Labour's rural MPs concerned about Burnham's urban bias

Andy Burnham has been urged to stop rural voters “drifting away” from Labour by a group of MPs cautioning against too much urban bias.  The ’King of the North’ was told by those representing countryside seats won by the party for the first time in 2024 not to treat their areas as peripheral.

A policy blueprint by the Labour Rural Research Group (LRRG), which has 40 MPs — about 10 per cent of the parliamentary party — said any devolution drive should not only benefit major urban centres.  The comments came in a report, due to be published on Tuesday, that criticised successive governments for treating rural areas as “economically marginal”.

James Naish, vice-chair of the LRRG, wrote: “The purpose of devolution shouldn’t simply be to shift power from Whitehall to major urban centres.  It should go much further and ensure that communities with different geographies, economies and needs are properly understood within national policy. Rural Britain cannot be treated as an afterthought, nor can urban policy simply be retrofitted to rural communities.”

He added that these communities “shouldn’t be seen as peripheral to national renewal” and that the next phase of Labour in government should not see them as areas requiring financial support.

Figures cited by the LRRG showed just 27 per cent of voters surveyed for its report were confident the government would strengthen its rural policy, while 40 per cent were not confident.

Although concern was voiced over the scale of the challenge Labour will face in rural seats at the next election, the LRRG said there was still a chance for Burnham to change the party’s fortunes.   Among the policies he was encouraged to consider were a business rates taper for rural and farm-based firms, as well as making it easier for farmers to diversify their property to boost income.

Burnham was urged to make rural Britain a separate part of the government’s tourism strategy and give communities more perks for hosting renewable energy infrastructure.

Government gives way on farm inheritance tax

In a Christmas Eve u-turn the Labour Government has backed down on inheritance tax for farmers.  My estate will still attract 40 per cent, but only a minority of farmers will pay 20 per cent over a ten year period.

No doubt farmers will say it was their parades of shiny kit in London that made the difference, but I think a revolt by backbench Labour MPs from rural seats was more significant.  As many as forty of them were prepared to move an amendment to the Finance Act in what would have been a major revolt..

Moreover, it seemed unlikely that the measure would yield significant sums.

Fewer farmers will start paying inheritance tax from April after UK ministers were forced into a £130mn climbdown by a fierce backlash against the policy from rural communities and some Labour MPs. In a surprise U-turn just before Christmas — and with parliament not sitting — the government announced it was lifting the threshold above which farmers will have to pay death duties.

Chancellor Rachel Reeves announced in last year’s Budget that farmland would no longer be exempt from inheritance tax and would be liable for a 20 per cent levy on assets worth more than £1mn from April 2026. But on Tuesday ministers bowed to pressure and announced the threshold would be raised to £2.5mn, meaning that spouses or civil partners with combined estates worth up to £5mn will pay no inheritance tax on top of existing allowances.

Officials said the changes would reduce the number of family estates facing inheritance tax bills to about 1,100, from 2,000 under the original plans (these official  figures have always been disputed by farm organisations).

Only 15 per cent of farms will be liable for the levy, down from 25 per cent under the previous proposals. Introducing inheritance tax on agricultural land had been expected to raise £430mn a year for the government by 2029-30, but that figure is now likely to be £300mn — meaning a net annual cost of £130mn.

Environment secretary Emma Reynolds said the government had “listened closely to farmers across the country” and was making changes “to protect” more ordinary family farms. “It’s only right that larger estates contribute more, while we back the farms and trading businesses that are the backbone of Britain’s rural communities,” she added.

Farming groups have organised regular, noisy protests in Whitehall over the past year, with ministers criticised by opposition parties and some rural Labour MPs. Markus Campbell-Savours, MP for Penrith and Solway in Cumbria, recently voted against the original proposals and was suspended from the Labour party as a result.

A significant number of backbench Labour MPs abstained. David Smith, Labour MP for North Northumberland, said on Tuesday that the government’s decision was “sensible and mature”. Prime Minister Sir Keir Starmer last week met Tom Bradshaw, president of the National Farmers’ Union, who urged him to protect “the vulnerable and elderly” from the tax changes.

Bradshaw said on Tuesday that “while there is still tax to pay, this will greatly reduce that tax burden for many family farms, those working people of the countryside.  Starmer was also spurred into action by last week’s government-commissioned review of farming by former NFU president Minette Batters which found nearly a third of farms in Great Britain were loss making last year.

Batters said the inheritance tax changes had left farmers “bewildered and frightened of what might lie ahead”. One Labour MP questioned the timing of the announcement during the Christmas “dead zone”, saying: “My general view is if you are going to U-turn, reap the political benefits of it and properly argue for it.”

Asked why the change was not in last month’s Budget, a government official said ministers had wanted to “get it right” after a long time engaging with the farming industry.

I do hope that despite this policy change farmers will take succession planning more seriously and allow younger family members more say in the running of farms.

It also seems to me that the Government has spent a lot of political capital and been distracted from other issues while gaining very little in fiscal terms: this also applies to the winter fuel allowance.

Of course the animal welfare strategy just announced by the Government has also raised concerns in rural areas, in part because of production restrictions on pigs and poultry that di not apply to imported food and in part because of the proposed ban on trail hunting.

Quarter of farmers say they will not vote

Almost one in four farmers say they will not vote at the next general election according to a Farmers Weekly survey. (N stated as 600+).

42 per cent would vote Conservative, down from 39 per cent last year with 10 per cent voting Liberal Democrat and 7 per cent Labour.  'Others' account for 20 per cent.   This is a disappointing figure for the Liberal Democrats given their hopes of making progress in rural seats.

Support for the Conservatives was strongest in south-east England (49 per cent) and Yorkshire (47 per cent).  Support was stronger among larger farmers with 51 per cent of those farming more than 500 hectares saying they would vote Conservative.

21 per cent in Scotland and 29 per cent in Wales would vote Conservative.   In Scotland Labour was the most popular party with the Scottish Nationalists in third place with nine per cent.

The NFU have just demanded that the farm budget be expanded from £2.4bn to £4bn, something that either leading party is unlikely to be able to afford given the fiscal outlook.