Labour Sticks To Its Guns On Inheritance Tax Despite Farmer Backlash
Protesters descended on Westminster in tractors on Tuesday in protest of the government's planned changes on inheritance tax. (Alamy)
5 min read
The Government is holding firm on changes to agricultural relief despite backlash from farmers facing inheritance tax for the first time.
Deputy Prime Minister Angela Rayner today told MPs "the Government hasn't declared war on farmers" in response to Tory attacks in Prime Minister's Questions.
"The vast majority of farms will not pay any inheritance tax," Rayner said on Wednesday afternoon, adding that the money raised through the changes to how landowners are taxed would be spent on public services which "farmers rely on... like everybody else".
A day earlier, thousands of farmers marched through Westminster to protest the decision by Prime Minister Keir Starmer, who was meeting world leaders in Rio. The farmers were joined by an alliance of opposition politicians ranging from Reform leader Nigel Farage to Leader of the Opposition Kemi Badenoch to Lib Dem MPs, as well as TV personality Jeremy Clarkson.
On the same day, Labour MPs in rural seats held back-to-back meetings in Parliament with dozens of farmers in a bid to assuage their concerns and clarify how they would be impacted.
The protests follow the Government's decision to restrict business and agricultural relief from April 2026, meaning estates will only be eligible for 100 per cent inheritance tax relief on the first £1m of business and agricultural assets as individuals, or £3m for a couple.
Speaking at the demonstration on Tuesday, President of the National Farming Union (NFU), Tom Bradshaw, said he had "never seen the industry this angry, this disillusioned, and this upset", describing the policy as a "stab in the back". Farmers have warned that the changes will result in higher food prices and force some of them out of business, while ministers insist that only 500 out of 209,000 farms nationwide will be affected.
One Labour source in a rural part of the country said they were sanguine about the situation, describing the reaction to the policy as "hyperbole".
They likened the protests in Westminster on Tuesday to when tens of thousands of people protested against the fox hunting ban on the streets of Westminster twenty years ago while Tony Blair was in power before the then-Labour prime minister went on to win a third consecutive general election.
While some Labour MPs who spoke to PoliticsHome said the policy could be improved through some tweaks, there is general widespread support in the party for as one backbencher put it, the "underlying principle" of the proposals announced in the Budget.
"Maybe there are ways that this will be finessed because this isn't about getting the ordinary farmers... there might need to be tweaks or adjustments or what have you to it," said this MP.
"But the fundamental underlying principle of it — of how we look at either gaining more tax revenue from wealth or incentivising more of a transfer of wealth around the country — that's a good thing as a kind of overarching policy aim."
They were concerned, however, over the "vast difference" between how many people the Treasury says will be impacted by the policy and how many people the NFU says will be affected, and the effect it is having on the debate.
"On any issue that's emotive, you do worry about how much of the debate is taking place on the terrain of facts and evidence," they said.
Another Labour MP told PoliticsHome: "They [Government] are not going to roll back.
"The most they'll do is offer an advice line for farmers or something. If they don't do that, they're stupid."
They added: "I would have done it differently.
"I'd have said: if your farm was bought, then you have an inheritance tax. But if your family was third or more generations of this farm, then you stay at the current rules. You protect all those multi-generational farmers and just expose the other ones."
Scarlett Maguire, director of pollsters JL Partners, suggested Labour ministers would be unwise to play down the potential impact of the row in terms of public opinion.
"If I were Labour, I'd have been looking at farmers protests in European countries — Germany, France, the Netherlands — and images of tractors out on the roads like we've seen in Westminster yesterday, and thinking that it's never been the precursor for something good for the sort of centre-left or centre-right government in power," said Maguire.
"It is potentially a dangerous fight to pick because people have an attachment if not to farmers, per se, but to farming and agriculture."
She said around eight in ten voters think agriculture is important to the economy and that the sector is seen as linked to "values, a sense of Britishness" and as "rooted in communities".
She was echoed by Savanta's Chris Hopkins, a fellow pollster, who said "the public will probably feel a degree of nostalgia about farming and farmers".
"If they communicate the perception of them getting a raw deal, then maybe they'll be able to generate a bit more public support than another more frequently maligned group," he said.
However, Hopkins predicted that when it comes to public support, farmers would "likely run out of road more quickly than doctors, nurses and public sector workers" did when they have been on strike over pay and conditions in recent years.
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