Terry Jermy breaks Labour Party ranks to question Government’s inheritance tax plans for farmers

Terry Jermy has broken party ranks to cast doubt on the Government’s assurances to farmers.

The Labour MP for South West Norfolk has questioned the “accuracy” of figures being used to justify changes to agricultural relief for inheritance tax announced in Chancellor Rachel Reeves’ Budget.

The new rules mean people inheriting assets worth more than £1million can expect to pay significantly more, which industry experts warn could push future generations to quit the farming business.

Mr Jermy said he wanted “reassurance” that Ms Reeves has done her sums right after the Government claimed around three-quarters of farmers will pay nothing in inheritance tax as a result of the controversial changes.

WHAT ARE THE CHANGES?

The Chancellor revealed in her recent Budget that she will reform agricultural property relief (APR) from April 2026.

Farming assets worth less than £1million will not be affected, but those over that amount will now face a 20% inheritance tax bill.

Speaking in the House of Commons, Ms Reeves said: “This will ensure that we continue to protect small family farms, with three-quarters of claims unaffected by these changes.”

Farmers say the actual figure will be much higher and believe the changes could put hard-working family businesses “under threat”.

The ramifications could also push food prices up and destabilise the UK’s supply chain, according to the National Farmer’s Union.

Prime Minister Keir Starmer has defended the decision and insists the “vast majority of farms and farmers” will not be affected by changes to APR in the budget.

ARE THE FIGURES ACCURATE?

Mr Jermy has cast doubt on his party’s assertion that only three-quarters of inheritance claims will be impacted.

He said: “I support reform of APR but want reassurance on the scale of the impact and confirmation that the figures are accurate.

“However, it is clear that many more people fear they will be impacted than actually is the case and I want the Government to provide greater clarity on the proposals to reassure farmers, who have already endured so many challenges and uncertainty over many years.

“We need to address the tax loop hole that is being abused by certain celebrities and billionaires, such as Jeremy Clarkson, but cannot risk family farms being caught up in the changes.”

This comes as new analysis by The Telegraph newspaper shows Mr Jermy as being among seven Labour MPs at risk of losing their seats owing to farmer-led backlash in rural constituencies.

ROW RAGES ON

Large demonstrations by farmers are taking place in London today to urge backbench MPs such as Mr Jermy to stand up against the Government’s plans.

Celebrities including TV presenter and farmer Jeremy Clarkson are expected to join the rally.

Many of Mr Jermy’s Labour colleagues have staunchly defended the policy changes, including Ben Goldsborough, MP for South Norfolk, who recently came under fire after claiming “proper farming families” would not be hit.

Kit Papworth, director of contract farming business LF Papworth Ltd, said: “Labour have misunderstood what the average small family farm looks like and any increase to tax is going to make these businesses completely unviable.

“The figures being quoted by the Government include those who own farming land – not just active farmers – and most people acknowledge they haven’t got their definition correct.”