The Death of the Family Farm? Labour, the Budget, and the politics of the countryside

Ellie Anderson
05/12/2024

Late last month, over 13,000 farmers descended on central London. Travelling from across the country, the mood – and anger – was palpable across Westminster. Led by the enigmatic Jeremy Clarkson, the renowned celebrity farmer, this protest had been weeks in the making. 

It came following the Chancellor’s announcement at the Autumn Budget on 30th October, stating that full APR (Agricultural Property Relief) from inheritance tax would cease from April 2026. From that date, full relief would apply up to £1 million and 50 percent relief thereafter, for both APR and BPR (Business Property Relief) combined. It was part of a shopping list of fiscal announcements ticked off – to fill the ‘£22 billion black hole’ left by the previous Conservative administration.

With the policy expected to kick in from the 6th of April – the beginning of the next financial year – many have proclaimed it the end of the ‘family farm’ in the UK. 

The average farmer earns just £28,000 a year, and over 25 percent of farmers in the UK live below the poverty line. In recent years, many have also had to grapple with the funding changes associated with Brexit, before which the EU subsidised 86 percent of British farms. 

On top of this, with the cost of fertiliser rising to between 120-165 percent following the Russian invasion of Ukraine, and pressure to support rewilding and habitat restoration, many farmers are feeling under intense strain, and using this latest announcement to voice years of anguish and discontent.

But what does the announcement actually mean for farming in the UK?

It’s easy to get entangled with the economic jargon within the policy. Many farmers claim they will have to sell off their land or hand the tax burden – of which farms have been exempt, on the basis that they are economically vulnerable – onto their children.

With over 200,000 farms in the UK, the Environment Secretary, Steve Reed, in his attempt to quell the anger, said: “Only about 500 estates a year will pay more under the new scheme than they do today”. 

The claim comes from the number of estates that qualified for APR last year. However, many in the industry have said that this figure is misleading. Jeremy Moody from the Central Association of Agricultural Valuers which values farm estates, helpfully explained that for the Government to see an APR claim as the sum total of a farm is to “miss the point that APR is only about land and buildings, leaving machinery, livestock, deadstock, other farming assets and diversified activities for BPR (that’s business property relief) … The lack of data given for BPR claims is concerning when we seek an informed debate”.

To put it simply, the industry has said the Government has made the estimate without pulling in all the facts, and estimates that in fact, as many as 70,000 farms could be affected.

The Farming Minister, Daniel Zeichner, openly accepted that there was a “discrepancy” in the numbers, with the National Farmers’ Unions (NFU) – key players in this debate – arguing that the Government’s own figures show that 66 percent of the UK’s 209,000 farms are worth more than £1 million, and so potentially eligible to be taxed.

Now hinting at more unrest, Tom Bradshaw, the general secretary of the NFU, bemoaned the “industry has been betrayed”. It comes as farmers have threatened “militant action” over the policy, which they argue will cause food shortages and the breakup of family farms.

Though this back and forth between the industry and Government is set to continue, the question many are asking now is why Labour has done this.

In winning an historic landslide majority in July, Labour promised to “restore stability, increase investment, and reform the economy”. The swinging of the political pendulum towards Labour – and the profound anger towards the Conservatives in many former ‘true blue’ areas – led to Labour representing over 100 rural constituencies.

However, Labour Peer – and President of the Countryside Alliance – Ann Mallalieu has said the party “sacrificed goodwill” with these constituencies, recounting that Labour’s supporters have told her they now regretted voting for the party.

It won’t be long before this claim is put to the test. With local and devolved elections looming, we’ll get the first indication of the electoral impact of these policy decisions in the predominantly rural county council elections scheduled for May 2025. 

What Labour now must consider is what it can offer farming in return. As an industry that has been historically important to Britain’s prosperity and identity – and is now important to Labour electorally – any government looking to win re-election must have a positive story to tell about the countryside.