The Country Land and Business Association (CLA) has voiced strong opposition to Budget 2025, following chancellor Rachel Reeves' announcement of freezing the agriculture budget at 2014 levels, which effectively reduces funding in real terms. The budget also introduces a cap on agricultural property relief (APR).

In its first budget in 14 years, the new Labour government is targeting inheritance tax reliefs—a move that the CLA warns will severely impact farms nationwide.

From April 2026, the first £1 million of combined business and agricultural assets will remain exempt from inheritance tax, while assets exceeding this threshold will face a 20% effective tax rate due to a 50% relief, according to the chancellor’s statement.

MORE NEWS | RSABI welcomes Susan Stewart as new case officer

MORE NEWS | Farmer comedian Jim Smith heads to Skye

CLA president Victoria Vyvyan reacted to the budget, saying: “The government was elected on a promise of growth, but has done nothing for the countryside but freeze the agriculture budget and raise taxes.

“Labour has made repeated assurances over the last 12 months that it would not tamper with inheritance tax reliefs, and its decision to now rip the rug from under farmers is nothing short of a betrayal.

“This puts dynamite beneath the livelihoods of British farming, and flies in the face of growth and investment. We estimate that capping agricultural property relief at £1m could harm 70,000 UK farms, damaging family businesses and destabilising food security.

“In its attempts to raise more revenue the government will cause great damage, jeopardising the future of rural businesses up and down the country. Many farmers, operating on slim margins, will now face having to sell land to pay inheritance taxes.” she said.

A recent CLA survey revealed that 80% of respondents ‘strongly agreed’ or ‘agreed’ that farm payments are crucial for their farm’s viability.

Vyvyan emphasised that freezing the budget at 2014 levels will have serious repercussions for farmers, consumers and the environment, eroding industry confidence and stability and undermining farm profitability.

She added: “Defra’s proposal to accelerate the end of direct payments would be incredibly damaging to investment in farming and diversified businesses, it could hit sustainable food production and undermine improvements to wildlife habitats, flood management and access to nature.

“At a time of profound change in the industry, adjusting to new agricultural policies, the government is offering no vision for a positive economic future for us in the rural community. We will continue to argue the case for these vital reliefs.

“There is enormous growth potential in the countryside, but we need the government to be working with us, not against us.” she concluded.