for next week which tens of thousands of people could attend
In one of her first acts after taking up the leadership, Mrs Badenoch vowed to reverse the tax hike if the Tories regain power.
Labour risked fresh anger last night after the Welsh First Minister called for calm and insisted only a tiny number of farms would be affected. Eluned Morgan told a BBC phone-in: ‘The initial calculation that we’ve made is that there will be a tiny proportion of farmers in Wales affected by this.
‘So I just think we should just all calm down a bit until we are all clear about how many farms will be affected, and we are crunching the numbers on that as we speak.’
Welsh Conservative leader in the Senedd, Andrew RT Davies, said her comments ‘show how little this Labour Welsh government understands the rural community’ and warned: ‘This decision has to be reversed, because no farmers means no food.’
Adding to the pressure on the Government, its own figures showed the pressure farmers are already under. New Farm Business Income statistics published by Defra showed the cereals sector suffered a 73 per cent fall in income in 2023-24 while dairy saw a 68 per cent drop. NFU President Tom Bradshaw said the numbers painted ‘a stark picture’ of the challenges facing farmers as they grappled with higher costs, reduced subsidies and one of the wettest winters in decades.
He said: ‘When these figures were first estimated back in March 2024, we said that we needed a government that would create policies to support British agriculture and help farmers and growers to build financial resilience into their businesses. Instead, we have seen the opposite.’
Conservative Party leader Kemi Badenoch toured Seed J H & Son farm in Aylesbury, Buckinghamshire yesterday with Greg Smith MP, both pictured
Labour risked fresh anger last night after the Welsh First Minister, Eluned Morgan, pictured, called for calm and insisted only a tiny number of farms would be affected
Farming Minister Daniel Zeichner, pictured, admitted this week there is a ‘huge discrepancy’ between the Government’s figures, which claim only 28 per cent of farmers will be affected, and those used by farmers, who fear as many as 66 per cent will be hit
Labour also came under fire in the Commons over just how many farms will be affected by the tax raid. Farming Minister Daniel Zeichner admitted this week there is a ‘huge discrepancy’ between the Government’s figures, which claim only 28 per cent of farmers will be affected, and those used by farmers, who fear as many as 66 per cent will be hit.
Shadow environment spokesman Victoria Atkins asked: ‘Should the cost of the family farm tax to farming families have been checked before the Budget?’ But Environment Secretary Steve Reed insisted: ‘HMRC data is crystal clear. Three quarters of farmers will pay nothing as a result of these changes, family farming will continue into future generations, just as it should do.’
Meanwhile one of the organisers of Tuesday’s march through Westminster against the policy said that tens of thousands of people could attend.
Clive Bailye, who runs The Farming Forum website, told the Mail: ‘We have 12,000 people registered to attend but we are aware of a large number who do not want to give their names and we could see double that number.’
He said the organisers had assured police they did not want a ‘French-style disruptive protest’.
While tractors have not been banned, Mr Bailye said: ‘The only tractors we want are pedal ones leading the procession, ridden by children. The whole point is to show our strength of feeling.’ A farmers’ strike in which several thousand plan to delay sending animals to slaughter or selling crops for a week from Sunday is also set to go ahead.
