NFU warns inheritance tax change puts food security in danger
Keir Starmer was heckled during a speech in Wales after he said he would defend the budget plan
Farmers are warning there could be significant increases to food prices after plans to change inheritance tax were brought in.
It would see estates worth over £1m hit by a 20% levy, which the National Farmer’s Union says is a “short-sighted” decision.
At a speech in Wales today, the Prime Minister was heckled by farmers after announcing he would defend the budget “all day long”.
Although he did not mention farming directly, he did say tough decisions were necessary.
Cost of living "tip of the iceberg"
He said: “I will defend the tough decisions that were necessary to stabilise our economy, and I will defend protecting the payslips of working people, fixing the foundations of our economy and investing in the future of Britain”.
His comments come despite uncertainty earlier in the week about the figures Chancellor Rachel Reeves based the decision on.
Treasury data shows that around three quarters of farmers will pay nothing in inheritance tax as a result of the controversial changes announced in the Budget last month.
However, farmers have challenged the figures, pointing instead to data from Defra which suggests 66% of farm businesses are worth more than the £1 million threshold at which inheritance tax will now have to be paid.
"It is a short-sighted policy"
The NFU’s Ayrshire representative John Kerr says the decision was not discussed with farmers.
He said: “These changes were made with absolutely no consultations with the industry off the back of figures which we are finding to be highly questionable.
“I’d like to see the MPs engaging with the industry to decide that if these inheritance tax changes have to go ahead, they’re at least set at a level which excludes most family farms.”
Mr Kerr warned the result of the decision would be food price inflation which “dwarves” current rates.
"Food security in danger"
He added: “What we have seen so far in terms of the cost of living is only going to be the tip of the iceberg.
“It is a short-sighted policy, and it puts our food security in danger”.
The inheritance tax changes for farming businesses in the Budget limit the 100% relief for farms to only the first £1 million of combined agricultural and business property.
For anything above that, landowners will pay a 20% tax rate, rather than the standard 40% rate of inheritance tax (IHT) applied to other land and property.
The NFU is holding a mass lobby of MPs on Tuesday as part of efforts to force a Government rethink, with 25 members from Scotland planning to attend, while a separate rally is taking place on the same day on Whitehall, opposite Downing Street.