Farm leaders and suppliers are warning that Chancellor Rachel Reeves’ inheritance tax on farming assets worth more than £1 million could undermine Britain’s food security, making Britain more dependent on foreign imports.
Senior business leaders, including Nigel Murray, director of Booths supermarket, have raised concerns that the tax changes could erode incentives for domestic food production, potentially leading to higher supermarket prices and reduced self-sufficiency.
Murray, whose supermarket sources 60% of its produce from British farmers, stressed that while the impact may not be immediate, “over time there is a real risk that domestic food production could be eroded.” He noted that greater dependence on imports would bring challenges in terms of environmental impact, animal welfare standards and costs.
National Farmers Union (NFU) chairman Tom Bradshaw criticized the tax changes, warning they could force family farms to sell assets, threatening the next generation’s ability 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 break up their family farm.”
ABF, the parent company of British Sugar, echoed these sentiments, with CEO George Weston calling the tax a blow to the farming community. He urged policymakers to give greater importance to food security and British agricultural production. The NFU is calling for discussions with Sir Keir Starmer and Rachel Reeves, with Labor Party members 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, agricultural land enjoyed inheritance tax exemptions to promote generational continuity in agriculture. However, Reeves’ new rules, which come into effect in April 2026, will impose a 20% tax on farming assets over £1m, which will impact asset-rich but cash-poor farms that could struggle to meet tax obligations without selling parts of their estates.
The Treasury claims the policy will only affect a minority of farms, but the NFU estimates the tax could affect as much as 75% of UK food production. The government says the new tax structure balances support for family farms with funding for crucial public services.
In addition, Labor’s budget quietly closed a vehicle tax loophole for pickups, impacting farmworkers who rely on vehicles like the Ford Ranger to operate. With tax bills on these vehicles expected to rise sharply, farmers like Jon Watt in Suffolk report they have adjusted 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 risks forcing the closure of Britain’s estimated 140,000 family-owned businesses. Sir James Wates, chairman of Family Business UK, criticized the tax as ‘economic illiteracy’ and warned it could lead to business closures and job losses, while the Treasury claims only a small number of businesses will be affected.