Farming leaders and suppliers are warning that Chancellor Rachel Reeves’ inheritance tax on farming assets exceeding £1m could undermine Britain’s food security, making the UK more dependent on foreign imports.
Business leaders, including Nigel Murray, managing director of Booth Supermarkets, have expressed concerns that the tax changes could erode incentives for local food production, potentially leading to higher supermarket prices and lower self-sufficiency.
Murray, whose store imports 60% of its products from British farmers, stressed that although the impact may not be immediate, “over time there is a real danger that local food production may be eroded.” He noted that increasing reliance on imports would bring challenges related to environmental impact, animal welfare standards and costs.
National Farmers Union President Tom Bradshaw criticized the tax changes, warning that they could force family farms to sell their assets, threatening the ability of the next generation to maintain farming operations. Bradshaw expressed concern about long-term food security, adding that “every penny the Chancellor saves comes directly from the next generation having to dismantle their family farm.”
ABF, the parent company of British Sugar, echoed these sentiments, with chief executive George Weston describing the tax as a blow to the farming community. He urged policymakers to give greater importance to food security and agricultural production in the UK. The National Farmers Union is pressing for discussions with Sir Keir Starmer and Rachel Reeves, and Labor members are also encouraging dialogue to address farmers’ concerns.
Recent data highlights the vulnerability of UK grain production to extreme weather, underscoring the importance of agricultural resilience. Previously, farmland enjoyed inheritance tax exemptions to promote generational continuity in agriculture. However, the new Reeves rules, effective from April 2026, will impose a 20% tax on farm assets in excess of £1m, affecting asset-rich but cash-poor farms who may struggle to meet the tax liability without selling parts. Of its real estate.
The Treasury stresses that the policy will only affect a minority of farms, but the National Farmers’ Union estimates that the tax could affect up to 75% of British food production. The government says the new tax structure balances support for family farms with funding vital public services.
In addition, Labor’s budget quietly closed a vehicle tax loophole for pickup trucks, affecting agricultural workers who rely on vehicles like the Ford Ranger for their operations. With tax bills on these vehicles expected to rise sharply, farmers like John Watt in Suffolk report adjusting their investment plans amid growing uncertainty over agricultural policy.
The policy changes have sparked a national debate over food security, with some industry leaders claiming the tax threatens to close an estimated 140,000 family businesses in Britain. UK Family Business Chairman Sir James Witts has criticized the tax as “economic illiteracy”, warning it could lead to business closures and job losses, while the Treasury says only a small number of businesses will be affected.