Image: Paul Tompkins raises a herd of 400 dairy cows
Chancellor Rachel Reeves announced that, although there will continue to be no inheritance tax on combined business and agricultural assets worth less than £1m, for anything valued above that there would be a 50% relief, at an effective rate of 20%, from April 2026.
The National Farmers Union says the decision could result in farmers having to either borrow money or sell off parcels of land to pay the tax.
Paul Tompkins raises a herd of 400 dairy cows on a 300 acre (4.7 square mile) farm near York.
He, and thousands like him, fear that the new £1m limit on inheritance tax relief on farmland will rob his children of their farming legacy.
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“I thought this budget was going to help working people, and I see myself and other small farmers to be among those working people,” he says.
“I shouldn’t have to be worried that I’m going to be fleeced by the government and have to face the fact my kids might not be able to keep this farm, which has been handed down through four generations, going in the future.”
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1:22
‘Raising taxes was not an easy decision’
Shadow secretary of state for rural affairs Steve Barclay posted on X that Labour had “broken a clear promise they made to our farmers”.
The government says only a small number of the largest estates will be affected, and some financial experts agree.
Paul Johnson, Director of the Institute for Fiscal Studies (IFS), says: “What the budget did was reduce the amount of additional relief that farmers get on agricultural land.
“It still means they’ll be significantly more generously treated than the rest of us and still more generously treated actually, than farms used to be in decades past.
“The changes will affect actually a remarkably small number of some of the most valuable farms. The majority will still not be affected by this.”
But the Country Land and Business Association believes up to 70,000 farms could be affected. There are about 209,000 farm holdings in the UK, according to the government.
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The government has confirmed it would be maintaining the £2.4bn farming budget for England in 2025/26, and says its commitment to farmers remains “steadfast”.
But farmers like Paul Tompkins still feel betrayed by the chancellor and maintain that the only fair thing for her to do is to completely reverse her decision.
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Labour will eliminate unauthorised sewage spillages in 10 years, the environment secretary has told Sky News.
Steve Reed also pledged to halve sewage pollution from water companies by 2030 as he announced £104 billion of private investment to help the government do that.
“Over a decade of national renewal, we’ll be able to eliminate unauthorised sewage spillages,” he said.
“But you have to have staging posts along the way, cutting it in half in five years is a dramatic improvement to the problem getting worse and worse and worse every single year.”
He said the water sector is “absolutely broken” and promised to rebuild it and reform it from “top to bottom”.
His earlier pledge to halve sewage pollution from water companies by 2030 is linked to 2024 levels.
The government said it is the first time ministers have set a clear target to reduce sewage pollution and is part of its efforts to respond to record sewage spills and rising water bills.
Ministers are also aiming to cut phosphorus – which causes harmful algae blooms – in half by 2028.
Image: Environment Secretary Steve Reed. File pic: PA
Mr Reed said families had watched rivers, coastlines and lakes “suffer from record levels of pollution”.
“My pledge to you: the government will halve sewage pollution from water companies by the end of the decade,” he added.
Addressing suggestions wealthier families would be charged more for their water, Mr Reed said there are already “social tariffs” and he does not think more needs to be done, as he pointed out there is help for those struggling to pay water bills.
The announcement comes ahead of the publication of the Independent Water Commission’s landmark review into the sector on Monday morning.
The commission was established by the UK and Welsh governments as part of their joint response to failures in the industry, but ministers have already said they’ll stop short of nationalising water companies.
Mr Reed said he is eagerly awaiting the report’s publication and said he would wait to see what author Sir John Cunliffe says about Ofwat, the water regulator, following suggestions the government is considering scrapping it.
On Friday, the Environment Agency published data which showed serious pollution incidents caused by water firms increased by 60% in England last year, compared with 2023.
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1:38
Why sewage outflows are discharging into rivers
Meanwhile, the watchdog has received a record £189m to support hundreds of enforcement officers for inspections and prosecutions.
“One of the largest infrastructure projects in England’s history will clean up our rivers, lakes and seas for good,” Mr Reed said.
But the Conservatives have accused the Labour government of having so far “simply copied previous Conservative government policy”.
“Labour’s water plans must also include credible proposals to improve the water system’s resilience to droughts, without placing an additional burden on bill payers and taxpayers,” shadow environment secretary Victoria Atkins added.
The Rivers Trust says sewage and wastewater discharges have taken place over the weekend, amid thunderstorms in parts of the UK.
Discharges take place to prevent the system from becoming overwhelmed, with storm overflows used to release extra wastewater and rainwater into rivers and seas.
Water company Southern Water said storm releases are part of the way sewage and drainage systems across the world protect homes, schools and hospitals from flooding.