Reynolds dodges farm­ inheritance tax storm again

New Defra secretary Emma Reynolds has pledged a “reset” in government relations with the farming community – but avoided any mention of Labour’s controversial farm inheritance tax plan.

Speaking at an NFU-hosted fringe event at Labour’s party conference in Liverpool’s Royal Liver Building today, Ms Reynolds struck a conciliatory tone in her second address to NFU members since taking office.

“Tom [Bradshaw], you were the first stakeholder I met in person on day one of the job… I want to make sure the government renews our relationship with the NFU and the farming community,” she said. “I am here to listen and to ensure the Government understands your concerns.” 

See also: Reynolds backs farm growth but ducks tax row

After Labour won 114 rural seats at the last general election, Ms Reynolds declared: “We are the party of both the coast and the countryside, which we couldn’t say previously.”

But since then, Labour’s rural support has wavered, with Nigel Farage’s Reform UK party making significant gains in the polls.

Reiterating Labour’s broader agricultural promises, Ms Reynolds outlined plans to bring certainty to Environmental Land Management schemes – especially the Sustainable Farming Incentive, which remains closed to new applicants.

SFI update delayed

A Defra update promised for late summer has yet to materialise, and speculation is rife that one will not now be coming until next year.

The minister also spoke of the need for “longer term cycles than four or five years” in farm planning, and promised closer agri-tech co-operation with the US.

However, former City minister Ms Reynolds made no reference to Labour’s plan to impose a 20% tax on inherited agricultural assets over £1m from April 2026 – a policy causing widespread alarm in the farming sector.

NFU president Tom Bradshaw tackled the issue head-on. He said chancellor Rachel Reeves’ announcement of the policy in last October’s Autumn Budget had been “the straw that broke the camel’s back”.

“It needs resetting, and this is the moment that I genuinely believe the government has a massive opportunity to stand up and say, this is what we want from rural Britain,” he said, addressing Ms Reynolds directly.

Mr Bradshaw said Labour’s inheritance tax plan – dubbed the “family farm tax” by the NFU and others – has “sapped the confidence [of farmers] like no other that I have seen in my time and role in farming”.

CenTax alternative

He urged Ms Reynolds and the Labour government to consider an alternative model proposed by tax think tank CenTax.

CenTax recommends a “minimum share rule”, requiring that at least 60% of the deceased’s estate be made up of qualifying farmland or business assets to claim full agricultural or business property relief.

Under this proposal, farms would retain full relief up to £5m per person, with tapering above that threshold.

Mr Bradshaw said although the model is “far from perfect”, it is “much better than where we are today, and it will hopefully help mitigate the impacts on those that are caught in the eye of the storm, that have no ability to plan and will be able to start investing with more confidence for the future”.

“I hope that we’re able to work together to look at that proposal,” he added.