Food prices could rise due to Rachel Reeves’s farm inheritance tax change in budget, farmers warn
Rachel Reeves’ changes to agricultural inheritance tax could lead to food price rises and will have a “catastrophic” impact on family farms, farmers have warned.
The chancellor announced in Wednesday’s budget inheritance tax of 50%, at an effective rate of 20%, will be imposed on farms worth over £1m, where previously they were exempt.
Her announcement has been met with anger from rural communities, with celebrities such as Jeremy Clarkson saying farmers “have been shafted”, and Kirstie Allsopp saying the chancellor has “destroyed the ability [for farmers] to pass farms on to their children”.
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Farmers and the Conservative shadow farming minister have told Sky News the plan, which is due to begin in April 2026, risks pushing up food prices due to uncertainty and the possibility of farms having to be sold up so less food is produced.
National Farmers’ Union (NFU) president Tom Bradshaw said the policy “will snatch away” the next generation’s ability to produce British food.
Fourth generation Warwickshire farmer Bizza Walters, 26, told Sky News she would be forced to sell some of her family farm’s 500 acres to pay the £7,500 a month she has estimated she would have to pay for 10 years if her father and uncles, who own the farm, died.
“Our margins and costs are so tight and anything we make is reinvested, so I’d have to sell land which would not go back into food production,” she said.
“They’re going to have to come to their senses because food prices will go up because we won’t be able to produce as much food.”
Jeremy Clarkson, whose TV show has opened up the struggles of farming to millions, said farmers have ‘been shafted’. Pic: PA
Country Land and Business Association (CLA) president Victoria Vyvyan told Sky News the government has “conflated a business asset with personal wealth” in their bid to tax the wealthy.
But she said farms are businesses and most run on tight margins with little spare cash.
She added a £1m farm would only be about 100 acres in most UK areas, “which is not a viable business proposition”.
The £1m cap could also rack up quite quickly as it is not just the value of land, but also livestock, farmhouses, sheds and machinery.
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Most farms are run on small margins. Pic: Sky News
Conservative shadow farming minister Robbie Moore, who is from a farming background, said the move is “catastrophic for family farms”.
“This is effectively thievery, putting two fingers up to the farming industry,” he told Sky News as he accused the government of failing to understand how farming works.
“They’ve completely underestimated the effect this will have, it creates a lot of uncertainty in terms of how that land will be managed.
“If you want to invest in that holding to produce food, you need certainty, and what the announcement creates is uncertainty.
“It will have a direct impact on the food security agenda and food prices further down the line.
“If you’re wanting to work hard to hand farmland down to the next generation, you’re completely disincentivised to do that.”
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He reiterated what lots of farmers have been saying: that their land may be high in value, but they are struggling with cashflows, so paying tax to continue the family business may not be viable for many.
NFU president Mr Bradshaw added: “This budget not only threatens family farms but will also make producing food more expensive.
“This means more cost for farmers who simply cannot absorb it, and it will have to be borne by someone.
“Farmers are down to the bone and gristle, who is going to carry these costs?”
The government says it is still committed to supporting farmers and “the vital role they play to feed our nation”.
Speaking on Thursday, the chancellor described the changes as “fair and proportionate”.
“We needed to raise money in the budget yesterday, and we know that there are a lot of landowners who are very wealthy, some who buy land to avoid paying inheritance tax because previously there was no inheritance tax,” she said.
The Department for Environment, Food and Rural Affairs (DEFRA) has been contacted for comment.
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Children with special needs will ‘always’ have ‘legal right’ to support, education secretary says
The education secretary has said children with special needs will “always” have a legal right to additional support as she sought to quell a looming row over potential cuts.
The government is facing a potential repeat of the debacle over welfare reform due to suggestions it could scrap tailored plans for children and young people with special needs in the classroom.
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Speaking in the Commons on Monday, Bridget Phillipson failed to rule out abolishing education, health and care plans (EHCPs) – legally-binding plans to ensure children and young people receive bespoke support in either mainstream or specialist schools.
Laura Trott, the shadow education secretary, said parents’ anxiety was “through the roof” following reports over the weekend that EHCPs could be scrapped.
She said parents “need and deserve answers” and asked: “Can she confirm that no parent or child will have their right to support reduced, replaced or removed as a result of her planned changes?”
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Ms Phillipson said SEND provision was a “serious and complex area” and that the government’s plans would be set out in a white paper that would be published later in the year.
“I would say to all parents of children with SEND, there is no responsibility I take more seriously than our responsibility to some of the most vulnerable children in our country,” she said.
“We will ensure, as a government, that children get better access to more support, strengthened support, with a much sharper focus on early intervention.”
ECHPs are drawn up by local councils and are available to children and young people aged up to 25 who need more support than is provided by the Special Educational Needs and Disabilities (SEND) budget.
They identify educational, health and social needs and set out the additional support to meet those needs.
In total, there were 638,745 EHCPs in place in January 2025 – up 10.8% on the same point last year.
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One Labour MP said they were concerned the government risked making the “same mistakes” over ECHPs as it did with the row over welfare, when it was eventually forced into a humiliating climbdown in the face of opposition by Labour MPs.
“The political risk is much higher even than with welfare, and I’m worried it’s being driven by a need to save money which it shouldn’t be,” they told Sky News.
“Some colleagues are rebel ready.”
The MP said the government should be “charting a transition from where we are now to where we need to be”, adding: “That may well be a future without ECHPs, because there is mainstream capacity – but that cannot be a removal of current provision.”
Later in the debate, Ms Phillipson said children with special educational needs and disabilities would “always” have a “legal right” to additional support as she accused a Conservative MP of attempting to “scare” parents.
“The guiding principle of any reform to the SEND system that we will set out will be about better support for children, strengthened support for children and improved support for children, both inside and outside of special schools,” she said.
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“Improved inclusivity in mainstream schools, more specialist provision in mainstream schools, and absolutely drawing on the expertise of the specialist sector in creating the places where we need them, there will always be a legal right … to the additional support… that children with SEND need.”
Her words were echoed by schools minister Catherine McKinnell, who also did not rule out changing ECHPs.
She told the Politics Hub With Sophy Ridge that the government was “focused on reforming the whole system”.
“Children and families have been left in a system where they’ve had to fight for their child’s education, and that has to change,” she said.
She added that EHCPs have not necessarily “fixed the situation” for some children – but for others it’s “really important”.
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Government to ban ‘appalling’ non-disclosure agreements that silence victims of abuse at work
Victims will no longer have to “suffer in silence”, the government has said, as it pledges to ban non-disclosure agreements (NDAs) designed to silence staff who’ve suffered harassment or discrimination.
Accusers of Harvey Weinstein, the former film producer and convicted sex offender, are among many in recent years who had to breach such agreements in order to speak out.
Labour has suggested an extra section in the Employment Rights Bill that would void NDAs that are intended to stop employees going public about harassment or discrimination.
The government said this would allow victims to come forward about their situation rather than remain “stuck in unwanted situations, through fear or desperation”.
Zelda Perkins, former assistant to Harvey Weinstein, led the calls for wrongful NDAs to be banned. Pic: Reuters
Zelda Perkins, Weinstein’s former assistant and founder of Can’t Buy My Silence UK, said the changes would mark a “huge milestone” in combatting the “abuse of power”.
She added: “This victory belongs to the people who broke their NDAs, who risked everything to speak the truth when they were told they couldn’t. Without their courage, none of this would be happening.”
Deputy prime minister Angela Rayner said the government had “heard the calls from victims of harassment and discrimination” and was taking action to prevent people from having to “suffer in silence”.
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An NDA is a broad term that describes any agreement that restricts what a signatory can say about something and was originally intended to protect commercially sensitive information.
Currently, a business can take an employee to court and seek compensation if they think a NDA has been broken – even if that person is a victim or witness of harassment or discrimination.
“Many high profile cases” have revealed NDAs are being manipulated to prevent people “speaking out about horrific experiences in the workplace”, the government said.
Announcing the amendments, employment minister Justin Madders said: “The misuse of NDAs to silence victims of harassment or discrimination is an appalling practice that this government has been determined to end.”
The bill is currently in the House of Lords, where it will be debated on 14 July, before going on to be discussed by MPs as well.
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