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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.

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“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 carrying mushrooms at the opening of his new pub, The Farmer's Dog.
Pic: PA
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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.

Listen: Is the farmers’ inheritance tax the new pasty tax?

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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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Are politicians listening to young farmers?

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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Collapsed crypto firm Ziglu faces $2.7M deficit amid special administration

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Collapsed crypto firm Ziglu faces .7M deficit amid special administration

Collapsed crypto firm Ziglu faces .7M deficit amid special administration

Thousands of savers face potential losses after a $2.7 million shortfall was discovered at Ziglu, a British crypto fintech that entered special administration.

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Heidi Alexander says ‘fairness’ will be government’s ‘guiding principle’ when it comes to taxes at next budget

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Heidi Alexander says 'fairness' will be government's 'guiding principle' when it comes to taxes at next budget

Another hint that tax rises are coming in this autumn’s budget has been given by a senior minister.

Speaking to Sunday Morning with Trevor Phillips, Transport Secretary Heidi Alexander was asked if Sir Keir Starmer and the rest of the cabinet had discussed hiking taxes in the wake of the government’s failed welfare reforms, which were shot down by their own MPs.

Trevor Phillips asked specifically if tax rises were discussed among the cabinet last week – including on an away day on Friday.

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Tax increases were not discussed “directly”, Ms Alexander said, but ministers were “cognisant” of the challenges facing them.

Asked what this means, Ms Alexander added: “I think your viewers would be surprised if we didn’t recognise that at the budget, the chancellor will need to look at the OBR forecast that is given to her and will make decisions in line with the fiscal rules that she has set out.

“We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.”

Ms Alexander said she wouldn’t comment directly on taxes and the budget at this point, adding: “So, the chancellor will set her budget. I’m not going to sit in a TV studio today and speculate on what the contents of that budget might be.

“When it comes to taxation, fairness is going to be our guiding principle.”

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Afterwards, shadow home secretary Chris Philp told Phillips: “That sounds to me like a barely disguised reference to tax rises coming in the autumn.”

He then went on to repeat the Conservative attack lines that Labour are “crashing the economy”.

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Chris Philp also criticsed the government’s migration deal with France

Mr Philp then attacked the prime minister as “weak” for being unable to get his welfare reforms through the Commons.

Discussions about potential tax rises have come to the fore after the government had to gut its welfare reforms.

Sir Keir had wanted to change Personal Independence Payments (PIP), but a large Labour rebellion forced him to axe the changes.

With the savings from these proposed changes – around £5bn – already worked into the government’s sums, they will now need to find the money somewhere else.

The general belief is that this will take the form of tax rises, rather than spending cuts, with more money needed for military spending commitments, as well as other areas of priority for the government, such as the NHS.

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‘Shameful’ that black boys in London more likely to die than white boys, says Met Police chief

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Justice system 'frustrating', Met Police chief says - as he admits London's 'shameful' racism challenge

It is “shameful” that black boys growing up in London are “far more likely” to die than white boys, Metropolitan Police chief Sir Mark Rowley has told Sky News.

In a wide-ranging interview with Sunday Morning with Trevor Phillips, the commissioner said that relations with minority communities are “difficult for us”, while also speaking about the state of the justice system and the size of the police force.

Sir Mark, who came out of retirement to become head of the UK’s largest police force in 2022, said: “We can’t pretend otherwise that we’ve got a history between policing and black communities where policing has got a lot wrong.

“And we get a lot more right today, but we do still make mistakes. That’s not in doubt. I’m being as relentless in that as it can be.”

He said the “vast majority” of the force are “good people”.

However, he added: “But that legacy, combined with the tragedy that some of this crime falls most heavily in black communities, that creates a real problem because the legacy creates concern.”

Sir Mark, who also leads the UK’s counter-terrorism policing, said black boys growing up in London “are far more likely to be dead by the time they’re 18” than white boys.

“That’s, I think, shameful for the city,” he admitted.

“The challenge for us is, as we reach in to tackle those issues, that confrontation that comes from that reaching in, whether it’s stop and search on the streets or the sort of operations you seek.

“The danger is that’s landing in an environment with less trust.

“And that makes it even harder. But the people who win out of that [are] all of the criminals.”

Met Police Commissioner Sir Mark Rowley said racism is still an issue in the force
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Met Police Commissioner Sir Mark Rowley

The commissioner added: “I’m so determined to find a way to get past this because if policing in black communities can find a way to confront these issues, together we can give black boys growing up in London equal life chances to white boys, which is not what we’re seeing at the moment.

“And it’s not simply about policing, is it?”

Sir Mark said: “I think black boys are several times more likely to be excluded from school, for example, than white boys.

“And there are multiple issues layered on top of each other that feed into disproportionality.”

‘We’re stretched, but there’s hope and determination’

Sir Mark said the Met is a “stretched service” but people who call 999 can expect an officer to attend.

“If you are in the middle of the crisis and something awful is happening and you dial 999, officers will get there really quickly,” Sir Mark said.

“I don’t pretend we’re not a stretched service.

“We are smaller than I think we ought to be, but I don’t want to give a sort of message of a lack of hope or a lack of determination.”

“I’ve seen the mayor and the home secretary fighting hard for police resourcing,” he added.

“It’s not what I’d want it to be, but it’s better than it might be without their efforts.”

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How police tracked and chased suspected phone thief

‘Close to broken’ justice system ‘frustrating’ and ‘stressed’

Sir Mark said the criminal justice system was “close to broken” and can be “frustrating” for others.

“The thing that is frustrating is that the system – and no system can be perfect – but when the system hasn’t managed to turn that person’s life around and get them on the straight and narrow, and it just becomes a revolving door,” he said.

“When that happens, of course that’s frustrating for officers.

“So the more successful prisons and probation can be in terms of getting people onto a law-abiding life from the path they’re on, the better.

“But that is a real challenge. I mean, we’re talking just after Sir Brian Leveson put his report out about the close-to-broken criminal justice system.

“And it’s absolutely vital that those repairs and reforms that he’s talking about happen really quickly, because the system is now so stressed.”

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Leveson explains plans to fix justice system

Challenge to reform the Met

The Met chief’s comments come two years after an official report found the force is institutionally racist, misogynistic and homophobic.

Baroness Casey was commissioned in 2021 to look into the Met Police after serving police officer Wayne Couzens abducted, raped and murdered Sarah Everard.

She pinned the primary blame for the Met’s culture on its past leadership and found stop and search and the use of force against black people was excessive.

At the time, Sir Mark, who had been commissioner for six months when the report was published, said he would not use the labels of institutionally racist, institutionally misogynistic and institutionally homophobic, which Baroness Casey insisted the Met deserved.

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However, London Mayor Sadiq Khan, who helped hire Sir Mark – and could fire him – made it clear the commissioner agreed with Baroness Casey’s verdict.

A few months after the report, Sir Mark launched a two-year £366m plan to overhaul the Met, including increased emphasis on neighbourhood policing to rebuild public trust and plans to recruit 500 more community support officers and an extra 565 people to work with teams investigating domestic violence, sexual offences and child sexual abuse and exploitation.

Watch the full interview on Sunday Morning with Trevor Phillips from 8.30am on Sunday.

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