After months of pressure, Labour finally blinked. Raising the inheritance tax threshold on farms to £2.5million is an admission that the “Family Farm Tax” was flawed from the outset.
It is a partial victory, and it belongs to the farmers, families, rural businesses and Conservatives who stood up and forced the Government to listen.
But let’s be absolutely clear; they haven’t had some big change of heart. It is a tactical retreat.
The fundamental problem remains. Taxing the transfer of productive, working businesses is not taxing wealth; it is taxing job creators and the nation’s food security. A family farm is not a liquid asset; you cannot sell a field to pay the taxman without destroying the business itself.
And farming is only the most visible casualty of a much wider assault on the economy.
Take small employers. At the same time as squeezing family farms, Labour hiked employers’ National Insurance by over £20billion, increasing the cost of every single job. For rural businesses, already battling higher transport costs and energy prices, this is a direct hit.
Then there are business rates, perhaps the most economically illiterate tax in Britain. Look at Butlins in Minehead, a major employer, an anchor of the local economy, facing an eye-watering £3.8million rise in its rates.
Don't be fooled by this U-turn - Labour is about to rip the beating heart out of rural Britain - James Wright
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The same is happening for pubs across the country. The impact will be business closures, lower investment, fewer jobs and higher prices.
It’s not just the economy; it’s every aspect of our society. Take our courts. Proposals to do away with jury trials in large parts of the criminal courts are an erosion of one of the oldest protections ordinary citizens have against the power of the state. Attempts to suspend council elections in parts of England are another example.
Individually, each of these policies is damaging. Together, they form a pattern, this Labour government does not understand, nor does it care, how the people who make Britain work actually live.
The inheritance tax changes will not punish the speculators Labour claims to target. Investment funds and rewilding charities are structured to avoid these taxes entirely. It is the family businesses, owned for generations, employing local people and feeding the nation, that are left exposed.
This change will come too late for some. I think today of John Charlesworth, a farmer who took his life in October 2024, having been “growing more and more anxious about inheritance tax and the implications for the farm”.
This Government did not need to pick a fight with the countryside. It chose to. And while it has edged backwards under pressure, the broader agenda remains one of higher taxes, higher costs and less freedom.
Labour may hope this U-turn draws a line under the issue. It won’t. Farmers, employers and rural communities will remember who stood up for them, and who only listened when the pressure became unbearable.
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