Published : 2 weeks ago, on 19/11/2024

By Sarah Young

LONDON (Reuters) – Thousands of British farmers will march to Parliament Square on Tuesday to protest against the end of an inheritance tax exemption that has helped family farms pass down the generations, saying the move will threaten food production.

Seeking to raise funds to fix public services, finance minister Rachel Reeves announced in October that farmers with land worth more than 1 million pounds ($1.26 million) will no longer be able to leave their farms to their children tax free from 2026.

Opposition to the so-called “tractor tax” is one part of a wider backlash against Reeves’s financial plans. Some of Britain’s biggest companies have warned that her increases to employers’ social security contributions will fuel inflation.

Farmers say the change will threaten the viability of family farms, which often have tight profit margins, and that their children will have to sell land to cover the tax bill, raising the risk that food production will suffer.

Organisers have said around 20,000 farmers could join the London rally on Tuesday. Television presenter turned farmer Jeremy Clarkson is expected to attend.

Reeves said she recognised the strength of feeling but added that the reforms would only target wealthier estates and the most valuable farms, helping fund schools and health services that farmers and families in rural communities rely on.

Protest organisers say that while this event will be peaceful and include children driving toy tractors, rallies could escalate in the future if the government refuses to budge.

Clive Bailye, an arable farmer from central England who helped arrange the demonstration, has said he knows of colleagues who would like to “get a bit more French”, a reference to the militancy of farmers across the Channel.

Some British farmers have already threatened to strike or disrupt food supplies.

They say they suffer unfair competition as cheaper imported produce does not have to meet the same environmental and welfare standards, while their incomes have also been squeezed by supermarkets and hit by climate change.

The government said the tax change would only impact about 500 farms a year, with the tax rate for those paying set at 20%, rather than the usual 40% rate, and payable in instalments over 10 years.

“I do understand that it’s causing concern, but …. I am confident that the vast majority of farms and farmers will not be affected at all by that aspect of the budget,” Prime Minister Keir Starmer, who is attending the G20 summit in Brazil, told reporters when asked about the tax change.

He said the farming sector was set to benefit from the 5 billion pounds in government support over the next two years.

($1 = 0.7923 pounds)

(Reporting by Sarah Young; Editing by Andrew Heavens)