Deputy leader Lucy Powell says Labour must ‘stick to manifesto’ over EU customs union, in implicit rebuke to Streeting
In an interview published at the weekend, Wes Streeting, the health secretary, suggested that he would like Britain to join a customs union with the EU. This is not government policy, and it is a proposal that Keir Starmer has ruled out. But Streeting would like to be PM himself one day and the interview was interpreted as his (latest) attempt to ensure that he is well positioned in case there is a leadership contest before the next election.
No 10 largely played down the significance of Streeting’s comments yesterday.
But Lucy Powell, Labour’s deputy leader, has delivered an implicit reprimand to the health secretary. In an interview with the BBC’s Newscast podcast, she said the government could not join a customs union because it ruled this out at the election.
Asked about Streeting’s comments, Powell said:
I’m not quite sure that was what Wes was saying but what I do know is, like me, Wes is very clear that we need to stick to our manifesto.
These things were in our manifesto for a reason, because we wanted the country to trust us … It’s a manifesto commitment and it’s really important that we stick to those.
Powell also said that developing closer ties with the EU was “something that we are already doing” and that these measures were “really important”.
While Powell is right about the manifesto, many Labour party supporters side with Streeting on this issue. A poll published yesterday said 80% of people who voted for the party at the last election think a new leader should start talks with the EU on forming a customs union.
Key events
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Afternoon summary
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Family-run coach companies will also benefit from inheritance tax U-turn, says trade body
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Tories says getting rid of NCHI reporting system for police would be ‘welcome step for free speech’
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Next Tory government will ‘abolish family farm tax entirely’, Conservative party says
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Deputy leader Lucy Powell says Labour must ‘stick to manifesto’ over EU customs union, in implicit rebuke to Streeting
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Reform council’s plan to shut eight care homes ‘a betrayal of local people’
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Labour changed policy because it ‘eventually recognised’ what it was saying about farm tax impact wasn’t true, NFU chief says
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Farm inheritance tax U-turn ‘to cost £130m’
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Lib Dems say government should go further, and get rid of farm inheritance tax in full
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Reform UK says farm tax U-turn ‘better than nothing’, but many farmers still face ‘crippling bills’
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Farm tax U-turn happened because ministers listened to Labour Rural Research Group, its members claim
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Badenoch says farm tax U-turn ‘big win’ for Tories, and for her because she ignored advice to drop campaign against it
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Tories says farm inheritance tax U-turn comes ‘too late’ because ‘businesses and lives have been lost’
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NFU welcomes inheritance tax U-turn, saying it will be ‘huge relief’ to many farmers and ‘common sense has prevailed’
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Government claims it will still get most of planned £500m per year from farm inheritance tax, despite U-turn over threshold
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Defra says 85% of farms will be protected from higher inheritance tax following today’s U-turn
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Inheritance tax for farmers to kick in at £2.5m, not £1m as planned, in government U-turn to help farming community
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Four-day week may be considered a sign of failure, England councils told
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Lib Dems call for creation of fly tipping hotline to improve reporting of ‘mountain of rubbish’ problems
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Non-crime hate incident recording system for police ‘not fit for purpose’ and must be replaced, expert body to tell Home Office
Afternoon summary
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Lucy Powell, Labour’s deputy leader, has said the government cannot join a customs union with the EU because that would breach Labour’s election manifesto, in an implicit rebuke to Wes Streeting who has suggested the UK should be doing that. (See 3.23pm.)
For a full list of all the stories covered on the blog today, do scroll through the list of key event headlines near the top of the blog.
Family-run coach companies will also benefit from inheritance tax U-turn, says trade body
Although most of the attention has been on farms, today’s inheritance tax U-turn covers agricultural property relief and business property relief – which means people who want to pass on other types of family business to their children may also benefit.
Today the Confederation of Passenger Transport has issued a statement saying many coach operators may benefit. It says:
Eight out of ten coach operators in the UK are family businesses. Many of these businesses are asset intensive, comprising garages with substantial land for parking in addition to the vehicles themselves, which can cost more than £300,000 each.
A year ago, in a survey by the CPT, 71% of coach operators said they would be affected by changes to inheritance tax rules announced in the 2024 Budget, with 46% saying it could affect the viability of their companies.
Today’s decision to raise the threshold for business property relief from £1 million to £2.5 million will take a significant number of these operators out of inheritance tax liability, allowing owners to pass their family businesses onto the next generation.
Tories says getting rid of NCHI reporting system for police would be ‘welcome step for free speech’
It is a good day for the Conservatives. As well as the government responding to what they (and many others – including at least one Guardian columnist) have been saying about the farm inheritance tax, it has also emerged that the Home Office is expected to get rid of the non-crime hate incident reporting system for the police. (See 9.32am.) This is another Tory proposal – albeit not one that they implemented during the many years they were in office.
Responding to the Telegraph story, Matt Vickers, the shadow policing minister, said:
For months, the Conservatives have been clear that the police should be catching real criminals, not policing opinions online. Ending non-crime hate incidents is a welcome step for free speech and common sense.
We have long called for these absurd records to be scrapped, but just a few months ago Labour voted to keep them.
Now the government must back these recommendations and go further by backing our plans for more police on the streets and tougher action to deal with shoplifting.
Emma Little-Pengelly, the DUP deputy first minister of Northern Ireland, has welcomed the farm inheritance tax U-turn. In a statement on social media, she said:
A huge campaign and a time of significant worry, but a huge well done too to all who have helped achieve the UK Gov U-Turn resulting in this uplift of the thresholds.
I welcome this announcement by the Government, protecting family farms and businesses to sustain and support growth should always be a priority for a Government. The UK needs economic growth, the damaging move to lower thresholds threatened the very backbone of our economy.
Next Tory government will ‘abolish family farm tax entirely’, Conservative party says
The Tories have said in a news release that “the next Conservative government will abolish the family farm tax entirely”. Victoria Atkins, the shadow environment secretary said:
Farmers will not forgive Labour or forget just because of a partial U-turn. They know it is only the Conservatives who will scrap the family farm and family business taxes in their entirety.
The Liberal Democrat are also saying this. (See 1.13pm.)
But it means both parties are open to the charge that they are now prioritising a tax cut that would only really benefit farmers like Jeremy Clarkson.
These are from Luke Tryl, the More in Common pollster, on the farm inheritance tax U-turn.
A focus group quote that stuck with me from a disappointed Lab voter was along lines:
“Why are they (Labour) picking on Pensioners (WFA), farmers (IHT), small businesses (NICS), these groups who can’t fight back?”
Telling 2 of those 3 have been significantly watered down now
Think it’s fair to say the economic decisions and narrative of Lab’s first year
– Winter Fuel
– Rose Garden Speech
– NICs
– Farmers IHT
– Approach to disability benefits
– Not enough help on cost of living
Did more than anything else to cause Labour’s crash in popularity
Not least because it seemed to spell more of the same on austerity/tough choices, rather than ‘Change’ people voted Labour for. Question is whether u-turns and change of emphasis in 2025 budget can turn people’s impressions around.
What about political damage of u-turns? In general most don’t care about individual u-turns and take the view, if you’re wrong change your mind. But problem – something we hear in groups – might be so many high profile ones reinforce idea that PM doesn’t know what he stands for.
Deputy leader Lucy Powell says Labour must ‘stick to manifesto’ over EU customs union, in implicit rebuke to Streeting
In an interview published at the weekend, Wes Streeting, the health secretary, suggested that he would like Britain to join a customs union with the EU. This is not government policy, and it is a proposal that Keir Starmer has ruled out. But Streeting would like to be PM himself one day and the interview was interpreted as his (latest) attempt to ensure that he is well positioned in case there is a leadership contest before the next election.
No 10 largely played down the significance of Streeting’s comments yesterday.
But Lucy Powell, Labour’s deputy leader, has delivered an implicit reprimand to the health secretary. In an interview with the BBC’s Newscast podcast, she said the government could not join a customs union because it ruled this out at the election.
Asked about Streeting’s comments, Powell said:
I’m not quite sure that was what Wes was saying but what I do know is, like me, Wes is very clear that we need to stick to our manifesto.
These things were in our manifesto for a reason, because we wanted the country to trust us … It’s a manifesto commitment and it’s really important that we stick to those.
Powell also said that developing closer ties with the EU was “something that we are already doing” and that these measures were “really important”.
While Powell is right about the manifesto, many Labour party supporters side with Streeting on this issue. A poll published yesterday said 80% of people who voted for the party at the last election think a new leader should start talks with the EU on forming a customs union.
Reform council’s plan to shut eight care homes ‘a betrayal of local people’
A Reform UK-led council plan to shut eight of its residential care homes has been condemned as “a betrayal of local people”, Mark Brown reports.
Labour changed policy because it ‘eventually recognised’ what it was saying about farm tax impact wasn’t true, NFU chief says
Tom Bradshaw, the NFU president, was on the World at One talking about the farm inheritance tax U-turn. Here are the key points he made.
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Bradshaw said he thought that ministers changed their mind about the inheritance tax plan because of what they were told about the “human impact” of the policy. Asked what changed, when the government has spent more than a year defending the original budget 2024 plan, he said:
I think it came down to the human impact of the policy and the anti-forestalling clause within the budget [see 1.45pm] meant that the elderly generation had no way to plan, and it had trapped them without ability to pass down their estates because they didn’t expect to live for seven years.
He said that he thought a conversation he had with Keir Starmer about this 10 days ago made a difference.
I was in with the prime minister 10 days ago, and we had a really honest conversation about the human impacts of this policy. I think that was really significant.
This may explain one of the most telling exchanges during the liaison committee hearing last week. The Labour MP Cat Smith asked Starmer:
Is the prime minister aware that some farmers who have terminal diagnoses are now actively planning to expedite their own deaths so that they hit before April?
And Starmer replied:
I have had discussions with a number of individuals who have drawn all manner of things to my attention.
On the World at One, Bradshaw also said that the vote in the Commons at the start of the month, when at least 20 Labour MPs deliberately abstained because they would not vote in favour of the farm inheritance tax, made a difference.
I think eventually the government recognised that what they were saying about protecting family farms wasn’t the truth, and that this new threshold they proposed today will mitigate the impacts on a significant proportion of the working family farms.
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He implied that, while the NFU would like the government to go further and get rid of the farm inheritance tax in its entirety, this was no longer an absolute priority. Asked if the NFU would stop campaigning, he said:
We have a difference of view as to whether inheritance tax should exist or shouldn’t exist [for farms]. We’ve been trying to mitigate the impacts of this policy. We still feel that taxing business assets as though they are personal wealth is wrong, but the changes that have been made today get us to a much more reasonable position for the vast majority to be able to plan the way through.
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He said that he hoped Labour would restore the whip to Markus Campbell-Savours, who had it withdrawn after he was the only government backbencher to vote against the farm inheritance tax earlier this month.
There’s over 100 rural Labour MPs and I think that if the government turn their back on those rural MPs then they don’t stand a chance at the next election.
In those rural areas, those Labour MPs have to make sure that the voice of farming is fully represented and I think that gives us an opportunity as we move into 2026 to get the policies in place that are going to unlock the opportunity to deliver a thriving, profitable industry for the future.
Here is the full statement from Tom Bradshaw, the NFU president, about today’s farm inheritance tax U-turn. He did not mention Rachel Reeves in the extract I quoted earlier (see 12.12pm) but in the full statement he said:
I’d like to thank the prime minister for recognising the policy needed amending and the chancellor for bringing in the spousal transfer in the budget. Combined this is a significant change.
Alistair Carmichael, the Lib Dem MP who chairs the Commons environment committee, has released a statement welcoming the farm inheritance tax U-turn as a “major concession”. His committee, which has a Labour majority, called for the proposed tax increase to be paused.
Carmichael said:
The lesson here surely must be that the government should listen to farmers and the wider rural community across the piece on the issues that matter to us. The government could have saved themselves a lot of time and heartache if they had started with an approach based on respect and genuine engagement. Whether it is on the farm tax, on support payments, regulation or future trading arrangements, the Government will have a better time politically – and in terms of outcomes – if they engage more and dictate less.
Carmichael was one of the liaison committee members who questioned Keir Starmer harshly about this at the committee’s hearing last week. He focused in particular on the “anti-forestalling clause” in the finance bill. He told Starmer:
It means that anyone who transfers their property or their firm to a descendant, but dies within seven years, will be liable to pay inheritance tax under the new system. If they do not live seven years, they could even trigger capital gains tax. If you do nothing, though, and you die before April next year, the estate passes tax-free. Do we agree, prime minister, that nobody should be left feeling that they would be better off dying between now and next April?
In reply, Starmer said nobody should feel like that, but that the government had a right to introduce “sensible reform”.
Farm inheritance tax U-turn ‘to cost £130m’
The farm inheritance tax U-turn announced today will cost the Treasury £130m, the BBC’s Joe Pike told the World at One.
This is consistent with what the government has said publicly. (See 12.03pm.)
Lib Dems say government should go further, and get rid of farm inheritance tax in full
The Liberal Democrats are also chalking up the farm tax U-turn as a victory for their campaigning. This is from Tim Farron, the party’s environment spokesperson.
It is utterly inexcusable that family farmers have been put through over a year of uncertainty and anguish since the government first announced these changes.
Liberal Democrats were the first to call out and oppose the unfair family farm tax in last years Budget and we have been proud to stand alongside our farming communities to campaign against it ever since. This concession has been hard won, and I am so grateful to all the farmers who have fought tirelessly to achieve this.
The Lib Dems are also calling for the farm inheritance tax to be repealed in full. Farron went on:
We demand that the government scraps this unfair tax in full and if they refuse to, Liberal Democrats will submit amendments in the new year to bring it down.
This is significant because it means, if it is still the Lib Dem (and Tory?) position at the next election, it means they will be proposing a tax cut that would only benefit the most wealthy farmers.
Reform UK says farm tax U-turn ‘better than nothing’, but many farmers still face ‘crippling bills’
Reform UK has also campaigned with farmers against the farm inheritance tax. In a statement, Richard Tice, the party’s deputy leader, says that today’s announcement is “better than nothing” but that many farms still face “crippling bills”. He says:
Labour’s tax raid on family farms has already been a disaster for the sector, plunging countless farmers into despair, with heartbreaking reports of some taking their own lives in order to save their farms for future generations.
This cynical climbdown – whilst better than nothing – does little to address the year of anxiety that farmers have faced in planning to protect their livelihoods. Even with the raised threshold, many family farms will still face crippling bills. With British agriculture hanging by a thread, the government must go further and abolish this callous farms tax.
Farm tax U-turn happened because ministers listened to Labour Rural Research Group, its members claim
Another group claiming some credit for the farm tax U-turn is the Labour Rural Research Group (LRRG), a group of MPs representing rural constituencies.
This is from its chair, Jenny Riddell-Carpenter, who represents Suffolk Coastal.
This wouldn’t have been possible if the government hadn’t listened to rural Labour MP colleagues in the Labour Rural Research Group, to farmers, and to industry. This move shows the government is fully committed to backing working farms and our countryside – after years of successive failures under the Conservative government that brought farming to its knees.
This is a big step that will go a huge way to back Britain’s working farms, whilst the government takes forward wider recommendations in Baroness Batters’ Farming Profitability Review.
And this is from its vice chair, James Naish, who represents Rushcliffe.
Rural colleagues and I have never disputed the very strong argument about the need to tackle land banking, or that there are some very wealthy farmers out there. But we have to make sure that smaller farmers with low profitability can continue to function by producing food, protecting nature and supporting flood defence schemes that the nation needs to thrive. This announcement will do that.
Riddell-Carpenter beat Thérèse Coffey, the former deputy PM, to win her seat last year, and she has a majority of just 1,070. Naish has a majority of 7,426, but before that Rushcliffe was Tory for more than half of century, with the former chancellor Ken Clarke as MP for most of that period. The LRRG isn’t really a Labour heartlands organisation, and its members have a strong sense of how damaging the inheritance tax policy was to the party in rural areas.
Badenoch says farm tax U-turn ‘big win’ for Tories, and for her because she ignored advice to drop campaign against it
Kemi Badenoch has now issued her own response to the farm inheritance tax U-turn, in a lengthy post on social media. She is describing it as, in effect, a personal victory. She explains:
This is a huge u-turn by the government and a big win for the Conservative Party’s campaign against Labour’s family farm tax.
Earlier this year, I was told to drop our campaign, that there weren’t many votes in it, there weren’t many farmers, and people assumed they were wealthy enough to cope anyway. I ignored the advice and kept campaigning …
Farmers are exactly the kind of people Conservatives stand up for: hard-working, responsible, family-focused, and committed to passing something on to the next generation. That feels especially important at Christmas, a time when family, care for others, and responsibility are at the heart of what we celebrate.
Tories says farm inheritance tax U-turn comes ‘too late’ because ‘businesses and lives have been lost’
The farm inheritance tax U-turn is a significant win for the Conservative party. They described the budget 2024 proposal as a “family farm tax” and they have campaigned against it more vocally than against almost any other Labour policy.
But Victoria Atkins, the shadow environment secretary, has been a bit grudging in her response this morning – and notably less postive than the NFU (see 12.12pm). She says:
At long last, Labour has snuck out a partial u-turn on their vindictive Family Farm Tax.
It is too late for some, however.
Businesses and lives have been lost. Rural communities will not forget the distress, pain and panic this government has caused them.
NFU welcomes inheritance tax U-turn, saying it will be ‘huge relief’ to many farmers and ‘common sense has prevailed’
The National Farmers’ Union has welcomed today’s farm inheritance tax U-turn, saying that “common sense has prevailed” and that this will be a “huge relief to many”.
In a statement, the NFU president Tom Bradshaw said:
Changes to agriculture property relief (APR) and business property relief (BPR) announced in last year’s budget came as a huge shock to the farming community. Until that moment, the best tax planning advice was to hold on to your farm until death and pass it on to the next generation who could continue to run a viable farming, food producing business.
The original changes to APR and BPR, contained within the finance bill, resulted in a pernicious and cruel tax, trapping the most elderly and vulnerable people and their families in the eye of the storm. The NFU and its members have stood strong for what we believed in.
I am thankful common sense has prevailed and government has listened.
I have had two very constructive meetings with Prime Minister Sir Keir Starmer and dozens of conversations with Defra Secretary of State Emma Reynolds. She has played a key role underlining the human impact of this tax.
These conversations have led to today’s changes which were so desperately needed.
From the start, the government said it was trying to protect the family farm and the change announced today brings this much closer to reality for many.
This statement is notable for the fact that Bradshaw is suggesting that Starmer and Reynolds were most influential in the government changing its mind on the inheritance tax threshold.
UPDATE: I have removed the final sentence from the original post which said that Bradshaw did not mention Rachel Reeves, the chancellor, when giving credit to the ministers who changed the policy. In fact, in his full statement, Bradshaw does mention Reeves. He says:
I’d like to thank the prime minister for recognising the policy needed amending and the chancellor for bringing in the spousal transfer in the budget. Combined this is a significant change.