Members of the National Farmers' Union attend a protest against the planned changes to tax rules, in London, on Nov. 19.Kin Cheung/The Associated Press
Thousands of farmers gathered outside Britain’s Parliament buildings in central London on Tuesday to protest against a series of proposed tax changes and vent their frustrations about the new Labour government.
The demonstration marked the first major challenge to Prime Minister Keir Starmer since Labour swept to power in July, ending 14 years of Conservative rule.
Farmers have been furious over proposals announced in the government’s recent budget that would remove a long-standing exemption to inheritance tax for agricultural holdings. While the proposal was a relatively small part of the budget, it has struck a nerve with the public and Mr. Starmer has faced a fierce backlash.
Police said around 10,000 people congregated outside Westminster and near the Prime Minister’s official residence on Downing Street in a steady drizzle on Tuesday. Many carried signs slamming Mr. Starmer and the government, and a couple of tractors blocked the road near Downing Street.
“Farming is still very, very tough,” said Tim Basey-Fisher, who came to the rally with his son, Matthew, and carried a banner that read, “No farmers. No food. No future.” Mr. Basey-Fisher runs an 850 acre farm in Suffolk, in eastern England, where he grows wheat, barley and sugar beets. The budget change “will kill our farm and all family farms,” he said.
Under the proposal, anyone who inherits farm assets worth more than £1-million ($1.8-million) will have to pay a 20-per-cent inheritance tax as of April, 2026. The rate is half the rate of tax applied to other inherited assets and the government has increased several exemptions that would lift the threshold to around £3-million for most couples.
The proposal is expected to raise up to £520-million annually and is part of a package of tax increases in the budget worth £40-billion.
Rachel Reeves, the Chancellor of the Exchequer, has defended the measure and said it was unfair for farmers to continue to be excluded from the tax, which other business owners must pay.
The reforms “ensure that wealthier estates and the most valuable farms pay their fair share to invest in our schools and health services that farmers and families in rural communities rely on,” she said when announcing the plan.
The Treasury Department has estimated that only around 500 farmers would be subject to the tax.
That figure has been challenged by several groups, including the Country Land and Business Association, which argues that the change will affect as many as 70,000 farmers because the value of farmland keeps rising. Most farmers, it says, are land rich but cash poor, and a younger generation would only be able to cover the tax by selling land.
Stephanie Chick said her family’s 1,000 acre farm in Dorset, in southwest England, is worth around £10-million, but she barely breaks even growing wheat, barley and canola. The farm is owned by her parents, who are in their 90s. Passing it on to her and her siblings would incur a huge tax bill, even with the £3-million exemptions.
“It will destroy us,” she said Tuesday as she stood with her son at the demonstration. “It would be a sad day if it stays like this.”
Mr. Basey-Fisher said his farm is worth around £5-million and his son would have to sell part of it to cover the inheritance tax – but “the farm wouldn’t be viable if he did that.” He barely breaks even, he added, and supplements his farm income by leasing some of his buildings as warehouse space.
According to figures released this month from the Department for Environment Food and Rural Affairs, average farm incomes fell for all types of farmers last year, including by 73 per cent for cereal farmers, to £39,400 ($70,000).
Elizabeth Jenkins attended the demonstration with her sister, Sarah. They both live in London and have no connection to farming but believe the government’s plan will ruin family farms.
“The change is appalling,” Ms. Jenkins said. “We need people who are dedicated to providing food to feed our population. We’re not so sufficient in food, but we still have a high proportion of domestic production, and this government wants to destroy it.”
In a statement on Tuesday, Mr. Starmer insisted that the proposal was fair. “I’m very confident that the vast majority of farms will be totally unaffected,” he said.
He added that people outside urban centres would benefit from the overall plans announced in the budget. “I know that in rural communities – I grew up in one – we also need really good schools, really good hospitals and we need houses that people could afford to live in, and they were the measures that we invested heavily in the budget,” he said.