Senior Welsh Labour figures have sought to reassure farmers angered by changes to inheritance tax, who picketed outside the party’s Welsh conference.
Dozens of protesters gathered outside the Venue Cymru in Llandudno for the first day of Welsh Labour Conference, where Prime Minister Keir Starmer addressed delegates for the first time since entering Downing Street.
From April 2026, landowners will pay inheritance tax on combined agricultural and business property worth more than £1 million at a rate of 20%, compared to the standard 40%.
However, farming unions have warned that scrapping the full relief from inheritance tax could have significant and disastrous consequences on family-run farms, particularly in Wales.
‘Very few will be affected’
Speaking to LabourList, First Minister Eluned Morgan said she represents a rural area and understands the concerns of farmers.
However, she said: “I think it’s important we get clarity on how many are potentially going to be affected by this. There is a lack of agreement at the moment between what the farmers think and what the Treasury says, so we need to bottom that out so that there is an understanding of how many are likely to be affected.
“Our initial calculations are that there will be very few of them that will be affected.”
READ MORE: ‘A new Wales on the horizon’: Eluned Morgan’s speech to Welsh Labour conference
‘Decisions Chancellor has made do not happen in a vacuum’
Deputy First Minister Huw Irranca-Davies told LabourList that he applauds the work that farmers’ unions are doing in their own analysis of the proposed tax hike and trying to outline an alternative route forward.
Speaking on a panel alongside representatives of NFU Cymru and the FUW, he said: “I do think every individual farm business needs to look at what is the individual impact of this within their area.
“We do have some significant challenges in this space. It’s not just the inheritance tax increase, it’s succession planning as well.
“My message to those outside is first of all, to work with us in the work we are doing in Wales, along with the unions, to make those representations to the Treasury, but also be cognisant of the fact that the decisions that Rachel Reeves has made do not happen in a vacuum.
“Having been a minister in both administrations, I can’t imagine the shock and horror of a Chancellor walking in to find not only did she inherit where the economy was, but there were things promised and committed to that had no lines of funding allocated to them. I don’t think Rachel Reeves is making any decisions lightly.
“I think what Rachel Reeves is saying is we need to find a way in which farmers who also rely on the same public services that we have, that had been promised that investment, now also now need to be part of that wider societal thing to say we are genuinely all in this together.”
Irranca-Davies also said that, if unions can put forward an alternative analysis, they should do so but “do it in a way that actually brings down the heat in this and actually says let’s look at the data”.
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‘Conversation needs to be based in fact rather than perception’
Welsh Secretary Jo Stevens echoed the First Minister’s comments and said the conversation on inheritance tax reform needs to be based in “fact and reality rather than perception”.
In an interview with LabourList, she said: “I think the numbers need explaining – if you are a farming couple and you want to leave your farm to your children so that it passes through the generations, you can do that. You can leave your farm and using all the tax allowances that are available to you, you can leave an estate of up to £3 million to your children without paying a single penny of inheritance tax.
“If you are fortunate enough to have assets that go beyond that, you then only pay at half the normal rate of inheritance tax and you have a period of ten years in which to pay your tax liability.”
READ MORE: Jack Sargeant MS: ‘Welsh Labour is ambitious for bread – and roses too’
She also stressed that, according to Treasury figures, only around 500 farms a year would be impacted by the Budget announcement and also underlined the need to secure funding to improve public services.
“Farmers use the NHS, farmers send their children to state schools – we all want good public services and we were very clear in our manifesto that we would ask those who had the broadest ability to pay,” she said.
Prime Minister defends tough decisions in speech
While the Prime Minister did not directly address the concerns of protesters in his speech to the conference, Keir Starmer said: “Make no mistake – I will defend our decisions in the Budget all day long. I will defend facing up to the harsh light of fiscal reality, I will defend the tough decisions, that were necessary to stabilise our economy, I will defend protecting the payslips of working people, fixing the foundations of our economy, and investing in the future of Britain and the future of Wales, finally turning the page on austerity – once and for all.”
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