Family farm tax: industry reacts as Finance Bill clears second reading
17th December 2025
Farming industry representatives and politicians responded to the latest situation with the family farm tax following yesterday’s second reading of the Finance Bill.
Farmers gathered outside the Parliament yesterday, when the Finance Bill had its second reading. The proposal includes major implications for IHT, APR and BPR.
A farmer who attended the demonstration said that this was a “critical moment” before the Bill moves into the committee stage, where the detail is scrutinised and key decisions are shaped.
“That’s why being visible in London on the 16th matters; it sets the tone going into committee stage; it lets MPs know we are still here, still fighting, and not giving up; and it keeps IHT, APR and BPR firmly on the agenda before Christmas recess,” he added ahead of the gathering.
The Finance Bill was put and agreed to by 341 votes to 195, meaning that it successfully passed its second reading. The Bill will now proceed to the next stages of its passage through Parliament: programme motion and committee scrutiny.
‘Disastrous tax-raising Budget‘
Gavin Lane, CLA president, commented on the news: “Farmers and family business owners have planned for decades on a simple promise: build a viable business and you can pass it onto your children. This policy turns that promise into a tax trap. For many, the only way out is to sell land or break up the firm. It goes against a sense of fairness to have the rug pulled from beneath them.
“Labour MPs representing rural seats know that this policy is a disaster, and polling shows the public can see it too. Markus Campbell-Savours voted against these changes last week because Labour promised at the election it would not put inheritance tax on family businesses. He has refused to break that promise, and he has earned enormous respect.
“As the Bill progresses in the new year, we will work with all Labour MPs who are prepared to put their constituents, and economic stability, above party loyalty.”
Robbie Moore, Conservative MP for Keighley and Ilkley, said he voted against Labour’s “disastrous tax-raising Budget”.
As he attended the farming demonstration yesterday, he added: “Quite rightly our farmers are showing their strength of feeling against this disastrous Labour government.
“I am right behind those guys. Why? Because the family farm tax and the family business tax will have catastrophic implications not only on our farming businesses but also on our family businesses and the wider agricultural food supply chain. These guys know it; it’s a shame that the government don’t.”
What does the Bill mean?
NFU has explained that a Finance Bill is slightly different from other Bills.
“Because they enact Budgets, in this case the Autumn Budget, there has usually already been a few days’ debate following the Chancellor’s speech. During this year’s Budget debate for instance, plenty of Labour MPs stood up to speak out against the family farm tax.
“This month’s second reading of the Finance Bill focused on the general principles of what the Chancellor set out in her Budget. The NFU sent a briefing to MPs to help them prepare for the debate which opened the second reading,” a spokesperson for the union explained.
At second reading, MPs are given a yes/no (or aye/no) vote on whether a Bill progresses to the next stage.
The crucial point is that no amendments to a Bill are allowed at second reading. Because there are no amendments to debate or vote on, there is just one vote for MPs to make – whether the Bill should proceed to the next stage on its journey into law.
As His Majesty’s Most Loyal Opposition, the Conservative Party tabled a ‘reasoned amendment’ that was voted on by MPs. Despite its name, a reasoned amendment does not change the contents of a Bill.
The amendment stated that the Finance Bill should not progress further because it includes, among other things, the family farm tax, NFU added.
“While the NFU remains in close contact with Labour backbenchers on the family farm tax, we did not expect another parliamentary rebellion at this stage.
“We understand that even those Labour MPs who previously abstained on Resolution 50 will still welcome the overall Budget package. It is important to remember that the Finance Bill contains lots of other changes as set out in the Chancellor’s Budget, for example, the removal of the two-child benefit cap.
“It is not uncommon for MPs who vote in favour of the Bill (and against the reasoned amendment), to then back amendments at later stages. It is at these later stages that greater protections for elderly and terminally ill farmers can be added.
“The House of Commons will rise for its Christmas recess on 19th December. Therefore, the chance for MPs to carry out more detailed scrutiny of the Finance Bill, including the specific clauses on the family farm tax, will come in the New Year.
“That means that there is still, after all this time, an opportunity for the government to act,” a spokesperson for the union explained.
Committee Stage will start on 12th January, with a deadline of 26th February. This is the first time that MPs can put forward amendments to the Finance Bill.
Farmers are considering taking their lives over IHT changes
She said: “Last year rural communities, including many farmers, put their trust in Labour for the very first time in a very long time and gave us a mandate for change in this country.
“However, and I hear this from many of the 950 farm holdings in my constituency, feel like they were misled around the changes to IHT and APR, which are going to pull the rug from underneath farming communities and obliterate the family farm for many farmers.”
The MP said that many elderly or terminally ill farmers are now considering taking their lives before the legislation comes into force in April 2026.
Cat Smith MP then asked PM Starmer if he can see how farmers can feel that this government has not necessarily treated them the way that they expect to be treated as working people.
The PM said: “I do think on agricultural property relief, there had to be sensible reform. And I think this is sensible reform.”
PM Starmer has also mentioned a ‘roadmap for farming’ that the government is currently agreeing on and the profitability review led by Baroness Batters.
‘Huge missed opportunity’ – Industry responds to Budget announcement
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