‘Patronising’ Welsh First Minister sparks fury by telling farmers to ‘relax’ over Labour’s inheritance tax seize – as Rachel Reeves dismisses bid to water down raid amid Cabinet ‘cut up’

Eluned Morgan, the Welsh First Minister, sparked fury today after she told farmers to ‘calm down a bit’ over Labour’s inheritance tax raid.

As she marked 100 days of being in charge of the Labour-run Welsh Government, Baroness Morgan waded into the row over Chancellor Rachel Reeves‘ Budget.

Farming groups are seething after Ms Reeves last month announced controversial changes to inheritance tax, which have been dubbed Labour’s ‘family farms tax’.

The Chancellor used her Budget to impose inheritance tax on previously exempt agricultural estates worth over £1million, at a rate of 20 per cent.

Farmers have warned that move will be ‘disastrous’ for the industry, wiping out family businesses that will be forced to sell to pay death duties. 

But, speaking to BBC Radio 5 Live, Baroness Morgan said initial calculations showed there were a ‘tiny proportion’ of farms affected.

‘I just think we should just all calm down a bit until we are clear about how many farms will be affected, and we are crunching the numbers on that,’ she said.

It came as Ms Reeves slapped down suggestions she could water down her tax raid on farmers amid claims of a split between herself and fellow Cabinet ministers.

Baroness Morgan was branded ‘patronising’ for her comments, with Labour said to be suffering a ‘political and PR crisis’ over the tax row.

Mo Metcalf-Fisher, director of external affairs at the Countryside Alliance said: ‘Talk about misjudging the public mood.

‘These patronising comments suggest the First Minister is lacking in basic empathy for the people that feed us and maintain our countryside, despite the many obstacles in their way.

‘Rather than tell farmers how to behave, perhaps the Government should prioritise clearing up exactly how many farms will be affected by this appalling family farm tax.

‘This is increasingly becoming a political and PR crisis’. 

The Chancellor plans to limit the 100 per cent relief for family farms to only the first £1million of combined agricultural and business property.

For anything above that, landowners will pay a 20 per cent tax rate, rather than the standard 40 per cent rate of inheritance tax applied to other land and property.

Farmers are set to stage protests against the Budget measures, while many MPs have said their postboxes are full of complaints from constituents.

Some 10,000 farmers are due in London next week for a march against the tax change, with almost 2,000 also expected to meet up with MPs in a ‘mass lobbying event’ by the National Farmers’ Union on Tuesday.

There have even been threats of strikes that could hit supplies of meat, barley and oats.

Amid the backlash, Environment Secretary Steve Reed is reported to have been pushing for the tax changes to be watered down.

Options floated by his Department for Environment, Food and Rural Affairs (DEFRA) include exempting people over the age of 80 who will not have time to adjust their plans, according to the BBC. 

But Ms Reeves has slapped down the idea with Treasury sources saying they are not considering ‘mitigations’. 

Earlier this week, Sir Keir Starmer was forced to distance himself from a Labour ex-adviser’s claim that Britain ‘doesn’t need small farmers’ and could ‘do without’ the industry.

The PM dismissed a suggestion by John McTernan, a former top aide to Tony Blair, that Labour could do to farmers ‘what Margaret Thatcher did to the miners’.

The senior figure, a prominent supporter of Sir Keir, sparked outrage among farming groups and senior Tories with his remarks.

Speaking in the House of Commons today, Mr Reed insisted the Government’s figures on the number of farmers impacted by rises in inheritance tax are ‘crystal clear’.

The Environment Secretary remained adamant that ‘three quarters of farmers will pay nothing’ as a result of the changes as he faced questions from the Conservatives about whether the figures had been ‘checked before the Budget’.

The NFU has disputed the Government’s claims about the number of farms that will be impacted, warning that plans to roll together allowances for both IHT relief and business property relief could leave far more agricultural businesses exposed to the tax.

Tory shadow environment secretary Victoria Atkins told the Commons: ‘The Secretary of State and the food minister claim that their family farm tax will affect only a quarter of farms.

‘Yet after informed questioning by the NFU, the CLA (Country Land and Business Association), the TFA (Tenant Farmers Association) and this side of the House, the minister has now admitted they need to check their figures.

‘Should the cost of the family farm tax to farming families have been checked before the Budget?’

Mr Reed replied: ‘HMRC data is crystal clear. Three quarters of farmers will pay nothing as a result of these changes, family farming will continue into future generations, just as it should do.’

Ms Atkins said: ‘He can explain the veracity and the accuracy of his figures next week, when thousands of farmers are coming to Westminster to rally against the family farm tax, the delinking of payments, the hike in national insurance and other tax hikes on working farms as a result of this Budget.’

Farmers are ‘reasonable people’, Mr Reed said, who will ‘want to look at the facts’.

He said: ‘They, like everybody else, will see that if they drill into that HMRC data, three quarters of them will end up paying no more under the new system than they do today.’

A Treasury spokesman said: ‘With public services crumbling, a £22billion fiscal hole inherited from the previous government and 40 per cent of Agricultural Property Relief going to the 7 per cent wealthiest claimants, we made a difficult decision to ensure the relief is fiscally sustainable.’

‘Around 500 claims each year will be impacted and farm-owning couples can pass on up to £3m without paying any inheritance tax – this is a fair and balanced approach.’

A Defra spokesperson said: ‘All Ministers support the policy and it will not change.’