(Alliance News) - The UK government is facing calls from farmers and opposition parties to scrap its changes to agricultural inheritance tax ahead of protests in Westminster.
The National Farmers' Union, NFU, is holding a mass lobby of MPs with 1,800 of its members – three times as many people as originally planned – to urge backbenchers to stand up to the government's plans to impose inheritance tax on farms worth more than GBP1 million.
And thousands more are expected to join a separate rally in Whitehall as they protest against last month's budget, which also sped up the phase out of EU-era subsidies as funding is switched to nature-friendly farming schemes.
Farmers have reacted with anger and dismay to the inheritance tax changes for farming businesses, which limit the existing 100% relief for farms to only the first GBP1 million of combined agricultural and business property.
For anything above that, landowners will pay a 20% tax rate, rather than the standard 40% rate of inheritance tax, IHT, applied to other land and property.
In a speech to NFU members as they come to London to lobby MPs on the issue, the organisation's president Tom Bradshaw is expected to tell them that the "betrayal" on the tax changes is extraordinary.
He will warn that farms producing the country's food will need to be broken up and sold as a result of the policy, "because farmers simply won't have the money to pay this tax any other way".
"Our request is simple – this is a policy that will rip the heart out of Britain's family farms, launched on bad data with no consultation and it must be halted and considered properly, taking in the views of the experts not just Treasury civil servants," he will say.
He will urge members to tell MPs how the policy affects them, their families and their future, and said farmers would not give up or stop fighting the inheritance tax changes nationally and locally in every constituency.
Bradshaw met Environment Secretary Steve Reed for talks in Westminster on Monday and said that after "tough conversations" the demonstration would "definitely" go ahead.
He urged farmers to be "peaceful" and "passionate" in their protest, telling the PA news agency: "It was a valuable meeting. It was a great opportunity to really spell out in black and white why their evidence is wrong, why it has to come forwards in consultation, and what the extreme human pressure is that this policy has created."
The union chief said he hoped that Reed would "go away now and work with the chancellor to try and get some sort of resolution" because the policy was "completely irrational" and "not well thought-through".
Speaking to broadcasters at the G20 summit in Brazil on Monday, Sir Keir Starmer insisted "the vast majority of farms" will not be affected by the reforms.
"On the question inheritance tax, look I do understand that it's causing concern," the prime minister said.
"But if you take a typical case of a couple wanting to pass a family farm down to one of their children, which would be a very typical example, with all of the thresholds in place, that's GBP3 million before any inheritance tax is paid.
"And that's why I'm confident that the vast majority of farms and farmers will not be affected at all by that aspect of the budget.
"They will be affected by the GBP5 billion that we're putting into farming, and I'm very happy to work with farmers on that."
Ahead of the protests, Conservative leader Kemi Badenoch said her party would "staunchly oppose the family farm tax, which threatens our vital rural economy and our food security, with increased costs and a greater reliance on imports".
The party pointed to figures from the Country Land & Business Association, CLA, that suggest an average 250 acre arable farm will be forced to sell 20% of its land under Labour's plans.
"The Labour government clearly doesn't understand, or care about rural communities, and now families are having to sell their farms, with knowledge that has been handed down through generations lost forever," Badenoch said.
The Liberal Democrats warned subsidies for farmers have fallen by 20% in real terms since 2015, and 8,100 farms were lost across the UK in 2023.
They said the financial situation was getting worse, as Labour sped up the end of direct subsidy payments, and urged the government to ditch the inheritance tax reforms to save farms from even greater financial pressures.
Liberal Democrat environment spokesperson Tim Farron said: "Farmers are absolutely vital to this country. They put food on our table and look after our countryside and without them we would all be worse off.
"For years the Conservative Party knew this and did nothing but neglect them.
"They forced them to suffer through botched trade deals, declines in their incomes and cuts to much-needed support that makes farming in this country viable.
"Now the new Labour government looks set to do exactly the same.
"Their family farm tax will be yet another hammer blow to farmers in this country and risk ringing the death knell for farming in the UK."
He called on Chancellor Rachel Reeves to urgently rethink the plans.
In a joint statement Reeves and Environment Secretary Steve Reed said farmers were the backbone of Britain and acknowledged the "strength of feeling" from farming and rural communities in recent weeks.
They insisted they were "steadfast" in their support of British farming, saying: "It's why we are investing GBP5 billion into farming over the next two years – the largest amount ever directed towards sustainable food production, rural economic growth and nature's recovery in our country's history.
But they said: "With public services crumbling and a GBP22 billion fiscal hole that this government inherited, we have taken difficult decisions.
"The reforms to agricultural property relief ensure that wealthier estates and the most valuable farms pay their fair share to invest in our schools and health services that farmers and families in rural communities rely on."
Celebrities including Jeremy Clarkson – who told the Times in 2021 that avoiding inheritance tax was "the critical thing" in his decision to buy land – will join the rally.
The TV presenter told the Sun he would attend despite doctors telling him not to go as he recovers from a heart operation.
Organisers and farming leaders say they have no concerns over potential trouble despite speculation over far right protesters attending.
While a procession to Parliament Square will be spearheaded by children on toy tractors, organisers have told those coming that they should not bring their farm machinery.
CLA president Victoria Vyvyan said: "The government claims to back farmers but their words seem hollow against a backdrop of tax rises, a cut in real terms to the agriculture budget and a speeding up of the end of direct payments.
"Failure to increase the budget will leave farmers unable to deliver on food security or the government's environmental commitments. It will hit sustainable food production and undermine improvements to wildlife habitats, flood management and access to nature."
She said the tax reform could endanger as many as 70,000 farms from "the average family farm up to our biggest food producers", warning that could lead to job losses in rural communities.
By Emily Beament, PA Environment Correspondent
Press Association: News
source: PA
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