Keir Starmer has denied that he is mounting a class war by targeting wealthy landowners and private schools, after the head of the National Farmers’ Union accused the government of an extraordinary “betrayal” over inheritance tax changes.
In an escalating war of words between food producers and ministers, the NFU president, Tom Bradshaw, called the government’s budget measures a “stab in the back”, after the sector had been previously told that taxes such as agricultural property relief (APR) would not be changed. He was addressing hundreds of farmers who had travelled to London to lobby their local MPs.
Starmer told reporters at the G20 in Rio de Janeiro that the government was taking a “balanced approach” to fund public services and called on farmers to think about the money needed for schools and hospitals in rural communities.
Asked if he was mounting a class war on the wealthiest, Starmer told Sky: “It isn’t at all what we’re doing. It’s a balanced approach. We have to fill a black hole which was left by the last government.”
In London, Bradshaw told a room of about 600 farmers: “I don’t think I have ever seen the industry this angry, this disillusioned, this upset.”
He described the budget measures as a “shocking policy, built on bad data, and launched with no consultation with anybody that understands”.
Bradshaw was applauded by farmers as he commented on the “human impact of this policy” and warned that government measures including changes to national insurance contributions, coupled with a competitive retail environment, would push up food prices.
Separately, thousands of food producers gathered close to Downing Street on Tuesday morning for a rally flanked by tractors.
Previously, farming businesses qualified for 100% relief on inheritance tax on agricultural and business property. But now the tax is being imposed on farms worth more than £1m, with an effective rate of 20% on assets above that threshold, rather than the normal 40% rate for inheritance tax.
Ministers have said the threshold for farmers paying inheritance tax could be £3m for a couple, once various exemptions were taken into account.
The NFU has rejected the government’s claims that most farms will not be affected by the change, and believes that it will apply to 75% of what it calls “commercial farm businesses”.
A group of farmers from Wales and Wiltshire attending the NFU lobby said they believed all of their farms would fall into the remit of inheritance tax under the budget measures.
Philip Greenhill, a beef and arable farmer from North Wiltshire, said there was “no correlation” between the earnings from a farm business and its asset value. “You could have £5m of assets, but make £50,000 a year profit, depending on how you farm that,” he said. “If you have got that, you are looking at maybe £600,000 inheritance tax off a £50,000 income.”
Holding a sign reading “farmer harmer Starmer”, Sue Hosegood, a Devon dairy farmer, and her husband, William, said they were worried for their three sons who are involved in the business. “There is no future if we have to pay tax every generation,” William said.
Jonathan Wilkinson, a dairy farmer from Montgomeryshire in Wales, was one of those to hold a meeting with his local MP as part of the NFU’s lobbying efforts. He felt the newly elected Labour MP, Steve Witherden, “understands the pressures [on farmers],” but felt he was “toeing the party line”.
“He said that if there were an amendment that would look again at the agricultural property relief, then he would consider voting for an amendment,” Wilkinson said.
The Guardian understands that some Labour MPs with rural constituencies are privately “very upset” about the budget measures, but have yet to put their head above the parapet and criticise the government.
The NFU said it had the support of the general public for its protest against the tax changes, and said more than 200,000 people had backed its campaign against the measures. Bradshaw called on ministers to return to the negotiating table to work out how to target wealthy landowners who have been buying land to avoid inheritance tax.
The host of Clarkson’s Farm, Jeremy Clarkson, was one of those who addressed the crowd of food producers in Westminster, estimated by the Metropolitan police to have numbered 13,000 at its peak.
Clarkson called on ministers to change their mind. “I beg the government to be big, to accept that this was rushed through,” he said. “It wasn’t thought out, and it’s a mistake. That’s the big thing to do – admit it and back down.”
He previously told the Times in 2021 that avoiding inheritance tax was the “critical” factor in deciding to buy his Cotswolds farm.
Starmer declined to say directly that Clarkson had spread misinformation by claiming 96% of farmers would be affected by inheritance tax changes. But he said the “facts speak for themselves” when it came to the numbers.
“For a typical family wanting to pass on through the family, which is … completely understood, then with all the allowances in place, if they pass on to a child it’s a £3m threshold. All of you can check out what that means in terms of the impact. But it means that the vast majority of farms are unaffected by this.”
The environment secretary, Steve Reed, said farmers demonstrating in Whitehall were “wrong” over whether they are liable for inheritance tax. He told MPs on the environment, food and rural affairs committee: “Many of them, probably happily, are wrong.”
He added: “I don’t think the public will consider it unreasonable that people with multimillion pound assets should not pay inheritance tax.”
