British farmers are the backbone of our nation—producing food, managing the countryside, supporting rural communities and delivering on green and animal welfare commitments. Yet, instead of supporting them, this Labour administration is now putting their future at risk.
In the Autumn Budget 2024, the Government announced reforms to agricultural property relief (APR) from inheritance tax, which introduces an inheritance tax liability on any farm valued at over £1 million, set to take effect in 2026.
The implications of this tax are profound. Many family farms are asset-rich but cash-poor, with modest and highly uncertain incomes. The proposed tax could force these families to sell parts of their farms to pay Inheritance Tax, undermining their livelihoods and threatening the future of British agriculture. For example, a single combine harvester can cost up to a million pounds (or more) - yet Labour’s new policy means that any agricultural assets above this threshold will be taxed at 20%. This equipment is essential to farming and is usually bought with a loan, meaning that interest payments and repaying the principal must come out of the farm’s profits. Agriculture Property Relief (APR) was a specifically designed policy, introduced in the Inheritance Tax Act 1984, to protect Britain’s family farms from being sold and broken up. For this reason, governments of all colours have maintained APR.
This change, being introduced by the Labour Government, forces farmers into an impossible position: either take a huge financial loss on already declining incomes (which fell by up to 60% in the last year), sell off vital assets, or stop farming altogether. The consequences for Britain’s food security, food prices and the survival of family farms will be severe.
The Government's claims that very few farms will be affected are based on out-of-date figures which fail to take into account rising land values. Analysis by the National Farmers’ Union (NFU) shows that, when adjusting for the current market value of farmland and typical farm assets, 75% of commercial family farms are above the £1 million threshold.
All of the UK’s major supermarkets have now publicly stated their concerns over these proposed changes and the Office for Budget Responsibility has cast doubt over whether the measure will raise as much tax as the Chancellor has stated. The OBR has also said these measures will disadvantage older farmers, leaving them little time to restructure their affairs.
Richard has long been a champion of British farmers, and since the Autumn 2024 Budget announcement, has been actively challenging Labour’s destructive tax changes. In Parliament, as Shadow Chief Secretary to the Treasury, he has highlighted the harmful impact of this policy, including in his speech closing the Budget Debate. Beyond the Chamber, he has met regularly with farmers—both in his constituency and at national events—to hear their concerns firsthand. These farms are not merely businesses; they are the lifeblood of our rural economy, passed down through generations, embodying our nation's agricultural heritage.
This tax is badly thought through and it threatens to reduce our food security, put farmers out of business, and end up raising no extra tax at all. Labour’s policy will break up farms generation after generation until they are no longer viable. This is a direct betrayal of farmers, who were previously assured by Labour that APR would not be changed.
Despite growing opposition, the Government has shown no sign of reversing course or mitigating the impact on small family farms. With just a few months until the policy takes effect, Richard will continue to oppose this Government’s damaging, ideological policy.
At a time when food security and affordability are more important than ever, we should be supporting British farmers—not undermining them. The Conservative Party has pledged to repeal the Family Farm Tax if re-elected to government.
You can read more about Richard’s work on this below.
