Why farmers won’t take Starmer’s inheritance tax land grab lying down

Good morning.

More than 10,000 of farmers descended on Westminster yesterday to protest against the Labour government’s changes to inheritance tax, which they describe as a “betrayal” that represents an existential threat to British family farming.

From April 2026, agricultural assets exceeding £1m in value will become subject to inheritance tax, at a reduced rate of 20% rather than the standard 40%. Currently, farmers qualify for 100% relief on inheritance tax for agricultural and business property – a mechanism that, while occasionally exploited by wealthy land purchasers, has been crucial in enabling farms to be passed down from generation to generation.

The government has steadfastly maintained that the new proposal is “balanced” and “proportionate” – but that characterisation is vehemently rejected by farming communities, who see the policy as potentially decimating small and medium-sized agricultural enterprises.

To untangle the policy, and the protests, for today’s newsletter I spoke with the Guardian’s environment reporter Helena Horton and Europe environment correspondent Ajit Niranjan about what the UK’s agricultural discontent reveals about broader international farming tensions. That’s right after the headlines.

Five big stories

In depth: ‘An almost unsalvageable tension’

The government claims that only 500 estates a year will pay more under the new scheme, but the National Farmers’ Union (NFU) and the Country Land and Business Association (CLA) estimate that up to 70,000 farms could be affected. Tom Bradshaw, the NFU president, said the government’s figures were “misleading” because they failed to acknowledge that the new rule rolls together agricultural property relief and business property relief, which used to give separate allowances to farmers. Many farmers will pass the £1m asset threshold because a single combine harvester, say, can be worth up to £500,000. However, the government says each parent can pass on half a million tax-free to their children, on top of farm assets. Add it all up and families could hand over £2m to £3m without paying inheritance tax.

Even though Labour has said that this will only affect the wealthiest, in reality aristocratic estates will be able to exploit a loophole – the heritage cultural asset – which means they will not have to pay any inheritance tax at all. “That includes 350 members of the landed gentry,” Helena says.

Many farmers face a financial bind: while their land is worth a lot on paper, their actual farming profits are minimal, which, they say, leaves them unable to pay inheritance tax bills that could run to hundreds of thousands of pounds. The new policy gives farmers 10 years to pay off the tax, but for many people the vast majority, if not all, of the income from their farm will go towards their tax bill. That means the only way to pay is to sell off parts of their land.

“However, farms require a certain amount of land to be viable, because they need the land to grow crops or graze animals, so they may have to sell the whole thing, or as a country we could end up having farms that are less productive,” Helena adds. This tax, many say, will probably further disincentivise people from going into land farming.

How Labour has responded

The government’s stance on the issue remains steadfast in the face of mounting scrutiny. In a revealing pre-protest briefing, BBC Radio 4’s Today programme cited a government communication that dismissively characterised farmers as a “well-organised, self-serving, noisy” collective requiring governmental intervention.

Helena says the government’s refusal to backdown is largely a political calculation rather than a policy one. “They have maintained their position on the winter fuel allowance, which caused huge amounts of anger, and the two-child benefit cap, which led to MPs having the whip revoked.” The government sees a political vulnerability in capitulating here: “A reversal on this could bring a resurgence on those issues,” Helena says.

A European conundrum

The turmoil over farming is not unique to the UK. But British farmers have historically been far more docile than their European counterparts, who have been fiercely clashing with their governments and the EU about the future of the agricultural industry. Farmers in Europe notoriously wield enormous political power – indeed, one-third of the EU’s overall budget goes directly to farmers.

Most countries in Europe have been unable to draft legislation that both supports farmers and their livelihoods and sticks to climate targets. When Germany tried to cut fuel subsidies to farmers, 30,000 protesters descended on Berlin and brought the city to a standstill. “It was a national source of huge, huge conflict,” Ajit says.

In the Netherlands, a country that produces large volumes of dairy products, the government crackdown on harmful nitrogen pollution was met with furious and recurring protests that garnered global attention. Farmers dumped manure on highways and set hay bales alight.

“There has been a lot of valid criticism of the way the Dutch government handled it, but the fundamental idea that farmers should produce less nitrogen in this tiny country where the rivers and soil are filled with the stuff was itself a source of anger,” Ajit said. “The Netherlands has seemingly gotten itself into a situation with an almost unsalvageable tension on this issue”. In Spain, Portugal, Poland and Belgium, farmers have railed against regulation, climate action, high costs and dwindling margins.

Is any country not at war with its farmers?

Denmark is the only country in the world that has pursued a relatively ambitious environmental policy while achieving some level of political consensus. This week, it implemented the world’s first tax on agricultural emissions (including, yes, livestock flatulence). From 2030, farmers will have to pay a levy of 300 kroner (£34) per tonne of methane – by 2035 this will rise to 750 kroner. “You can just imagine the ‘They’re taxing your burger’ headlines if this were introduced in the US, the UK or Germany,” Ajit says.

The far right

As with almost any other divisive issue these days, far-right agitators have of course appropriated the farming crisis as a wedge issue, constructing narratives deeply rooted in social grievance. “Populist and far-right parties find it very easy to exploit this tension – sometimes along really extreme Nazi era ‘blood and soil’ type rhetoric, sometimes in much more muted terms,” Ajit says. The agricultural tensions have transcended European borders, becoming “rallying cries” in the US and Canada, with far-right commentators weaponising European agricultural policy as a cautionary tale of governmental overreach.

Alarmed by the electoral momentum of these fringe movements, centrist and centre-right political entities have responded not by addressing the systemic issues – which has in part caused the income gap between small and big farms to dramatically widen and led to thousands of small farms to shut down each year – but by strategically abandoning green policy initiatives.

“There still needs to be a societal conversation about how we reimagine what farming will be like in the future,” Ajit says. As one protester told Helena: “Farming is not just a business, it’s a way of life.”

What else we’ve been reading

• Got a pothole on your street that’s driving you barmy? Imagine having one for 70 years. Kate McCusker looks into the UK’s longest-running pothole dispute. Toby Moses, head of newsletters

• “He’s hideous, he’s wooden, and he doesn’t really serve any meaningful purpose – at least until the inevitable day he gets grabbed and used as a shield”: Marina Hyde’s acerbic critique of Donald Trump Jr encapsulates the son’s perpetual, public quest for paternal validation. Nimo

• I unashamedly love Bram Stoker’s Dracula, from Keanu Reeves’s God-awful English accent, to Gary Oldman’s majestically camp Count. Andrew Fraser looks back at a time when Francis Ford Coppola used to make great films, rather than great follies. Toby

• Zoe Williams highlights a staggering healthcare crisis: 760,000 women are waiting for gynaecological appointments. If all those women stood in a line, it would stretch from London to Exeter – but it represents just the tip of the NHS’s waiting list crisis. Nimo

• David Squires’s cartoons are always a highlight of the week, so it’s lovely to have him draw on his favourite characters from his 10 years at the Guardian, from Sir Chips (RIP) to Emo Mourinho. Toby

Sport

Tennis | Rafael Nadal’s career is over after the Netherlands defeated Spain 2-1 in the Davis Cup finals in Málaga. Nadal said he had “closed the circle” on his time in tennis as his storied career came to an end. “It’s in some ways good, maybe, if that was my last match,” said Nadal, smiling, immediately after his singles match where he was comfortably defeated 6-4, 6-4 by Botic van de Zandschulp.

Football | Liam Cullen scored twice while Brennan Johnson and Harry Wilson were also on target in Wales’ 4-1 Nations League win against Iceland, a result that saw the host finish top of group B4.

Athletics | The London 2012 race regarded as one of the dirtiest in history has expunged yet another name from the record books after Tatyana Tomashova was stripped of her women’s Olympic 1500m silver medal. The Russian becomes the fifth out of 12 finishers in the final to be disqualified for retrospective doping offences.

The front pages

“Fears grow over Russian hybrid warfare campaign against west” says the Guardian while the Daily Mail has “Putin clears way for nuclear strike”. “Putin raises nuclear stakes” says the Times, the Daily Mirror has “Putin’s nuke threat” while the Financial Times goes with a calmer “Kyiv fires US missiles for first strike inside Russia since Biden lifted curbs”. The Daily Telegraph’s top story is “PM claims BBC has backed him over farm raid” while the Daily Express leads on “If we don’t have a next generation, there will be no future for farming”. The Metro calls it “Farmageddon” as it also reports on the tax protest at Westminster. The i leads with “Extra 100,000 pensioners in poverty after winter fuel cut”.

Today in Focus

Cartoon of the day | Ella Baron

The Upside

A bit of good news to remind you that the world’s not all bad

Fifty years ago this month, a band released a 22-minute 43-second song about a German road network. On paper, Kraftwerk’s Autobahn seemed fated to be consigned to history, and bargain basement boxes, as a flash-in-the-pan novelty record. But, writes Tim Jonze, “astonishingly for a 22-minute 43-second song about the German road network, it somehow managed to change the musical landscape forever”.

Tim took a pilgrimage along the highways of Düsseldorf and Hamburg in honour of the techno pioneers, who, he says, have been influencing other artists for decades with their “pristine synths, robotic vocoders and repetitive beats”.

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