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Keir Starmer Refuses to Drop Inheritance Tax: UK Prime Minister has acknowledged reports that some farmers are considering taking their own lives amid fears over the government’s proposed inheritance tax changes. Despite the growing backlash from the farming community and mounting political pressure, Starmer confirmed that his government will press ahead with the inheritance tax reforms.
Speaking amid criticism from opposition parties and farming unions, Starmer said he was aware of the distress caused by the policy but defended the measures as necessary, signalling no immediate change in course. Farmers argue that the proposed tax changes could force family-owned farms to be sold, threatening livelihoods built over generations.
The comments have sparked intense debate across the UK, with critics accusing the government of ignoring the mental health impact on rural communities, while supporters argue the reforms are part of a broader push for tax fairness.
The controversy highlights the growing tension between the Labour government and Britain’s agricultural sector, as protests and warnings from farmers continue to escalate nationwide.
00:03Prime Minister, you've repeatedly said that the economic mission of this Government is to be on the side of working people.
00:09Is that still your position?
00:10Yes.
00:11Yes.
00:11And do you consider farmers, many of whom are getting up at 4am working 365 days a year feeding the nation, to be working people, yes or no?
00:19Yes, I do.
00:20Because last year, rural communities, including many farmers, put their trust in Labour for the very first time in a very long time and gave us a mandate for change in this country.
00:32However, and I hear this from many of the 950 farm holdings in my constituency, feel like they were misled around the changes to IHT and APR,
00:42which are going to pull the rug from underneath farming communities and obliterate the family farm for many farmers.
00:48We're in a situation now where elderly farmers or farmers with terminal diagnosis are in a position whereby if they die before April,
00:57their farm will pass to the next generation with no tax implications.
01:01But if they die after, the potential of their family farm being completely unviable.
01:06Can you see how farmers can feel like this Government hasn't necessarily treated them the way that they expect to be treated as working people?
01:13Well, look, I do understand the concern, and I met with the President of the NFU just last week, as I've met with him before,
01:21to run through the particular concerns they have.
01:24I do think on agricultural property relief, there had to be sensible reform, and I think this is sensible reform.
01:31We did make an amendment in the budget, obviously, in relation to the spousal transfer.
01:35And more generally, we are sustaining £11.8 billion in sustainable farming this Parliament.
01:44So there's a lot of money set aside in the budget.
01:46There's a roadmap that we're agreeing with farmers as to the way forward.
01:50And, of course, Minette Batters, the ex-president of the NFU, has just completed a report for us on profitability
01:56and how we drive up profitability year on year, which I think is vitally important,
02:01because, in a sense, that's the missing factor here, which is the amount of money that farmers can make year on year.
02:07And we need to drive that amount up.
02:09And the issue with the aluminum that was in the budget is I think it's been overshadowed,
02:14in the same way the Countryside Stewardship Fund has been overshadowed by the IHT issue.
02:18And I think that the political damage is that whilst the ambitions of government were, I think, quite right
02:24in terms of tackling tax avoidance that could go on in, let's say, large country estates,
02:29the collateral damage is that it's actually the small family farm which is feeling the hit of this.
02:34And the changes in the budget won't go any way to benefit one of my constituents who is 89 next month.
02:40He's already widowed, so he will not be able to benefit from the spousal transfer that has been announced.
02:45And given that you've been a Prime Minister who has, and I think quite admirably,
02:49changed courses in the past when issues have, you know, been exposed to the absolute reality of things,
02:56would you consider changing course on this issue?
03:00Well, I mean, firstly, let me just reassure.
03:02I mean, the vast majority of three quarters, I think, of farmers have been not affected at all.
03:07And of those that are affected, the rate that's paid is half the rate that's over a 10-year period.
03:15In relation to the particular example, if you're happy to give me further details, I'll certainly have my team look at that.
03:21I'd like to thank the Prime Minister for the details.
03:23One final question, Chair, if I may, and this won't have sunk in, I don't think,
03:27is that is the Prime Minister aware that some farmers who have terminal diagnosis now
03:31are actively planning to expedite their own deaths so they hit before April?
03:35Is he aware of that?
03:37I've had discussions with a number of individuals who've drawn all manner of things to my attention.
03:44Thank you very much.
03:45Alistair Carmichael, MP.
03:45And you understand, Prime Minister, that the basis for that actually sits in the finance bill itself.
03:53It's the provision called the Anti-Forestalling Clause.
03:56You're familiar with the Anti-Forestalling Clause, I think?
03:58Yeah.
03:59That means that anyone who transfers their property or their farm to a descendant
04:05but dies within seven years will be liable to pay inheritance tax under the new system.
04:10And if they don't live seven years after that, it could even trigger capital gains tax.
04:15If you do nothing, though, and you die before April next year, then the estate passes tax-free.
04:22Do we agree, Prime Minister, that nobody should be left feeling, as Kat Smith has just described,
04:30that they would be better off dying between now and next April?
04:36No, of course.
04:38But governments have to bring about sensible reform and take measures which...
04:42Sensible reform, absolutely.
04:43But things like Anti-Forestalling Clause, they are not unique to this situation.
04:50But on a human level, the answer to your question is, of course, not.
04:54Last year, you told me that this was a policy that was just aimed at revenue raising,
05:01that it wasn't targeted at anybody in particular.
05:05We've now seen the Anti-Forestalling Clause, and we know from Treasury's own figures
05:11that 75% of the half billion pounds that is expected to be raised from this
05:18will come from farmers who die over the age of 75.
05:25So, is it not the case that actually this is a targeted measure,
05:30and it is targeted at, and it will affect those who are elderly,
05:36suffering from terminal illnesses over 75,
05:40and it doesn't matter if it's one farmer or a thousand farmers.
05:44Surely, you cannot be comfortable with that.
05:47Let me just address the point that it's not targeted.
05:49It's not targeted at individuals.
05:51Well, it was what you said last year.
05:54It's not targeted, as I said last year.
05:56It's an economic reform which we took in the Budget before last.
06:00It's not targeted.
06:01It is to adjust the rate at which inheritance tax is,
06:06the fact that it's paid, the rate at which it's paid,
06:09and the period over which it is paid.
06:12But it's not targeted against individuals.
06:15I'm not arguing with you that there are therefore going to be individuals affected,
06:21as there are with any change in any tax regime.
06:23But there's a difference between changing the tax regime
06:26and targeting a group of individuals.
06:28This is about changing the tax regime.
06:31The anti-forstalling clause that we've spoken about traps farmers into the new rules.
06:38It doesn't allow them the same opportunities that other taxpayers will have
06:43to use tax planning to manage their affairs in a sensible way
06:47that will allow the succession of family farms in this country.
06:51That doesn't make it targeted.
06:53It is a necessary consequence of the decisions that we've taken.
06:58But I can assure you, as you would expect,
07:01the President of the NFU has raised this issue with me on more than one occasion.
07:06Not just the President of the NFU.
07:08Well, I appreciate that.
07:09You've heard it from Kat Smith, you've heard it from my select committee,
07:12you've heard it from the Welsh Affairs Select Committee,
07:14you've heard it from the Northern Ireland Affairs Committee.
07:18These are all select committees, incidentally,
07:20that have majorities from the Labour Party,
07:24and they have all produced unanimous reports
07:27calling for this to be paused and rethought.
07:29You don't have to listen to me.
07:31You don't even have to listen to the farmers out there.
07:34You don't have to listen to the President of the NFU.
07:36But why do you not listen to your own party colleagues?
07:39I do listen to party colleagues all the time.
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