Musk tells Starmer: Your tax raid on farmers is wrong

Sir Keir Stamer pictured on a farm visit
Sir Keir Stamer pictured on a farm visit

Elon Musk has attacked Sir Keir Starmer’s inheritance tax raid on farmers, piling pressure on the Treasury to backtrack.

The world’s richest man said “we should leave the farmers alone” in response to a post on X criticising government plans to impose inheritance tax on agricultural land.

The Telegraph can reveal that Labour MPs want the Treasury to consider raising the threshold at which the tax is applied from £1 million after being inundated by angry calls from farming constituents.

Those representing rural constituencies have warned that policy – introduced by Rachel Reeves in the Budget and now dubbed the “tractor tax” – could undermine Britain’s food security.

The National Farmers’ Union (NFU) is launching a pressure campaign that will see hundreds of farmers come to London later this month to meet with Labour MPs.

The NFU accused Ms Reeves of relying on misleading figures and said the number of farms that would be affected is double the Treasury estimate.

Ed Balls, the former Labour shadow chancellor, has also questioned whether the Treasury really “thought through” the implications of the tax change on farmland.

Ms Reeves, the Chancellor, announced on Wednesday that she would stop farmers from passing on their estates after death without paying inheritance tax.

Instead, from April 2026, only assets up to £1 million can be passed on tax-free, with those above this threshold facing an effective 20 per cent tax charge.

Mr Musk responded to a post on Friday that accused the Prime Minister of bringing in a tax change that was going to “kill off UK family farming”.

The tech billionaire replied: “We should leave the farmers alone. We [owe] farmers immense gratitude for making the food on our tables!”

Elon Musk, pictures left with Donald Trump, told the Prime Minister to 'leave farmers alone'
Elon Musk, pictured left with Donald Trump, told the Prime Minister to ‘leave farmers alone’ - Justin Merriman/Bloomberg

The message is part of a pattern of Mr Musk using his platform to agitate against Left-wing politicians. The entrepreneur has previously criticised Sir Keir’s handling of the summer riots, dubbing him “two-tier Keir”. He was not invited to Labour’s investment summit last month.

Labour MPs are more politically exposed to anger from farmers than in previous years, given that around 100 of them now represent rural constituencies.

Some of those MPs who talked to The Telegraph described being inundated with concerned messages from farmers over the inheritance tax raid and urged the Treasury to consider raising the threshold at which it kicks in, protecting smaller farmers.

One Labour MP said: “There may also be a number of generational family farmers who will be caught up within this.”

The MP added: “You could push the threshold higher. The Government should look at that in the future. The threshold is a blunt instrument.”

A second Labour MP said: “Food security is a real issue. I’ve had some farmers who live in my constituency who have said that this is a big issue for them.”

The source added: “There is clearly an issue about the transfer of wealth and needing to tax that more, in my view. But clearly there can be unintended consequences.

“Farming is a critical component of the national economic infrastructure which means it needs to be carefully maintained.

“If people are going to leave the industry because of this tax and it will hit a smaller number of smaller farmers it needs to be addressed. The Treasury will need to consider tweaking it.”

Davey cartoon shows Sir Keir Starmer on a tractor spreading muck on farmers
Davey cartoon shows Sir Keir Starmer on a tractor spreading muck on farmers

The UK is already reliant on imports for much of its fruit and vegetables. In the wake of the Covid pandemic, MPs argued for the country to become more self-sufficient. According to 2023 figures from the Department for Environment, Food and Rural Affairs, the UK’s self-sufficiency in fresh vegetables is at its lowest since records began in 1988 at 53 per cent.

Mr Balls, speaking on his Political Currency podcast, said: “This issue of inheritance tax on family farms, where the limit is a million pounds before you pay inheritance tax, I think this is going to be one of those things which may become a growing issue in the coming weeks and months.”

The NFU has warned that half of working farms will be hit by the tax raid, despite the Treasury’s claim that less than a quarter will be affected.

Tom Bradshaw, president of the NFU, said: “The Treasury’s figures which claim this will only affect one in four British farms are misleading.

“It’s clear the Government does not understand that family farms are not only small farms, and that just because a farm is an asset it doesn’t mean those who work it are wealthy. I have said, every penny the Chancellor saves from this will come directly from the next generation having to break up their family farm. It simply mustn’t happen.”

According to the Government’s impact assessment, “almost three quarters” of farms will be unaffected by the changes, but Mr Bradshaw said the analysis “massively exaggerates” this number.

The Government had made a “significant miscalculation” and many of the farms the Treasury said would be protected were, in fact, only small holdings that people did not make a living from, the NFU said.

According to official data, at least 70,000 farms in England are worth more than £1 million, meaning they will all be hit by the Chancellor’s inheritance tax raid.

Lucian Cook, of Savills estate agents, said that based on current land values, the threshold meant any farmer with at least 100 acres would be hit by the tax change. “Nobody is going to make a livelihood off 100 acres.”

A typical farm in England is 220 acres, with a value of more than £2 million, even before accounting for buildings and equipment. “A lot of these farms are already worth £3 million. That is the average farm, and they are still family farms,” Mr Bradshaw said.

According to farming experts, increasing the threshold to £5 million at the minimum would protect at least some working farmers.

Liberal Democrat analysis for The Telegraph has found that Tory constituencies are set to be hit four times harder by the tax raid than Labour seats.

On average, Tory constituencies have around 103 farms that will eventually be impacted by the inheritance tax move, compared to 97 for Lib Dem seats and 26 for Labour seats, according to the analysis.

Tim Farron, the Liberal Democrat environment spokesman, said: “The Government urgently needs to scrap their tractor tax or risk losing the next generation of family farmers.”

The NFU is writing to Ms Reeves demanding she back down on the tax rise. The group’s leaders are also meeting Steve Reed, the Environment Secretary, face-to-face on Monday to express their frustration.

Mr Reed mounted a defence of the policy in The Telegraph, writing: “Look at the detail and you’ll see that the vast majority of farmers will not be affected at all. They will be able to pass the family farm down to their children just as previous generations have always done.

“This is a fair and balanced approach that protects family farms while also fixing the public services those same families rely on.”

Downing Street was approached for comment.