Pressure from British farmers has forced the left-wing Labour Party government of Prime Minister Sir Keir Starmer to roll back some of its inheritance tax raid on farmers.
After sweeping to power last year in part as a result of public anger against the high-tax agenda of the supposed Conservative Party, Prime Minister Starmer’s government chose to double down and continue to hike taxes, including on the nation’s farmers.
While farmers have long been exempt from inheritance tax, given that they are often cash poor and operate on thin margins, the leftist government aruged that the relief scheme should be scrapped, claiming that the wealthy were avoiding death taxes by diverting their money into farmland.
However, the government’s plan to impose a 20 per cent inheritance tax on farms valued at least £1 million (£2m for married couples) starting next year sparked national outrage, with farmers saying that they would be forced to sell off land just to pay the tax. Some have even committed suicide to transfer their property to their children before the tax comes into effect.
After over a year of heavy pressure from farmers including largescale tractor protests against the planned raid, the government backed down on Tuesday, with the Times of London reporting that farms valued at £2.5 million or £5 million for married couples will be exempt from death taxes.
Environment Secretary Emma Reynolds said that the government has “listened closely to farmers across the country and we are making changes today to protect more ordinary family farms.”
Tacitly admitting that the initial stance from the government was ill-thought-out, Reynolds added that it was “only right that larger estates contribute more, while we back the farms and trading businesses that are the backbone of Britain’s rural communities”.
While farming groups hailed the reduction as a significant victory, some have argued that the government has not gone far enough in reducing the strain on the embattled industry.
In comments provided to Breitbart London, Reform UK deputy leader Richard Tice said: “Labour’s tax raid on family farms has already been a disaster for the sector, plunging countless farmers into despair, with heartbreaking reports of some taking their own lives in order to save their farms for future generations.
“This cynical climbdown – whilst better than nothing – does little to address the year of anxiety that farmers have faced in planning to protect their livelihoods. Even with the raised threshold, many family farms will still face crippling bills. With British agriculture hanging by a thread, the government must go further and abolish this callous farms tax.”
Questions have also been raised as to the timing of the move, which coincided with the Christmas break for Parliament, meaning that the government was not forced to explain how they plan to make up the shortfall in planned revenue to MPs.
Nevertheless, the backtracking by the government demonstrates the political heft of the farming community, their broad support among the public, and the efficacy of their protest movements. Farmers in Europe have similarly used tractor protests to force concessions on green agenda standards.
More recently, pressure from farmers saw the delay in the approval of the European Union’s Mercosur trade deal with Latin American nations, which farmers have warned will undercut their prices due to labour and regulatory differences, and ultimately threaten their ability to stay in business. This week, Italian PM Giorgia Meloni joined the opposition, demanding that concessions are made to protect European farmers from unfair competition before Rome will agree to sign off on the deal.