Why are farmers so angry?

The main issue that is infuriating the farming community is the chancellor’s change to agricultural property relief (APR). Steve Reed, the environment secretary, had promised that Labour had no intention of fiddling with this tax loophole designed to protect the family farm.

On Wednesday Rachel Reeves announced that, from April 2026, the first £1m of the value of agricultural properties will be exempt from inheritance tax (IHT), but above that threshold the combined relief available from APR and business property relief (BPR) will drop to 50% of the standard 40% rate of IHT. This means that inheritance tax of 20% will effectively apply on the full value of farms and rural estates above £1m.

Do these changes only affect huge, wealthy farms?

As of 2023, the UK had about 209,000 farms. Though a £1m threshold sounds like it will impact only the wealthy, the Country Land and Business Association (CLA) has estimated it will apply to 70,000 farms. Farmers also tend to be asset-rich and cash poor, and farming is not a popular vocation due to the often low pay, difficult work and increasingly the risk of having entire crops ruined by extreme weather brought by climate breakdown. Often, people farm simply because it’s their family vocation. Farmers argue that if they cannot afford to pass their business down to relatives, the family farm will die out.

Bradshaw said: “It’s clear the government does not understand that family farms are not only small farms, and that just because a farm is a valuable asset it doesn’t mean those who work it are wealthy. Let’s not sugar-coat this, every penny the chancellor saves from this will come directly from the next generation having to break-up their family farm.”

Are the farmers right to be angry?

The tax expert Dan Neidle argued the tax won’t apply to 73% of farmers and pointed out that the exemption was only applied from 1992, and before this “the sky didn’t fall in”. He recommended that those over the threshold buy life insurance to cover the payment of inheritance tax. Reeves defended her decision, telling LBC: “At the moment, you can have some of the wealthiest landowners, not farmers, but wealthy landowners in this country who pay no inheritance tax whatsoever, while middle-class families do. That is not right, and that’s why we’ve closed that loophole.”

Why should non-farmers care?

Preventing farms from being sold or broken up is a public interest issue, too. Food security in the UK is declining in several sectors, making the country more dependent on imports. Labour made a point of this in the run-up to the election, and said its analysis showed that more than 6,300 firms in the UK agricultural sector had gone out of business since 2017.

What else are they upset about?

Another blow to farmers was the confirmation from Defra that their nature-friendly farming budget was not protected. The budget confirms that the government is trying to find £600m in savings past 2025/26 in the farming and flood budget, and the £2.4bn a year fund inherited from the EU is only guaranteed for next year. After that, it will be “reviewed”, which tends to be a Treasury euphemism for a cut. This money is a rounding error for the Treasury but cutting it means fewer protections for nature as farmers cannot afford to keep parts of their land wild and will instead intensify their food production.

Not only that, but Labour is taking a harsher scythe than the Tories to the basic payment scheme payments which are a hangover from the EU’s common agricultural policy. This was the flat rate farmers were paid per acre, which was being slowly phased out and replaced with the nature-friendly farming payments.