Starmer backs down in farm tax row

The government’s partial U-turn on what opponents call the “farm tax” was a Christmas present to those campaigning against the introduction of a 20% inheritance tax from next April.

About half of the farms that will be affected will now be exempt.

But given ministers have defended the policy in the 14 months since last year’s budget, the questions are: Why change it? So why now?

The ongoing protests – orderly tractor convoys, honking horns, gatherings in Parliament Square – have certainly played a role.

The National Farmers’ Union, which organized the noisy demonstrations, also conducted a quieter diplomacy behind the scenes with Downing Street and the ministry of agriculture. Discussions have reportedly shifted to easing the policy rather than eliminating it entirely.

But there are other factors as well.

One consequence of Labour’s landslide election victory last year was that most of the party’s MPs represented rural and semi-rural seats.

Behind closed doors, some were pushing hard for concessions.

While only one person voted against it, more than 30 actively abstained to show their concerns at a parliamentary vote on inheritance tax policy earlier this month.

Beyond this, the reasons for the timing of the government’s indecision are speculative.

One of the rural rebels told me that talks with ministers this month were more positive, although they were not told before yesterday’s announcement.

And some believe Sir Keir Starmer’s appearance this month before the liaison committee of senior MPs who chair cross-party parliamentary committees played a role.

He was subjected to uncomfortable questioning by Labor MP Cat Smith and Liberal Democrat MP Alistair Carmichael; Both actually suggested that some farmers were considering suicide – or, as Smith put it, “actively planning to hasten their own deaths” – ahead of the introduction of inheritance tax on transfers to family farms next April.

The possibility of personal tragedies and terrible headlines was made very clear to the prime minister.

Downing Street is keen to step into the spotlight when MPs return to Parliament in January, and dispelling this particular political dark cloud could be seen as an important precursor.

The Conservatives argue the policy change “sneaked in” while MPs were away and cannot subject ministers to scrutiny.

The reversal of the holiday certainly does not inspire confidence in a government that holds 400 of the 650 seats in parliament.

While some Labor MPs are relieved that the government is listening, others wonder why it is insisting on a policy that will generate relatively little revenue.

This change will cost £130 million. To put this in context, this is a tiny fraction of the approximately £900bn generated annually from total taxation.

And of course there are concerns about the government’s ability to set the political tone as it trails Labor in the polls.

A modus operandi emerges in which revenue-raising policies are announced by the Treasury, followed by public outcry and, after a period of internal discontent within the Labor Party, a partial reversal when the political damage continues.

Think winter fuel, welfare reform, and now family farms.

Policies may have changed, but questions about political judgment remain.