Labour accused of 'declaring war' on countryside amid anger over 'family farm tax'

Farmers in Northumberland have been angered by measures in Rachel Reeves’ Budget.

The Chancellor announced a change to inheritance tax – limiting the 100% relief to the first £1 million of combined business and agricultural assets.

There will only be a 50% relief on assets above that £1 million threshold, giving an effective inheritance tax rate of 20%, which the National Farmers’ Union (NFU) has warned will have a “devastating” impact on farming families.

It is feared that the change will make it harder to hand farms down through generations and could force some families to sell off parts of their land to pay inheritance tax bills.

Conservative councillor Guy Renner-Thompson accused Labour of having “betrayed” rural communities in the North East, though the Government has insisted that most farms would be unaffected by the change.

The Bamburgh councillor, who was the Tories’ North East mayoral candidate, said: “The first Labour budget since 2010 has declared war on the British countryside.

"Our pensioners, many of whom live in older houses which rely on oil or wood heating, have had their winter fuel payment stopped.

"Farming and the hospitality industry are our biggest employers, family farms have been betrayed with cruel new inheritance taxes and our small businesses are wondering how they will afford big rises in National Insurance payments.

He added: “The cherry on the cake is double cab pick-up trucks are going to be classed as cars instead of commercial vehicles, costing farmers and tradesmen who rely on them thousands of pounds per year in extra tax. Far from not raising taxes on ‘working people’, Labour have taxed the hardest working people out there.”

The likes of Jeremy Clarkson have also condemned the inheritance tax hike, while the NFU has announced a “mass lobby” of MPs.

NFU president Tom Bradshaw said the plans “need to be overturned and fast” and that “every penny the Chancellor saves from this will come directly from the next generation having to break up their family farm”.

He added: “Farmers and growers have been left reeling from the changes announced in the Budget which demonstrate a fundamental lack of understanding of how the British farming sector is shaped and managed.”

A spokesperson for the Labour Party said: “On Wednesday, Rachel Reeves outlined a budget which will fix the foundations of our economy, and deliver for working people. This government is continuing to protect family owned farms and businesses.

“Those with up to £1 million of combined business and agricultural assets will have no inheritance tax to pay at all. Three quarters of current claims would be completely unaffected by these changes.

“For those estates whose combined business and farming assets are more than £1m, inheritance tax will apply with 50 per cent relief, at an effective rate of 20 per cent, and they will have ten years to pay it.”