Farmers have protested across the country since Rachel Reeves’s tax raid in October (Image: Getty)
The government’s spending watchdog has cast doubt on how much revenue will be raised from hitting farmers with bills.
The Office for Budget Responsibility (OBR) dealt the latest blow to Rachel Reeves as supermarkets Lidl, Co-op and Tesco publicly called for a rethink on its tax raid.
Shadow Environment Secretary Victoria Atkins said: “City Steve [Reed] and the Chancellor need to wake up and face reality. They have their numbers wrong and they are seeking to destroy farming and rural communities in pursuit of such little return.
“Farmers, farming businesses and the wider food sector are coming together in an incredible display of solidarity. I commend the supermarkets who have been so vocal in their support of our farmers.
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“It is time for the Government to listen. They must axe the Family Farm Tax and secure our nation’s food supply for the future.”
The Daily Express has championed calls for Ms Reeves to U-turn on her decision from October’s Budget though the
The Chancellor placed a 20% inheritance tax on farmers’ assets worth more than £1 million in her October Budget from April next year.
The OBR’s damning report said its “central estimate” is that the policy will raise £500million by 2029/30.
But it assigned the amount a “high uncertainty rating” because they cannot properly predict how farmers will reorganise their affairs.
It said any rise in gift-giving will “increase attrition and reduce receipts after at least a seven-year period,” effectively reducing the number of farmers who pay tax at all
It also makes clear that older farmers will find it near impossible to restructure their affairs quickly enough to not be pummelled by the tax.
Tim Farron MP, Liberal Democrat Environment and Rural Affairs spokesman, said: “This report confirms that the Government’s misguided family farm tax is mired in problems and will penalise British farmers for practically no benefit.
“It is deeply concerning that older farmers will be hit hardest from this tax, with the rug pulled from under them before they can change their plans. And with tax revenue expected to be highly uncertain and unstable for two decades, the Chancellor’s excuses simply don’t stack up.”
Mo Metcalf-Fisher, director of external affairs at the Countryside Alliance, said: “Tesco, Lidl and Co-op, like many other businesses, understand that they benefit from a buoyant family farming sector, something the Treasury’s tax hike threatens to completely undermine. It is becoming almost impossible to find anyone that supports this policy, yet Rachel Reeves refuses to consult relevant rural stakeholders to find a way forward out of the unnecessary fall out created by her department. If the government wants to avoid a long-running battle with countryside, they need to rethink this policy urgently.”