Keir Starmer today moved to water down Labour’s hated inheritance tax raid on farmers amid widespread rural anger.
Keir Starmer (Image: Getty)
Keir Starmer has U-turned on his inheritance tax raid on farmers following mass protests by rural communities. The Government’s latest climbdown is a victory for the Express’s Save Britain’s Family Farms Crusade. Announcing the major concession, Environment Secretary Emma Reynolds said she had “listened closely to farmers across the country and we are making changes today to protect more ordinary family farms.”
Under the original plan unveiled by Rachel Reeves in the 2024 Budget, farmers faced paying IHT at a 20% rate on agricultural property and land worth more than £1million from April. But the government on Tuesday lifted that threshold to £2.5million – or £5million for couples – admitting that it had acted after it “listened to concerns of the farming community”. While the Tories welcomed the climbdown, their shadow environment spokesman Victoria Atkins that rural communities in Britain “will not forget the distress, pain and panic this government has caused them.”
Kemi Badenoch warned that the fight ‘isn’t finished’ (Image: Getty)
Conservative leader Kemi Badenoch said: “This fight isn’t finished. Other family businesses are still affected by Labour’s tax raid, and we will keep pushing until the tax is lifted from them too. But today is an important win, and proof that standing up for what’s fair, even when the odds are against us can make a real difference.”
National Farmers Union President Tom Bradshaw said: “We have spent the past 14 months campaigning and lobbying to try and mitigate the worst impacts of the proposals.
“After it became clear that this policy wasn’t going anywhere, we have focused our campaign to mitigate the worst of its impacts for the majority. Today’s announcement, which sees the tax threshold raised from £1m to £2.5m, will come as a huge relief to many. While there is still tax to pay, this will greatly reduce that tax burden for many family farms, those working people of the countryside.
“Changes to Agriculture Property Relief (APR) and Business Property Relief (BPR) announced in last year’s Budget came as a huge shock to the farming community. Until that moment, the best tax planning advice was to hold on to your farm until death and pass it on to the next generation who could continue to run a viable farming, food producing business.”
He added: “I am thankful common sense has prevailed and government has listened.”
Farmers across the country have staged mass protests following the Chancellor’s sudden announcement of the IHT change last October.
Growers, who are asset-rich but cash-poor, had insisted they would need to sell off land to foot the tax bill.
This also prompted warnings that it would hit Britain’s national food security, with the Ukraine war showing how volatile prices can be if a country doesn’t produce enough food for its own people.
Labour MP Markus Campbell-Savours lost the whip six days ago for opposing the tax in Parliament (Image: Markus Campbell-Savours)
The Tories, LibDems and Reform UK have said they will continue to push for the complete abolition of IHT on family farms, saying even the new threshold is not good enough and remains unfair.
Andrew Griffith, the shadow Business Secretary, warned that the partial u-turn will still disincentivise farmers from growing the firms.
He explained: “Applying inheritance tax to family businesses remains wrong, and raising the threshold merely disincentivises growth and success. The rationale response will be to simply not make that extra hire or open another venue.”
Reform UK deputy leader Richard Tice added: “This cynical climbdown – whilst better than nothing – does little to address the year of anxiety that farmers have faced in planning to protect their livelihoods. Even with the raised threshold, many family farms will still face crippling bills. With British agriculture hanging by a thread, the government must go further and abolish this callous farms tax.”
The Daily Express has been campaigning on the issue since October 2024 by highlighting the plight of dozens of farmers.
Farmer Gareth Wyn Jones said: “Finally, the government is listening to the farmers and that should help. I still think the threshold should be higher, but it’s all positive and going in the right direction.”
Sir Keir’s rural backbench MPs have also become increasingly furious at the move, which broke a promise made by former Environment Secretary Steve Reed while in Opposition.
Labour MP Henry Tuffnell, a vocal critic of the original tax grab, said: “I’m really pleased that the government has listened and that we’ve got to a much better place.”
Just last week the rural Labour MP for Penrith, Markus Campbell-Savours, lost the party whip after voting against the Family Farms Tax in a Budget vote.
It is not yet known whether he will receive the whip back following the Government’s u-turn.
Gavin Lane, president of the Country Land and Business Association, said: “This change will come as an enormous relief to thousands of family farms across the country who faced seeing their businesses taxed out of existence. The Government deserves credit for recognising the flaws in the original policy and changing course.
“However, this announcement only limits the damage – it doesn’t eradicate it entirely. Many family businesses will own enough expensive machinery and land to be valued above the threshold, yet still operate on such narrow profit margins that this tax burden remains unaffordable.
“On that basis, we thank Ministers for the constructive dialogue, we look forward to working in partnership to grow the rural economy, whilst continuing to call for these reforms to be scrapped entirely.”
