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Labour "remains deaf, blind and indifferent” to the economic damage caused by Rachel Reeves’s inheritance tax raid, farmers have warned. The Treasury’s family farm tax legislation, which is accompanied by an impact assessment, said there will be “no significant macroeconomic impacts” at all.
Victoria Vyvyan, president of the Country Land and Business Association (CLA), said: “This government is incapable of listening. The ending of vital inheritance tax reliefs will crush farming and family businesses, but the Treasury remains deaf, blind and indifferent to the damage to the economy.
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“The CLA has made clear, and costed, the consequences of this ideological folly; the loss of jobs, the reduction in gross value added. Together the industry has offered a sensible alternative via the ‘clawback’ mechanism. The Treasury has given no reason for failing to consider an alternative.
Rachel Reeves's Treasury has been blasted over famly farm tax failures (Image: Getty)
Read more: Labour's 'full-blown assault on rural Britain' slammed after Reeves's tax raid
“This is not an impact assessment; it reads like an amateur note from an arrogant government setting and marking its own homework and simply not understanding businesses and food security.
“To be clear, this is a tax burden on businesses, not wealth, delivered without consultation and with derisory engagement. Farmers and family businesses are the backbone of the economy and deserve to be heard by a government that seems hell-bent on pressing ahead, indifferent to the slow but inevitable train crash.”
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A CBI Economic report, published earlier this year, said Rachel Reeves’s reforms will cause over 200,000 job losses and cost the Treasury almost ￡2billion by 2030.
But some estimates have suggested the family farm tax will raise around ￡500 million a year.
The Chancellor said that from April 2026, combined agricultural and business property assets up to ￡1 million will still receive 100% relief but anything above that will be taxed at an effective rate of 20%.
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There is a higher threshold of ￡3 million for couples passing on their farms.
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But asset rich farmers who are cash poor fear they will have to sell off their land - making it unviable for food production - to foot the tax bill.
The Daily Express's Save Britain's Family Farms crusade has demanded a U-turn.
The Treasury has been contacted for comment.
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