UK farmers could launch French-style revolt over new inheritance tax raid

Farmers drive tractors past parliament during a demonstration against UK food policy earlier this year. AFP

Oh dear. Rachel Reeves presumably believed she was being smart when announcing in her Budget that after 2026, heirs will pay tax when farms are passed on.

As far as the left is concerned the move to charge inheritance tax ticked their loathing boxes. Farmers are perceived as wealthy, they own land. Their farmhouses are often large and comfortable. They profit from supplying food. Theirs is a cosy existence in the fields, they don’t have to go out and look for work like the majority of folk. They can afford it.

It’s a similar set of criteria that saw the Chancellor target another privileged group when she imposed VAT on private school fees. Likewise the non-dom tax regime, which Reeves also scrapped in last week’s Budget.

But in going after farmers, she has made a huge mistake. Pursuing fee-paying parents and well-off foreigners has consequences: some pupils will transfer to the state system, adding to its burden; and non-doms are also employers and investors. However, they do not command popular, emotional support, they’re not able to galvanise the same and they don’t possess an already formidable lobbying organisation, not like the farmers.

Suddenly, as if from nowhere, the countryside is in revolt. Let them, say Labour’s urbanite supporters. Whether they’re still saying that when tractors are blockading Parliament Square and central London, and motorways are reduced to a crawl behind flocks of sheep, is another matter.

A newly re-energised National Farmers’ Union is in full cry, labelling the policy "disastrous". Reeves said that, from April 2026, farms and other business property that has been passed on to heirs tax-free will be subject to inheritance tax. Inheritors will have to pay 20 per cent of their value above £1m, half the headline inheritance tax rate of 40 per cent.

Jeremy Clarkson, a farm owner and one of Britain's best-known broadcasters, has criticised the move to tax farmers. PA

According to the Treasury, about 2,000 farms will be affected by the measure. That’s a disputed figure – some say it will be larger. Even supposing it is 2,000, that is enough to cause economic and social disaster, not to mention to provoke nationwide mayhem.

That’s because the farmers have no cushion. The current farmer dies, and bang, their children, assuming it is them, must find what is by anyone’s standards a considerable sum of money. For example, one quoted farmer is Andrew Smith, 56, on Bodmin Moor, in Cornwall. For more than 100 years, his family have run a cattle farm.

Today, he works with his three sons. They produce on average 2,000 sheep and 30 to 40 cows a year. By his reckoning, they make "no profit" and "just pay the bills". He’s expecting his sons to take over when he dies. But based on the Reeves formula, if the land is worth £5m they will have to pay £800,000.

What that means in effect is that, to raise the levy, the sons must sell a sizeable chunk of the farm. That will mark the end of the Smith farm, as it will no longer be viable. The land could easily be bought by a corporate farm that has no interest in preserving the local ways or protecting the environment, and is not part of the deeply embedded surrounding community. Food production could cease altogether.

Britain's Labour party unveils its first Budget – in pictures

British Chancellor of the Exchequer Rachel Reeves holds up her budget box outside number 11 Downing Street in London. EPA

Ms Reeves leaves 11 Downing Street. AFP

Ms Reeves with her ministerial team, outside No 11 Downing Street. AP

Protesters hold placards as they demonstrate against Ms Reeves' upcoming budget outside Downing Street. EPA

A view of the Autumn Budget. Photo: by Kirsty O'Connor / Treasury

Ms Reeves prepares for the Budget in her office. Photo: Kirsty O'Connor / Treasury

Britain's Prime Minister Keir Starmer meets with Ms Reeves, days before the announcement of the first budget of the new Labour government. Reuters

Repeat that exercise 2,000 times and it’s possible to see how Reeves, in her zeal, has miscalculated. The pages of newspapers and journals across the political spectrum and TV news bulletins are filling with tales of despair. Farmers always make for good copy and pictures. Jeremy Clarkson, the ex-Top Gear presenter turned Cotswolds farmer, is in his element.

It’s naïve economics that signals a void at the heart of this government.

What she and her colleagues display is a fundamental lack of appreciation or understanding of the rural economy. They look at barbed wire fences, locked gates and "Keep Off" signs and remember Karl Marx’s famous dictum that all property is theft and their political hackles rise.

They don’t realise that asset-rich can be accompanied by cash-poor. In their eyes, too, they see people who sit at the beginning of a supply line that ends up in Tesco or Marks & Spencer and assume the farmers must be enjoying similarly healthy profits – cash gained from providing consumers with their daily necessities, from selling milk, bread, vegetables and meat. They see what they view as exploitation and not fulfilling a national service.

It takes no account of the complex processes involved, and the costs and risks. It’s naive economics that signals a void at the heart of this government. Not only do the farmers rightly feel betrayed by Reeves’ boss, Keir Starmer, who previously declared his commitment to farmers, but it shows an absence of thought, of vision. This a step that smacks of pettiness, of point-scoring rather than serious revenue-raising.

As with VAT on school charges and the abolition of non-doms, it suggests Labour abhor those it believes to be wealthy. While independent schools and non-doms will come and go as issues, the targetting of farmers will run and run. It is a boon for the Conservative party and its historic shire county power base.

There were the Tories, on their knees. Now, they have a focal point to rally around, something that will engender widespread acclaim.

Blenheim Palace is the home of one of the UK's biggest landowners. Photo: Blenheim Estate

In putting numbers above human lives (already, one suicide is being claimed because of her farming crackdown) Reeves has misjudged. Labour has won a landslide but its hierarchy remains unpopular. Starmer and his team are seen as distant, out of touch, owing more to a fellow north London metropolitan elite than to working people.

Farmers are fiercely proud and independent, answering to nobody. They’re also employers. They will think nothing of marching on Westminster. It’s as if Starmer and Reeves have learnt nothing from the French, long used to having the roads of Paris and other major cities clogged by bales of hay and piles of manure.

It may seem trivial, in the context of a Budget that said so much. Reeves almost certainly thought that compared to other items, the financial well-being of the UK’s farmers was of little consequence. She should think again, before it is too late.