| We've had an influx of muddy wellies and flat caps in parliament today as farmers protest against the changes to inheritance tax announced in last month's budget. They marched on Whitehall, tractor horns wailing and accompanied by famous faces including Jeremy Clarkson and Andrew Lloyd-Webber, before descending on parliament to personally lobby MPs against the plan to levy inheritance tax of 20% on agricultural assets worth over £1 million. Politicians I have only ever seen in navy suits were suddenly donning wax jackets, and all around the estate I saw terrified-looking MPs sitting with groups of farmers listening to their concerns.
What they've been hearing is that Rachel Reeves' changes — which will end the previous exemption for agricultural land, albeit at the lower rate of 20% compared to the standard 40%, and only on assets worth over £1 million — will cause farmers to sell land to pay their taxes, breaking up family farms, causing some closures, and, ultimately, having a damaging effect on food security for the entire country. Keir Starmer and his cabinet have insisted the change will only affect about 500 estates a year, leaving the "vast majority" unaffected — a figure contested by farming bodies, who estimate as many as 70,000 farms could be impacted. Labour has also argued that the change is necessary to fund public services, and that the tweak could benefit farmers in the long run, by ending what it describes as a favored trick of the super-rich: buying agricultural land to avoid paying inheritance tax.  Photographer: Chris J. Ratcliffe/Bloomberg But as the chap above helpfully puts it, the tax change comes as "the last straw" for farmers. They've seen higher costs since Brexit, with energy and fertilizer rising more after Russia's invasion of Ukraine. (In fact, another sore spot with Reeves is fertilizer costs — which could get even worse with a carbon tax also in the budget.) Now farmers are making their discontent known, with some proclaiming regret at voting Labour. Will it make a difference? Despite the very visible lobbying today, the government is not showing any sign of changing their position. Much like pensioners hit by the winter fuel change, farmers are not seen as voters Labour needs to hold on to, even though by some estimates there are now as many as 100 Labour MPs now in rural seats (depending how you measure it). It isn't the political hit the government will be worried about, as much as the niggling fear that farmers will be right in their warnings about the economic impact — i.e. food shortages and rising prices — down the line. This is the biggest issue that has cut through since the budget, but for most within Labour, it could be worse. As one self-aware Labour MP remarked to me recently, their party is actually getting away with a huge tax increase of £40 billion for relatively little political expenditure. For all the businesses deeply worried by the increase in National Insurance, Labour has managed to land the idea in most people's minds that tax rises aren't falling on working people, even though as any good economist will tell you — including our own Stephanie Flanders — it amounts to the same thing in the medium- and long-term. Have the Conservatives made an early error by focusing ire on the "family farm tax" and not on the "jobs tax"? There is a possible world in which every time someone in the coming year is denied a pay rise, they link that with Rachel Reeves. But so far that link hasn't been made and most Labour MPs, for all the grief from farmers, are pretty chipper about how the budget landed. Want this in your inbox each weekday? You can sign up here. | 
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