"The Chancellor has listened, but only just enough to claim she's listening"
Following Rachel Reeves’s 2025 Budget, CLA President Gavin Lane explains why it leaves rural Britain paying the price
This is an article from CLA President Gavin Lane which was originally written as an op-ed for LBC.
The Budget announcement confirms what we feared: the Chancellor has listened, but only just enough to claim she's listening.
Yes, Rachel Reeves has conceded that the £1m inheritance tax allowance can now be transferred between spouses - effectively doubling it for married couples.
We welcome this recognition that last year's policy was flawed. But make no mistake: this change goes nowhere near far enough to remove the devastating impact on farming families and rural businesses.
For a year, we have campaigned intensively against these inheritance tax changes. More than 275,000 members of the public signed petitions. Trade associations, including the CLA, representing 160,000 family businesses wrote to the Treasury.
MPs from across the political spectrum raised concerns. Independent tax experts proposed sensible alternatives. Yet the Chancellor has chosen to press ahead with a policy that treats intergenerational asset transfer as a problem to be solved rather than the foundation of long-term rural investment.
What troubles me most is not just what this Budget contains, but what it ignores. The CLA's Rural Powerhouse campaign has consistently demonstrated that Britain's countryside holds £43b in untapped growth potential.
The rural economy is 19% less productive than urban areas - not because rural businesses lack ambition but because they lack the right policy environment.
With proper support for connectivity, planning reform, skills investment and a simplified tax regime, rural businesses could create thousands of jobs, drive innovation, and contribute substantially to national prosperity.
Instead, the Chancellor refuses to allow the rural economy to thrive. Last year's National Insurance hike has already added hundreds of thousands of pounds to employment costs for horticultural businesses alone.
Combined with rising minimum wages and now an inheritance tax regime that forces families to contemplate selling land and equipment to pay their bills, rural businesses face a perfect storm of disincentives to invest.
This government says it wants economic growth. Yet it is systematically undermining the very businesses that could deliver it. You cannot ask people to plant orchards they'll never see mature, then tell their children they cannot pick the fruit.
You cannot demand long-term environmental stewardship whilst creating a tax system that forces the break-up of family holdings. You know that once a family farm is lost, it is lost forever.
The countryside is not a museum. It is an economic powerhouse waiting to be unleashed. Rural businesses are ready to deliver on housing, renewable energy, nature recovery, and food production - but they need stability rather than ambivalence. They need a government that understands how family businesses operate, not one that views multi-generational transfer through the narrow lens of wealth inequality.
Yesterday's small concession on spousal transfer is progress, but it is far from sufficient. The Chancellor has had months to engage meaningfully with the rural sector.
She has chosen not to. Until this government recognises that working with rural businesses - not against them - is the path to sustainable growth, the vast potential of the countryside will remain locked away.
