Protesting farmers say ‘we’re on our knees’ as Keir Starmer blames inheritance tax row on ‘Tory concern mongering’ – whereas consultants say 75,000 farm house owners will probably be hit by Budget raid

Farmers have said they are ‘on our knees’ as they arrived in central London with their tractors in protest of Keir Starmer‘s inheritance tax raid announced in the Budget.

Thousands of farmers gathered around Parliament today, just weeks after a similar protest saw former Top Gear presenter Jeremy Clarkson lead speeches in Whitehall. 

Labour has said its support for farmers is ‘steadfast’ – but there is ongoing outrage from rural communities about Rachel Reeves‘ announcement that farms will no longer be exempt from paying inheritance tax. 

Today in the House of Commons Sir Keir Starmer told Prime Minister’s Questions the row is being caused by ‘Tory fearmongering’.

Answering a question from Ed Davey, he said: ‘In relation to inheritance tax, as he knows the threshold is £3 million and the vast majority of farmers will be unaffected despite the fearmongering of the party opposite’.

It comes as a new government report published today warned long term declines in ‘natural capital’ – resources such as clean water, healthy soils and wildlife – is a pressing risk to UK food production. 

After 13,000 people rallied in Westminster against the Budget last month, tractors are expected to travel into the capital from across the country, including from Exmoor, Shropshire, Somerset and the home counties, for the latest protest.

Today tax experts have said that up to 75,000 farm owners could be hit by the tax changes. 

Dozens of tractors lined up in Whitehalll, with the first arriving with much fanfare, honking and drawing cheers from some passersby near Parliament Square in central London.

Some were decorated with signs that read: ‘No farmers, no food’, ‘Not hungry, thank a farmer’, and ‘Save British Farming’.

Another sign read ‘Starmer Farmer Harmer’, and a second one ‘Reeves and Starmer, grave robbers’.

Will Elliott, aged 50, drove his tractor for three hours from his farm near Grafham, south of Guildford, in Surrey, to attend the protest. His farm, Whipley Manor Farm, predominantly grows cereal crops and grass that they make into hay.

He said: ‘The industry is already down on its knees and this is just another kick in the teeth. My family have been farming in Surrey for nine generations within about 5 miles. I’m the fourth generation to run our current farm.

‘Obviously, the idea is that we want to pass it down to the next generation, but farmers are asset-rich, cash poor, we’re not going to have the money to pay the inheritance tax. In Surrey, for instance, it doesn’t take much to reach the million pounds.’

He argues the Government have been ‘misguided’ on farmers’ ability to pay inheritance tax, forcing farmers to sell parts of their land, cattle, flock, or machinery to afford to pay for the tax.

He said: ‘They got the wrong data and way more farmers are going to be affected than what they say. We’ll lose the fabric of the rural countryside. 

‘Farms will get split up, the land is not going to get taken care of, we’ll lose habitat – and more importantly, we’re not going to be able to grow the food if we haven’t got the farms.’

It comes as the Environment, Food and Rural Affairs Committee kicks off today as farmers start to gather outside the Palace of Westminster.

MPs are first hearing from countryside and farming leaders and financial experts on the effects of the changes to inheritance tax.

Committee chairman Alistair Carmichael said: ‘This morning, we are going to be scrutinising the potential impacts of the proposed changes to agricultural property relief and business property relief on the farming sector.’

Meanwhile hundreds of farmers are expected to bring their machines to the streets around Parliament as Sir Keir Starmer faces Prime Minister’s Questions as rural communities continued to express anger over changes to inheritance tax.

The ‘RIP British Farming’ protest has been organised by Kent Fairness for Farmers and Save British Farming in response to the ‘toxic’ Budget, which included changes to inheritance tax for agricultural businesses and a faster phaseout of EU-era subsidies in favour of environmental payments.

The protest comes as the Government publishes a report on Wednesday analysing the state of UK food security.

And MPs on the Environment, Food and Rural Affairs Committee will hear from countryside and farming leaders and financial experts on the impacts of the changes to inheritance tax.

Ahead of the protest, the Environment Department (Defra) said it had put £343 million into the rural economy last week, in payments for nature-friendly farming activities, benefiting more than 31,000 farmers.

Defra also announced new details of its environmental land management schemes, which pay farmers for ‘public goods’ ranging from healthy soil, rivers and hedgerows, to habitat creation and large-scale nature restoration work.  

And today a Government report found the UK was 75 percent self-sufficient in the food that can be grown in this country in 2023, and produced the equivalent of 62 percent of overall food consumed.

The figures are broadly unchanged over the past two decades, but the report also warned long term declines in ‘natural capital’ – resources such as clean water, healthy soils and wildlife – is a pressing risk to UK food production.

The report also said extreme weather continues to have a significant effect on domestic production, particularly arable crops, fruit and vegetables.

And the UK continues to be ‘highly dependent’ on imports to meet demand for fruit, vegetables and seafood, which are significant sources of nutrients for consumers, and many of the countries this food is imported from face their own climate-related challenges and sustainability risks, the report said.

The food security report must be published every three years under the Agriculture Act 2020, and is the first since December 2021.

MPs heard today that the Budget has not looked at a tax loophole where those who sell assets and then buy agricultural land can avoid capital gains tax on those original assets sold.

Dr Arun Advani, director of the think tank CenTax, said changing these rules would not affect farmers who are currently using the land for agriculture and food production.

He added that a fairly standard tax planning strategy would be to sell assets, get the large gain, purchase agricultural property, and hold that until death when there is both relief of inheritance tax and capital gains tax.

‘So I think something that hasn’t seemed to have been looked at at this Budget, but that certainly should be scrutinised, because it causes this exact problem – the fact that relief for any asset I’m selling, if I’m using it to buy agricultural land, is a way in which I can avoid the capital gains and currently inheritance tax.

‘And that creates demand for agricultural land from people who have no desire to farm the land but want to buy it because they’re getting it from a tax minimisation perspective.’

Asked why the Government did not consider this, he laughed and said: ‘I can’t really speak for what the Government does. Hopefully after this select committee, you can ask the ministers about that. I have no idea.’

Later a leading estates lawyer told the committee the tax change is going to be ‘unaffordable’ for many farmers, which means they are going to have to either ‘sell land or sell up’.

Speaking to the Environment Committee, Stuart Maggs, head of tax and partner at Howes Percival law firm, said for years best advice to farmers has been to retain the farm until death, which means a lot of 70 to 90-year-olds are still working on the farms.

‘Even if you’ve got the next generation involved, to bring the average down, the person who owns the farm has naturally been at the elder end of the spectrum,’ he told MPs.

‘So this change coming in now has really hit home to farmers, because they’re in a situation where there’s nothing they can do about it. They can’t give away and survive seven years.’

He added that rules called gifts with reservation means that if one generation gives the land to the younger generation but still enjoys the benefit from it – i.e. they live on the land or it’s paying for them in their older age – they will get taxed.

It means this charge ‘is going to be a burden’, he added. ‘With agriculture estates getting a rate of return of about half a per cent to 1%, it simply means this going to be unaffordable. And so farms are going to have to sell land or sell up. And it’s going to happen a lot.’

Environment Secretary Steve Reed insisted ‘our commitment to farmers is steadfast’, as he said the cash was part of a £5 billion two-year farming budget which was ‘the largest ever directed at sustainable food production in our country’s history’.

His comments echoed those of Downing Street ahead of the protest on Wednesday.

Asked if Sir Keir was concerned farmers could get more militant and restrict food supplies, a spokesman for the PM said: ‘We have been very clear we are not going to change course on this policy.

‘It was necessary to take tough decisions at the Budget and the spending review and those decisions remain.

‘But our commitment to farmers is steadfast and our message to farmers is clear, that is why we provided £5 billion to the farming budget over two years including more money than ever for sustainable food production.’

Last month an estimated 13,000 people gathered in Westminster to protest against the Budget’s impact on farming, with composer Andrew Lloyd Webber, TV personality Jeremy Clarkson and leading politicians Kemi Badenoch, Sir Ed Davey and Nigel Farage among them.