The Prime Minister told MPs that the “vast majority” of farmers will not be affected by changes to inheritance tax (IHT) announced in the budget.

From April 2026, previously exempt inherited agricultural assets valued at over £1 million will be subject to tax at 20%, half the normal rate.

The National Farmers Union (NFU) called it a “disaster” for family farms and said it would “destroy the next generation’s ability to produce British food” and farmers would be forced to sell land to pay the tax.

Kemi Badenoch, appearing at her first Prime Minister’s Questions as opposition leader, described it as a “draconian tax on family farms” and vowed to reverse it.

He called on Sir Keir to “reassure the farming community”.

Sir Keir said last week’s Budget allocated £5bn to agriculture over the next two years.

“This is the biggest increase,” he added, comparing it to the £300 million he said the previous Tory government had underspent.

“The vast majority of farmers will not be affected when it comes to inheritance, as he knows very well; as they (the Conservatives) know very well,” he added.

The Prime Minister said Labor was “moving the country forward” by investing, while the Conservative Party was “stuck in the past”.

Later during PMQs, Tory Sir Edward Leigh, the longest-serving MP in the House of Commons, urged Sir Keir “as a good lawyer” to “listen to the evidence” if it showed that smaller family farms of around 250 acres would be seized. was seriously affected by the tax.

“Will he listen to the evidence in the spirit of compromise, keep an open mind and perhaps be prepared to raise the thresholds to protect our family farms?” Sir Edward asked.

The Prime Minister said the government had listened to farmers and taken a “fair and balanced approach” at ministers’ meeting with the NFU on Monday.

He repeated that the “vast majority” of farms would not be affected.

Noting the extra spending outlined in the budget, he added that he grew up in a rural community and knew that people in rural areas also needed “an NHS that stands on its own, schools and schools that their children can go to”. houses where their families can live”.

Since its launch in 1984, agricultural property relief (APR) It allowed small family farms, including farm buildings, cottages and houses, to be exempt from inheritance tax, as well as land used to raise crops or livestock.

Since the budget, farmers have warned that getting rid of this IHT exemption would drive many family farms into bankruptcy and decimate the countryside.

The government said it was committed to supporting farmers and “the vital role they play in feeding our country”.

Chancellor Rachel Reeves said that in some cases the APR threshold could in practice be around £3 million and other IHT allowances may also apply.

Paul Johnson, director of the independent think tank The Institute for Fiscal Studies. he said The changes “will affect a very small number of some of the most valuable farms”.

“(Farms) are actually still treated more generously than farms in the past.”

The Treasury estimates that 500 properties, including farmland, will be externally affected each year by agricultural property relief reform.