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Labour is poised to axe the controversial family farm tax at the Budget, The Mail on Sunday can reveal.
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Mail → see → Sunday
In what would spell victory for celebrity farmer Jeremy Clarkson, those close to Andy Burnham say he wants to abolish the levy - which sees farmers pay inheritance tax (IHT) when they pass family farms down to their children - on October 28.
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they → spell → October
Despite the perilous state of the public finances, those inside No10 see it as a 'relatively cheap' way to show Andy Burnham is different to Sir Keir Starmer, who introduced it in his first Budget.
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who → see → Budget
One Labour source described it as 'scraping the barnacles off the Starmer boat'.
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source → describe → boat
Axeing the levy would cost the exchequer £300million a year, a relatively modest sum, say some in the Treasury, compared to other tax cuts.
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some → axe → cuts
Another option is to raise the threshold people start paying the tax to £5million.
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people → raise → 5million
One source close to the PM admitted that Mr Burnham may go for this option to stop those using farms as an IHT loophole whilst limiting the impact on family farmers.
But critics say this would defeat the point of making any changes because even at £5million many farms would still face paying enormous bills to pass their farm down a generation.
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farms → admit → generation
John Healey will get the final economic forecast from the Office for Budget Responsibility (OBR) three weeks before the Budget - meaning he does not yet know for certain how much money he has to play with.
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he → get → money
Labour is reportedly considering scrapping its controversial inheritance tax rules for family farms at the Budget on October 28
Sources close to Prime Minister Andy Burnham say abolishing the levy could cost the Treasury around £300million a year
Insiders say getting rid of it altogether 'would go a long way' with the 135 rural Labour MPs they see as 'grumpy' and help Andy Burnham win tight marginal seats.
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Burnham → consider → seats
Another senior Labour source last night told The Mail on Sunday: 'The next election is going to be tight.
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election → tell → Sunday
If we are going to do it, we should do it now.'
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we → go → it
Changing this politically potent policy has set alight further speculation that Mr Burnham is considering calling an early election.
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Burnham → change → election
It would not be the only u-turn on Sir Keir's unpopular decisions, after Mr Burnham announced this weekend he would abandon his predecessor's plans to do away with jury trials.
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he → announce → trials
More than a quarter of rural residents say they would reconsider voting for Labour if he dropped the policy, according to a poll by Orb International for the Countryside Alliance.
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he → say → Alliance
Having won a record number of rural seats at the last General Election, the family farm tax sent countryside support for Labour plummeting.
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tax → win → Labour
Farmers were left furious when then-Chancellor Rachel Reeves announced plans to levy a 20 per cent tax on assets worth more than £1million, ending a waiver in place since the 1980s.
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Reeves → leave → 1980s
After a massive backlash and protests from farmers across the country, Sir Keir watered it down and raised the threshold to £2.5million.
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Keir → water → 2.5million
Many farmers still have to pay under the watered-down measures.
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farmers → have → measures
Last year, a record 6,300 forestry, fishing and farming businesses closed, according to the ONS.
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businesses → close → ONS
The Tories claim this as proof that the family farms tax is bad for the economy.
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tax → claim → economy
Tory shadow farming secretary Victoria Atkins described the tax as 'vindictive'.
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Atkins → describe → tax
Last night she said: 'Labour MPs were warned repeatedly that not only were they damaging businesses, leading to record farm closures in the last year, but also that they were taking an enormous personal toll on families.
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they → say → families
They ignored those warnings, and Labour MPs including the new Chancellor voted for it seven times.
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MPs → ignore → it
'Labour should axe it in its entirety at the Budget, and if they don't, the Conservatives will.'
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Conservatives → axe → Budget
Despite the concerns at the OBR, Labour advisers are optimistic that there will be enough of a financial cushion at the Budget to fund this tax cut.
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advisers → fund → cut
At Rachel Reeves' last Budget, the so-called headroom was £24billion.
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headroom → call → Budget
One Treasury expert and Budget veteran put it at closer to £10billion right now.
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expert → put → 10billion
But 'it's highly sensitive to global market movements so can change each day.'
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it → change → movements
Pressure is mounting internally for Mr Burnham to do something about the tax.
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Burnham → mount → tax
This weekend ex-farming minister under Sir Keir said the tax was flawed and ruined relations with the countryside.
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tax → say → countryside
And Labour grandee Lord Blunkett this week said the IHT raid was a 'mistake'.
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raid → say → ?
James Wright, a farmer in Somerset, last night told the MoS: 'Labour never should have introduced the family farm tax.
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Labour → tell → tax
It's bad for the families that steward our countryside and undermines our food security.
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that → undermine → security
Its removal is long overdue.'
And Mo Metcalf-Fisher, director of external affairs at the Countryside Alliance said: 'Scrapping the disastrous family farm tax would be a much welcome first step in beginning to repair the government's approach to the countryside.'
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Scrapping → say → countryside
An HMT spokesperson said: 'As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.'
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Chancellor → say → rumour
The Aporia
