PM has secret talk with union amid backlash to Labour farmers tax raid

Keir Starmer has held secret talks with farming leaders about the impact of the government’s ‘family farms tax’ - triggering speculation he is clearing the way for a climb down.

Downing Street yesterday confirmed that the Prime Minister held private talks with NFU president Tom Bradshaw on Monday.

No 10 said the government remained determined to press ahead with the controversial Budget move to slash inheritance tax relief for farms, which has triggered fury in rural communities.

But Mr Bradshaw said he had emerged hopeful of action to soften the impact, saying the PM had been ‘very much in listening mode’.

He said he had explained to Sir Keir the ‘very real human impact, the viability of family farms and the low returns from producing the country’s food’.

He added: ‘The PM engaged with us and I really hope this marks a moment where we can move forward and reach an outcome that works for everyone.’

No 10 had previously indicated that Sir Keir had no plans to meet with farming leaders, saying that Environment Secretary Steve Reed was handling the issue.

But Downing Street last night confirmed that he had held an undisclosed meeting with Mr Bradshaw following last week’s protest by thousands of farmers in London.

A spokesman described the talks as ‘constructive’, adding: ‘They had a wide-ranging conversation in which the Prime Minister recognised the strength of feeling about the changes to agricultural property relief set out in the Budget and listened to the NFU’s concerns.’

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The two men also discussed food security, trade, and other issues affecting farmers.

No 10 insisted that the government will not back down on the inheritance tax change, which the Treasury hopes will generate £500 million.

‘We are not considering mitigation for the policy,’ the spokesman said. ‘We are fully committed to implementing it as set out.’

However, ministers are under mounting pressure to soften the policy, or scrap it altogether.

The government claims that the ‘vast majority’ of farms will not be affected by the introduction of inheritance tax on agricultural land worth more than £1 million. From 2026, farming families will pay inheritance tax at 20 per cent above this threshold.

But critics have warned that the government’s estimates include many small hobby farms.

A new analysis by the National Farmers’ Union found that three-quarters of commercial family farms are likely to be hit with huge tax bills which could force them to sell off land. It added: ‘Put simply, the majority of farms don’t earn enough money to pay the potential Inheritance Tax Bill without selling off some of their land or business, which in turn makes the farm business unviable.’

The Institute for Fiscal Studies highlighted this week that the sudden change meant some farmers would be unable to use normal tax planning to avoid the charge, as assets can only be passed on free of inheritance tax if the gift occurs at least seven years before death. The think tank suggested ministers should consider allowing farmers a one-off exemption to pass on assets.

The Treasury has denied persistent reports that it is working on options to defuse the row.