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Rachel Reeves warned not to target farmers for a second time as she searches for spending cuts

Labour told not to take money from flood defences and farm schemes in wake of inheritance tax raid in the Budget

Kate Devlin
Whitehall Editor
Wednesday 15 January 2025 17:53 GMT
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Angry farmers disrupt Minister's speech with loud tractor tax protest in Oxford

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Rachel Reeves has been warned that farmers should not be “punished” further as she searches for spending cuts following her inheritance tax raid in the Budget.

The chancellor did not rule out emergency cuts on Tuesday as she responded to days of market turmoil and the growing cost of government borrowing. On Monday Keir Starmer also said the Treasury would be ‘ruthless’ in cutting spending.

The Chancellor has already prompted fury in the countryside with the ‘farming tax’ hike, which critics warn could sound the death knell for family firms in England.

Chancellor Rachel Reeves is under fire for her handling of the economy (Ben Birchall/PA)
Chancellor Rachel Reeves is under fire for her handling of the economy (Ben Birchall/PA) (PA Wire)

Now fears have been raised that they could be hit by a double whammy if Ms Reeves makes cuts to the Environment Land Management (Elm) scheme.

Late last year the Treasury flagged that “the government is facing significant funding pressures on flood defences and farm schemes of almost £600 million in 2024-25”.

It added that “while the government is meeting those commitments this year, it is necessary to review these plans from 2025-26 to ensure they are affordable”.

Jerome Mayhew, the Tory MP for Broadland and Fakenham in Norfolk, who will lead a debate in Parliament on farmland flooding on Wednesday told MailOnline: “There is a real risk that farmers will bear the brunt of future cuts to fix Labour’s mess.

Conservative MP Jerome Mayhew has warned farmers face further cuts
Conservative MP Jerome Mayhew has warned farmers face further cuts (Liam McBurney/PA Wire)

“Not content with cutting agricultural property relief, the government seems primed to cut the nature-friendly farming budget after 2026.

“Cutting this budget would be a fool’s errand for a government supposedly wanting to protect communities from flooding, fight climate change, protect nature, and support British farmers.

‘The government should be figuring out how to raise the nature-friendly farming budget in line with inflation, not punishing farmers further.”

A Defra spokeswoman told the publication: “Our commitment to farmers is steadfast.

“That is why this government is investing £5 billion into farming over the next two years – the largest ever directed at sustainable food production and in our country’s history. We are going further with reforms to boost profits for farmers by backing British produce and reforming planning rules on farms to support food production.

‘As we set out in our Plan for Change, we are focused on supporting our farmers, supporting rural economic growth and boosting Britain’s food security.”

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