Ministers have rushed to join public condemnation of the farms tax after Keir Starmer‘s latest humiliating U-turn.
The PM dramatically watered down the controversial inheritance tax raid yesterday, barely a week he defended it in front of a Commons committee.
The move triggered a slew of MPs coming out to reveal they had privately been calling for the shift – even though most voted for it less than a month ago.
There is also near-despair in Labour circles about Downing Street‘s bungling, with fury that Sir Keir has failed to learn the lessons from the previous volte faces on the winter fuel allowance and benefits curbs.
Some insiders have been pointing the finger at Rachel Reeves, warning the premier must stand up to the Treasury when it pushes politically disastrous policies.
Sir Keir is said to have finally intervened personally to broker a compromise with incensed farmers and other family firms that would have been affected.
Keir Starmer dramatically watered down the controversial inheritance tax raid yesterday, barely a week he defended it in front of a Commons committee
Protests have been gathering momentum ever since the policy was announced last year
Many in Labour believe it is now only a matter of time before Sir Keir is forced to cave in over the separate business rates assault on pubs and hospitality.
In a surprise pre-Christmas announcement, Defra said it was easing the threshold at which rural estates would become liable for IHT from April, from £1million to £2.5million.
The move lifts the majority of family farms out of the range of the punitive action announced by the Chancellor at the 2024 Budget, and was welcomed by the NFU.
Environment Secretary Emma Reynolds confirmed the change just eight days after the PM faced MPs and told them the original policy was ‘sensible’.
He stood fast at the Liaison Committee despite being told terminally ill farmers were considering suicide before April as a way to ensure their families avoided the new tax.
It is also less than a month since Penrith and Solway Labour MP Markus Campbell-Savours lost the party whip for voting against the plans.
One senior Labour source said it was another case of ‘SACO – Starmer always chickens out’, a reference to the ‘Taco – Trump Always Chickens Out’ criticism levelled at the US president.
Another lamented that as with winter fuel allowance, they had taken all the political pain, only to back down.
They told the Daily Mail: ‘And we’ll probably be saying the same on business rates and pubs in a few months time.’
Pubs are being hammered by a multiple tax and wages attack, with rises in national Insurance Contributions (NICs), changes to business rate relief and an increase in the national living wage.
Under the original plan unveiled by Rachel Reeves in the 2024 Budget farmers faced paying IHT at a 20 per cent rate on agricultural property and land worth more than £1million from April.
It triggered a huge wave of protests in London from farmers and celebrity landowner Jeremy Clarkson – who also banned Labour MPs from his pub – and a backlash from Labour MPs in rural seats.
But in the PM’s latest U-turn Defra lifted that threshold and admitted that it had been forced to act due to the ‘concerns of the farming community’.
The move was publicly welcomed by Labour MPs including trade minister Chris Bryant, who said it would be ‘much fairer’ for farmers in his south Wales constituency.
Stoke-on-Trent South MP Allison Gardner hailed the climbdown, saying she had been ‘putting the case’ privately despite voting for the cut to reliefs in the Commons on December 2.
The PM’s own ministerial aide, Erith and Thamesmead MP Abena Oppong-Asare also backed the measures in Parliament.
But she welcomed the ‘important step that will protect more family farms and businesses’.
The move was publicly welcomed by Labour MPs including trade minister Chris Bryant, who said it would be ‘much fairer’ for farmers in his south Wales constituency
Labour MPs rushed to endorse the decision to water down the farms plans
A Defra spokesman said the change would halve the number of farms affected by the change to Agricultural Property Relief.
And NFU President Tom Bradshaw said: ‘I am thankful common sense has prevailed and government has listened.
‘From the start the government said it was trying to protect the family farm and the change announced today brings this much closer to reality for many.’
But shadow environment secretary Victoria Atkins said the change to the ‘vindictive’ scheme would be ‘too late for some’, adding: ‘Businesses and lives have been lost.
‘Rural communities will not forget the distress, pain and panic this government has caused them.’
And Reform UK deputy leader Richard Tice said: ‘This cynical climbdown – whilst better than nothing – does little to address the year of anxiety that farmers have faced in planning to protect their livelihoods.
‘Even with the raised threshold, many family farms will still face crippling bills. With British agriculture hanging by a thread, the government must go further and abolish this callous farms tax.’
