Hated farm tax plunges Labour into grave danger of electoral disaster in rural areas

A leading Labour champion of the countryside has warned that her party faces disaster at the ballot box if it loses support in the countryside by forcing farming families to pay inheritance tax.

Baroness Mallalieu warns that the Government has "sacrificed goodwill" and wants minsters to reconsider their decision to impose a 20% inheritance tax on farms worth more than £1million from April 2026.

She said: "I think no Government can afford to lose goodwill so dramatically and quite so quickly."

Warning that Labour cannot win an election without support in the countryside, she said: "It's not possible which is why we were out of office for 14 years."

It is reported that the Department for Environment, Food and Rural Affairs was only informed about the tax decision the night before the Chancellor's Budget.

Baroness Mallalieu, who is president of the Countryside Alliance, said: "It's been put together at great speed without proper consultation, even within government."

She said she keeps meeting people who tell her: "I wish I hadn't voted Labour."

The Baroness understands why the Government would want to crack down on tax avoidance but has to look again at its plans. The National Farmers' Union claims the Government has got its figures wrong and "half of all working farms" could be hit by the change in tax rules.

Farmers protested against the move outside the Welsh Labour conference in Llandudno. A massive demonstration is planned by farmers in London on Tuesday.

A defiant Sir Keir Starmer told the Welsh party: "I will defend our decisions in the Budget all-day long."

Tom Bradshaw, president of the NFU said: "Since the Budget, I've heard about distressed elderly parents who are having to apologise to their children in tears for something that isn't their fault, telling them they're sorry because they feel they're now a burden on the family.

"I've heard from families who can't see any way they can plan for a future which doesn't result in losing their business; men and women who've spent years building up farm businesses now wondering what's the point in carrying on when it's going to be ripped apart.

"The feelings of anger, betrayal and despair are palpable. There is already a mental health crisis in the farming community."

Conservatives are demanding Labour provides a "food security impact assessment".

Shadow Environment Secretary Victoria Atkins said: "Food security is national security. Labour's family farm tax is both heartless and illogical."

Warning of the impact of the tax changes on food supply, she said: "Farmers work 365 days a year to put food on our plates. Labour's tax bomb will see them go out of business, with increased food prices for consumers and a greater reliance on imports.

"This city-dwelling socialist government either doesn't understand or doesn't care."

However, the Government insists all ministers support the policy and it will not change.

A spokeswoman said: "The Government's commitment to our farmers remains steadfast. It's why we have committed £5billion to the farming budget over two years - more money than ever for sustainable food production.

"We understand concerns about changes to Agricultural Property Relief but the majority of those claiming relief will not be affected by these changes. Around 500 claims each year will be impacted and farm-owning couples can pass on up to £3million without paying any inheritance tax.

"This is a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on."