The CLA View

The onset of autumn brings the darker evenings and cooler days. It also means we are just weeks away from another government Budget. This time, it will be delivered by John Healey as Chancellor rather than Rachel Reeves, following his appointment in the summer as part of the new Prime Minister’s reshuffle.

It may be a new face at the dispatch box on October 28, but it is the decisions taken by his predecessor which still loom large for rural communities.

It was the 2024 Autumn Budget, when the Labour government confirmed its first major changes to policies that would impact rural communities and business owners. It announced plans for Agricultural Property Relief (APR) and Business Property Relief (BPR) so that only the first £1 million of qualifying farm and business assets would receive 100% relief.

Following an intense period of well-publicised lobbying by the CLA, and other organisations, in December 2025, as the Finance Bill began its passage through Parliament, the UK Government announced a significant change to its planned reforms.

It was revealed that the valuation threshold for tax reliefs will rise from £1m to £2.5m – or £5m for married couples.

While this was welcomed by many, the changes went nowhere near far enough and the CLA has never stopped fighting to scrap the APR and BPR changes completely.

With the Treasury developing the first Budget of Andy Burnham's premiership, we are busy preparing our submission to highlight the needs of the rural economy – which will include our position on inheritance tax.

Family-run farms and businesses are typically asset-rich but cash-poor. APR and BPR are not tax loopholes, they are necessary tax reliefs for multi-generational rural businesses.

Rarely a week goes by without me hearing how family farms and rural businesses have halted growth plans and investment due to the government’s inheritance tax changes. And you can understand their reasons. Why would you invest in growing your rural business when you know that adding value will only find you incurring an increased tax bill?

The derelict farm building that could be transformed into office space or a farm shop, creating jobs and boosting the local economy. The development of much-needed small-scale rural housing in towns and villages. Or the building of an on-farm reservoir. They all come with significant up-front costs and investment which simply will not happen when inheritance tax disincentivises this potential for growth.

After years of tension between the government and rural communities, there is a real opportunity to reset the relationship. CLA President Gavin Lane has already written to the Prime Minister with a simple message: work with rural Britain, not against it.

As a non-political organisation, the CLA works with all parties to champion the countryside. And we will speak up when any government makes misguided decisions that will negatively impact rural businesses, jobs, investment and growth.

The Prime Minister would benefit from spending more time with the farmers, land managers and rural entrepreneurs affected by his government's decisions. There is no substitute for hearing first-hand both the challenges they face and the contribution they make to communities across the country.

We will see in the coming weeks whether this Labour government, version 2.0 if you will, can give the rural economy the reboot it needs. And if that includes reversing its previous inheritance tax decisions.