Starmer urged to axe inheritance tax change or risk 'ending farming as we know it', as Labour slam 'misinformation'

19 November 2024, 23:02 | Updated: 19 November 2024, 23:03

Keir Starmer has been urged to axe the inheritance tax changes
Keir Starmer has been urged to axe the inheritance tax changes. Picture: Alamy/Getty

By Kit Heren

Keir Starmer has been urged to reverse the planned change to inheritance tax before he causes the "end of farming as we know it" - but Labour hit out at "misinformation" fuelling protests.

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Kemi Badenoch, Lib Dem leader Ed Davey and TV star Jeremy Clarkson were all among those who urged the government to rethink its policy, after a mass protest on Tuesday.

But the government appears to be holding firm, with Starmer and other ministers saying they would keep the changes.

The change announced by Labour in the October Budget was to get rid of agricultural property relief on some farms.

Previously, farming businesses qualified for 100% relief on inheritance tax on agricultural property and business property.

Read more: 'The facts speak for themselves': Starmer hits out at Jeremy Clarkson following Westminster farming protests

Read more: Minister says claim 70,000 farms to be stung by inheritance tax change is 'absolutely crazy misinformation'

'If inheritance tax amounts to class war, then we have utterly lost the plot', says Ben Kentish

But now the tax is being imposed on farms worth more than £1 million, with an effective tax rate of 20% on assets above the threshold, rather than the normal 40% rate for inheritance tax.

Speaking at the protest on Tuesday, Tory leader Ms Badenoch said: "There are lot of people out there who are worried about their future and they need to know we are looking after them."

She told the Sun: "This policy is not going to raise any money.

"So in a year’s time if they have not u-turned that’s going to be patently obvious, and then they are going to have to look again.

“But if they know they’re becoming very unpopular because there is an opposition that is going to do something very different, that can change things. And we are going to do things differently.

“We will reverse this, it is not a good policy, it is cruel, it is unfair and it will destroy farming as we know it in this country."

Environment Secretary Steve Reed discusses the farmers' protest with Andrew Marr

Lib Dem leader Davey told LBC's Tonight with Andrew Marr that farmers are "struggling like never before", adding that the inheritance tax change would have a "much bigger impact than ministers seem to think".

Meanwhile, appearing at the protest, Clarkson held a sign saying "with our farmers" as he urged the government to "back down" over the tax changes.

Clarkson claimed that 96% of farmers would be impacted by the changes.

Speaking from the G20 summit in Rio de Janeiro, Keir Starmer was asked about the Downing Street farmers' protests and whether Clarkson's comments constituted "misinformation".

The PM refused to be drawn on comments made by Jeremy Clarkson during the rally, with the PM adding: "The facts speak for themselves."

A Labour minister told LBC that only around 500 farms would be affected by the policy shift.

Environment Secretary Steve Reed said that claims that 70,000 farms would be affected by the inheritance tax change amount to misinformation.

He told Andrew that an estimate by the Country Land and Business Association (CLA) that 70,000 farms - all those of 50 hectares or more, with a value of more than £1 million - will be affected by the change were "absolutely craziness".

The figure cited by the CLA represents around a third of the UK total.

Read more: Farmers will never forgive Labour - and I’m not sure I blame them

Read more: Jeremy Clarkson tells government to 'back down' over inheritance tax changes at farmer's protest

Protesting farmers on Tuesday
Protesting farmers on Tuesday. Picture: Alamy

Mr Reed said: "There's a lot of misinformation flying around. I've seen figures, I'm saying to you, 500 affected, maximum. I've seen people saying 70,000 will be affected.

"It's absolute craziness where these numbers are coming from. I know that farmers are hearing that and not knowing what to believe.

London, UK. 19th November, 2024. TV presenter and farmer Jeremy Clarkson joins thousands of farmers protesting in Whitehall against changes made by the UK government to agricultural inheritance tax.
London, UK. 19th November, 2024. TV presenter and farmer Jeremy Clarkson joins thousands of farmers protesting in Whitehall against changes made by the UK government to agricultural inheritance tax. Picture: Alamy

"But these projections from HMRC, validated by the independent OBR, validated by the IFS, very authoritative and independent sources are saying that only a small number of the very wealthiest and biggest farms will be affected. The rest will not.

"And so family farms will continue to be passed from generation to generation as they should be."

Caller Mark points out the irony of farmers buying first class train tickets to protest a tax hike

Asked if there would be any changes following the protest, he said: "We'll always listen to farmers. I spent a lot of today listening to farmers and the past few weeks listening to farmers.

"I think that's absolutely the right thing to do but the policy is not going to change, but we'll always make sure the implementation is correct."

A key issue raised by farmers in response to Labour's tax announcement is that many will have to sell up to pay the bill - because while their farms may be valued highly as an asset, they do not produce much profit.

Mr Reed said the government would work to make farms more profitable.

"We don't have to accept that they're going to make such low levels of profit," he said.

'Do farmers' tax protests show Labour's Budget is starting to unravel?' asks Andrew Marr

"So, one of the things this government has done is we've allocated £5 billion, the biggest ever budget in our country's history, towards sustainable food production.

"We're seeking to negotiate a new trade deal with the EU to get British food exports flowing across the borders again. We want to use the power of public procurement to buy British to put money in farmers pockets."

Earlier, the CLA said the government had lied about the impact of the tax, and said protesters had "every right to be angry".

CLA president Victoria Vyvyan said: "Ministers claim the inheritance tax cap hits only the rich, but it could put 70,000 farms - big and small - at risk. All will be questioning their future, and whether they'll have one to pass on.

"Farmers shouldn't need to be marching to London; ministers should be marching to them.

"They need to understand the real damage and fix it before they destroy confidence in the rural economy."

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