CBI boss warns Rachel Reeves’ farm tax will undermine growth push
Rain Newton-Smith, head of Britain’s largest business group, attacked Rachel Reeves’ tax raid on farmers, arguing that it risks endangering food security and hampering economic growth.
Speaking at the National Farmers’ Union’s (NFU) conference, Newton-Smith said there was no sector more “foundational” to the UK economy than farming.
“Farming is a vital part of the everyday economy – the true job creators and community builders that prop up our whole economy. You can’t get growth unless you start by backing sectors like this,” she said.
“Any growth plan will tumble. Any industrial strategy will fall flat at the first hurdle… if we don’t first back our foundational sectors,” she added.
But Newton-Smith noted that confidence had nosedived in the agriculture sector due to the tax changes announced in last October’s Budget.
Prior to the Budget, farmers were able to claim 100 per cent relief from inheritance tax on agricultural land, but, from April 2026, they will have to pay the tax on the value of land above £1m at an effective rate of 20 per cent.
Chancellor Rachel Reeves said the measures would “ensure that we continue to protect small family farms”, while also clamping down on tax avoidance.
But NFU estimates suggest that around three quarters of farms will be impacted by the tax.
Many farmers will have to sell their farms to pay the tax bill, according to the NFU, potentially endangering food security in the future.
Newton-Smith warned that it was vital for the government to strengthen domestic farming as part of the wider push to generate economic growth.
“Growth and resilience are two sides of the same coin. You can’t have one without the other,” she said.
“But as the government targets resilience – how can you do that without at least some self-reliance?… 58 per cent of food consumed in the UK is from UK farmers…To ensure a resilient economy, we need a strong farming community.”