NFU president Tim Bradshaw said farmers will be ‘furious’, after Treasury officials refused to budge on the controversial proposed changes to inheritance tax rules that many farming families fear could force them to break up their farms.
Farming leaders today met the Treasury to discuss the changes to agricultural property relief and business property relief announced by Chancellor Rachel Reeves in the Autumn Budget.
Exchequer Secretary James Murray and farming minister Dan Zeichner asked to meet with the NFU, TFA (Tenant Farmers Association), CLA (Country Land and Business Association) and CAAV (Central Association of Agricultural Valuers), followed by another meeting with NFU Cymru, NFU Scotland and the Ulster Farmers’ Union.
The meeting took place following a huge industry backlash to the policy, including the NFU’s #StoptheFamilyFarmTax campaign and various rallies and protest events across the country since the announcement.
The organisations had hoped to be discussing a potential solution that would see IHT levied at the full amount on inherited farms when they are sold, not at a discounted rate when they are handed over to the next generation as an ongoing food production business. They believe the ‘clawback’ option could ease the burden on farmers, while raising the same amount for the Treasury as the original proposals.
Disappointment
But in a press conference immediately after the meeting, Mr Bradshaw said the meeting had been a ‘disappointment’. He suggested the Treasury only arranged the meeting, so they could officially say they had met with farmers.
“There has been no movement. The government resolutely believe they are correct in the decisions they have made and that they have been generous in the exemptions they are giving us,” he said.
“They don’t care about the human impact. They don’t care about the inter-generational impact. They don’t care about tenant farmers. The geopolitical situation that the world faces today means food security should be on the top of everybody’s agenda – this should matter for 70 million people living on this island.
“But they don’t care about food production and what this means for food production going forward. So, yes, we are really cross today, and I hope that the government will recognise that there is still an opportunity for them to engage properly and meaningfully in moving forwards.”
Mr Bradshaw stressed that the farming industry recognised the fiscal hole the government is seeking to address, and insisted the ‘clawback’ solution proposed by the industry today would deliver the same yields for Treasury as the Chancellor’s original IHT reforms.
“We are offering them a solution that still raises the funds, but, at the moment, the door is shut from Treasury because they believe they are right. So, the reaction from our members is going to be one of fury, one of real anger and one of desperation that we’ve seen over recent months – and that is what we all feel here today.”
Disingenuous
Prime minister Keir Starmer robustly defended the IHT reforms, which are set to take effect in April 2026, in an interview with ITV News West Country yesterday.
Sir Keir said: “The vast majority of farms will not be impacted by the changes we announced in the Budget. And for those that are affected, they will only pay inheritance tax at half the rate that other people pay, and they can pay it over a number of years,” he said.
He said he ‘understood’ farmers’concerns but said the government needed to prioritise the NHS, adding that farming communities ‘need and want a good NHS in their area’, along with good schools. “They are not easy choices but they are the choices we have made,” he said.
But Mr Bradshaw described his comments as ‘disingenuous’, pointing out that the IHT reforms were forecast to raise £500m, a figure that is questioned by the government Office of Budget Responsibility, versus the £170bn it costs to run the NHS.
Afterwards, in a press statement, Mr Bradshaw explained the proposal put to the Treasury. “Put simply, farmers don’t get money when they inherit, they get the farm, the business asset, and often the debt. Any money they do get, they get when they sell,” he said.
“So, our suggestion, which is almost revenue neutral meaning the Chancellor gets her planned income, is that if an inherited farm is sold then inheritance tax gets paid. Crucially, this would allow family farms that want to continue to produce the nation’s food to do so, while giving the Treasury what it wants.
“We also need to be clear, the current talk that the £500 million this generates, which will be raised on the backs of hard-working and hard-pressed farmers, will rescue the NHS is nonsense. This amount will fund the NHS for a day. It’s disingenuous for ministers to repeat this untruth.
“This is the same Treasury department which admits it has not yet carried out impact assessments on its current policy. Let’s remember, this policy has now been challenged by farming unions and agriculture representatives from across the UK, it has been challenged by the independent Office of Budget Responsibility, by the Efra Select Committee, by tax advisors to the government, and recently the National Preparedness Committee has reminded us that UK food security is in a precarious state.
“And every single major food retailer in the UK has also called for change. Why? Because they can see what this will do to the security of the supply of their products.
“This is a mess, but there is still time for Treasury to review. I urge them to look at the proposal put to them by all the major farming organisations today. It will raise the money needed. It is a way forward which is fair, removes the huge risk to British agriculture, including significant emotional and financial pressures, and delivers for UK food security, something the government continues to insist is a priority.
“Heads in the sand, fingers in ears, zero empathy. What a way for a government to behave.”
Ideological
CLA president Victoria Vyvyan described the government’s position as ‘ideological’ and said the meeting was ‘the most unproductive we have ever had’.
“The Treasury was simply going through the motions and showed no interest in farming or family businesses, and the economic damage that they are inflicting,” she said.
“The CLA could not have made the facts clearer to the Treasury: this inheritance tax policy is already inflicting damage on the economy and is likely to end up hitting tax revenues.”
The CLA has argued that the government’s cap could affect 70,000 UK farms, some as small as 100 acres. It will also have a detrimental impact on farm profitability, with an average 350-acre English arable farm owned by a couple needing to spend 99% of their yearly profit over a decade to afford their inheritance tax bill.
NFU Scotland President Andrew Connon said: “The dismissive attitude of Ministers and Treasury officials made this a deeply frustrating day and one that has left all involved very, very disappointed.
“Sticking to its own flawed evidence, the UK Government and Treasury officials have grossly underestimated the number of hard-working family farms and crofts that will be undermined by its damaging taxation proposals. The fact that they choose to stick their heads in the sand and ignore the growing number of independent studies that highlight the real number of family farms and crofts that will be hit by their proposals is bewildering.”
Solutions
In what now looks like an optimistic joint statement before the meeting, the industry bodies involved in the meeting urged Treasury ministers to be open to seeking solutions.
They said: “We must find a way forward together which is fair, removes the huge risk to British agriculture, including significant emotional and financial pressures, and delivers for UK food security, something the government continues to insist is a priority.
“Across every part of agriculture and its associated industries, and across every part of the UK, the message to the Treasury is the same – work with us to find solutions. Be prepared to listen not only to the UK’s farmers and growers, but also to food retailers and other companies in the food supply chain who have all said there must be change to this policy.”
A government spokesperson said: “Our reforms to Agricultural and Business Property Relief will mean three quarters of estates will continue to pay no inheritance tax at all, whilst the remaining quarter will pay half the inheritance tax that most people pay, and payments can be spread over 10 years, interest-free. This is a fair and balanced approach, which fixes the public services we all rely on.”
The leaders of the agricultural organisations are:
- Tom Bradshaw – NFU President
- Aled Jones – NFU Cymru President
- Victoria Vyvyan – CLA President
- George Dunn – TFA Chief Executive
- Jeremy Moody – CAAV Secretary
- Andrew Connon – NFU Scotland President