Andy Burnham is under pressure from farmers to fully scrap the inheritance tax raid on family farms, as speculation grows over changes in the upcoming Budget statement.
It has been two years since Labour announced its family farm tax, but the anger over the policy has not subsided. Former chancellor Rachel Reeves used her first budget in 2024 to impose inheritance tax on farms worth over £1 million. Previously, farmers could hand down their farms, often asset-rich but cash-poor, without incurring a tax bill.
Government's defence and backlash
The Government argued the change was needed to help pay for public services amid a black hole in the economy. However, the tax raid sparked a furious backlash, with tractors descending on Whitehall as part of noisy protests.
Critics raised fears over the impact on food security at a time when the UK is being hit by extreme weather, and that the measure is stifling investment in farms. There have also been reports of farmers taking their own lives over the changes.
Climbdown and ongoing concerns
Sir Keir Starmer's government was eventually forced into a major climbdown, with the threshold raised to £2.5 million, or £5 million for a married couple. However, farmers and campaigners warn that the policy still threatens the break-up of many family farms, who would be forced to sell off land to pay the 20% rate.
Andy Burnham's arrival at 10 Downing Street has renewed calls for the inheritance tax raid to be fully scrapped as the new Prime Minister looks to build bridges with rural communities. There is speculation that the threshold could be hiked again or the change axed altogether in Chancellor John Healey's statement next week.
The big question is whether it will be enough for Labour to win back the trust of farmers and the countryside after this deeply damaging episode.
