Rural Labour MPs facing the loss of nearly 45,000 jobs from their constituencies have put Keir Starmer on notice of a fresh rebellion over his inheritance tax raid. The Prime Minister could see a fresh revolt by plotting backbenchers in countryside seats following the government's U-turns on winter fuel payments, welfare and an inquiry into grooming gangs.
Sir Keir's rural backbenchers are set to lose a total of 43,560 jobs and £2.8billion in economic productivity by the end of parliament because of the government's changes to agricultural property relief (APR) and business property relief (BPR), an analysis of the CBI Economics report found.
Labour peer and Countryside Alliance president Baroness Ann Mallalieu said: "As we creep closer towards the implementation of the family farm tax in April 2026, it is vital that all steps are taken to get the government to see just how damaging it will be for rural communities. Many farmers, particularly the elderly, who I speak to are facing huge uncertainty and suffering from a crippling anxiety. Labour worked so hard to rebuild its relationship with the countryside, but all this risks being demolished, should the IHT changes go forward as proposed.
"It is vital the government listens to its rural Labour MPs who are pushing for a rethink, as well as the farming and rural sector who have only ever asked for an opportunity to be listened to, which they were not before the consequences of this ill thought out tax was announced".
Tory leader Kemi Badeonoch, speaking exclusively to the Express, said: "What is happening in rural constituencies is happening because Labour don't understand farming, they don't understand rural areas. They don't understand business.
"They think that there's a magic money tree, and you just go to business, shake it and pull the leaves off.
"And what's actually happening is that people are looking at these increased taxes, they're not investing, they're not hiring people, they're not creating jobs, and that's why we're seeing a huge rise in unemployment.
"Unemployment has risen every single year since late that's sorry. Unemployment has risen every single month since Labour came into office. That's a disgrace."
Chancellor Rachel Reeves said that from April 2026, combined agricultural and business property assets up to £1 million will still receive 100% relief but anything above that will be taxed at an effective rate of 20%.
Asset rich farmers who are cash poor fear they will have to sell off their land - making it unviable for food production - to foot the tax bill.
The Daily Express has campaigned for the Government to U-turn on its inheritance tax raid through the Save Britain's Family Farms crusade.
Despite not being a rural constituency, Keir Starmer's Holborn and St Pancras is projected to lose 1,037 jobs and £124 million in economic productivity under Labour's proposed reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR), according to a new report.
The changes to BPR are expected to affect urban areas as well, placing thousands of small family-run businesses at risk across the UK. While rural businesses typically employ fewer people, family firms in urban centres tend to have larger workforces, making the potential job losses in cities especially significant.
The report also estimates that Rachel Reeves's Leeds West constituency could see 341 jobs lost, while Angela Rayner's Ashton-under-Lyne may lose 217. In Cambridge, the seat of Farming Minister Daniel Zeichner, as many as 667 jobs are at risk.
Nationwide, the proposed caps on inheritance tax reliefs for business and agricultural assets could result in up to 200,000 job losses and a £14 billion blow to the UK economy, the report found. Commissioned by Family Business UK and conducted by CBI Economics, the analysis assessed the potential impact across every parliamentary constituency.
The Country Land and Business Association then provided additional breakdowns, focusing specifically on the effect within Labour-held rural seats.
Joe Evans, vice president of the Country Land and Business Association, said: "This report says what we've all been warning: this tax is pulling rural Britain backwards. Work is drying up. Investment is on hold. People are thinking twice before hiring, expanding, or staying open at all. Labour keeps talking about saving money, but this tax is costing us far more -
jobs, businesses, and a future for the next generation. If the government wants growth, it needs to stop punishing the people who grow the food, run the shops, restore our landscapes, and keep the countryside working."
Shadow Environment Secretary Victoria Atkins added: "Labour's dodgy maths strikes again. Their vindictive taxes on the countryside are causing economic collapse and job losses. No wonder Labour's rural MPs are finally building the courage to challenge their chaotic leadership to reverse the disastrous APR and BPR policies - the family farm and family firm taxes.
"It's clear that these decisions were purely ideological. With no real impact assessment done, Starmer and Reeves should do the right thing, accept they were wrong and make this their next U-turn."
More than 40 Labour MPs are said to be considering a bid to water down looming changes to inheritance tax.
Sir Keir's recent reversals has left Labour rebels feeling emboldened that they can force the Government into further policy changes.
A "rural growth group" of Labour MPs has proposed the raising of the £1million cut-off point at which estates lose their tax reliefs.
They have suggested estates receive full tax relief on the value of agricultural properties up to £10million, 50% to £20million, and nil thereafter.
Sam Rushworth, Labour MP for Bishop Auckland, who is a member of the group,
said last week that they would "consider what amendments to put down".
Speaking to the Telegraph, Mr Rushworth said: "We are all keen to avoid amendments. I don't want it to get to that point. I am a Labour MP and I broadly support the Government.
"I would like to see them bring forward different recommendations in the Bill."
A government spokesman said: "Our reforms to Agricultural and Business Property Reliefs will mean three quarters of estates will continue to pay no inheritance tax at all, while the remaining quarter will pay half the inheritance tax that most estates pay, and payments can be spread over 10 years, interest-free. This is a fair and balanced approach which helps fix the public services we all rely on.
"Capping the rate of corporation tax, reforming planning, establishing a National Wealth Fund and creating pension megafunds is part of our Plan for Change to get Britain building, unlock investment and support business so we can raise living standards and make all parts of the country better off."
