Keir Starmer is facing the most intense pressure to date as rebellions from within his own party grow over controversial cuts to welfare payments and the hated ‘family farm tax’.
Up to 80 Labour MPs are rumoured to be rebelling on Labour’s £5billion cut to Britain’s enormous welfare bill, whilst 40 are opposing Chancellor Reeves’ plan to slap farmers with ‘punishing’ inheritance tax bills.
Cuts to the welfare state come as Labour scrambles to get the nation’s finances back on track after Reeves’ bombshell budget failed to inspire growth, sparked an exodus of wealth and prompted a hiring slump.
With the geopolitical situation in Europe looking increasingly perilous, Starmer pledged to raise defence spending to 2.5 per cent of GDP, funded via cutting foreign aid and welfare payments.
Welfare costs the Treasury a whopping £64.7 billion last year, more than the entire defence budget, as 2.8 million people claimed long-term sickness benefits.
With the number of sickness and disability claimants rising every year, plus an ageing population, the welfare bill has been projected to hit £100billion by 2030 by the OBR.
As a result, Work and Pensions Secretary Liz Kendall is set to announce a raft of drastic reforms to the welfare system including freezing payments, increasing check-ups on repeat claimants and potentially raising thresholds for first-time applications.
The reforms are designed to tackle the issue of people being ‘trapped’ in benefits, ie they earn more money from benefits than they would working.
It also aims to tackle the record number of young people who are not working, job seeking or on benefits.
But Labour MPs on the left have warned the reforms take a ‘sledgehammer’ to welfare and could negatively affect vulnerable people.
It is not just welfare reforms but a string of ‘un-Labour’ measures MPs are not happy about, such as removing the winter fuel payment from pensioners.
One MP considering rebelling explained: “I’ve spoken to not the usual suspects… the first thing they’ve said to me after a few minutes saying how things are going is: ‘I’m going to give the Government a slap, I’ve had enough, I don’t know what it will be, but I’m at the end of my tether. I need to show my constituents, I need to show people that I have my own brain, that I’m not going to suck up all of this.’
Some Labour MPs have already broken ranks to criticise the plans as they face pressure from their constituents.
Rachael Maskell, the MP for York Central, said there is ‘a lot of concern’ that Keir Starmer is going about welfare reform ‘in the wrong way’, insisting that ‘taking a sledgehammer’ to benefits is ‘not the right approach’.
“What I am most concerned about is the narrative. I’m getting letters from constituents who are very, very worried about losing their benefits,” she added.
Rachael Maskell – MP for York Central – has said her party is ‘taking a sledgehammer’ to welfare
PA
Keir Starmer is facing a very similar situation regarding Labour’s plans to impose inheritance tax on previously exempt farmers.
Chancellor Reeves slapped farmers with 20 per cent death duties on assets over £1million, sparking fury from cash-poor asset rich farmers.
Rural folk accused Labour of not understanding farming, pointing to concerns that with land at £10,000 an acre, machinery costing north of £500,000 and farmhouses also surging in value, farmers may be asset rich but do not have enough cash to cover large inheritance tax bills.
They say Labour is blinded to the difference between assets and income by ideology and are campaigning to be taxed at the point of sale of the asset, not the point of inheritance.
If Labour ploughs ahead with the tax, farmers say their profits (already squeezed by adverse weather, Ukraine and carbon taxes) will be wiped out for decades and lead to many farmers selling up, damaging the UK’s food security and depriving a generation of young farmers of their livelihoods.
The government argued it was a ‘fair and balanced’ way to plug the Tories’ £22billion black hole and highlight the cap can rise to £3million if farming families fulfil certain criteria and exploit loopholes.
The widespread outcry from rural communities has, just like MPs with many constituents on welfare, led to many rural Labour MPs feeling the pressure from their electorates.
As a result, Labour MPs like Henry Tufnell (Mid and South Pembrokeshire) have come out publicly against the tax.
Tufnell said it was ‘embarrassing’ that he’d told farmers in his constituency his party would not touch inheritance tax, only to immediately break that pledge.
The fresh-faced MP explained: “We had said categorically as a party that there wouldn’t be any movement on inheritance tax.
“I stood on the platform where I said directly to farmers in my constituency that it was something that we weren’t going to pursue as a party. It’s embarrassing to say you’re going to do one thing and then do another.
“We’ve lost that trust and confidence of the farming sector. This is about the social fabric of the countryside.
“These men and women work incredibly hard. They get up incredibly early, face the wind, the rain, isolation, loneliness. We as a government have to respect that. It’s embedded into what we stood for, what we are as a party.”
Tufnell’s sentiment is shared by 40 of his colleagues who are demanding the Treasury make changes to the controversial tax.
Dubbed the ‘rural growth group’, the MPs want Reeves to exempt older farmers or those who are ill.
This is because the best legal advice for the last thirty years has been to retain the farm until death, meaning thousands of elderly farmers across the UK have retained ownership despite passing down the actual farming to their son or daughter.
But in one bombshell announcement, with zero prior warning and completely contrary to a pre-election pledge, Labour announced inheritance tax would apply to farmers from April 2026.
This has left many elderly farmers terrified they will die within seven years (the required time limit for gifting assets to avoid IHT) and saddle their children with farm-threatening tax bills.
Many of these rural folk have been applying pressure to their MP which, in the case of many rural and semi-rural constituencies, elected a Labour MP for the first time in July 2024.
MAPPED: The rural Labour MPs under most pressure to rebel against Reeves’ farm tax
MAPPED: The rural Labour MPs under most pressure to rebel against Reeves’ farm tax
MAPPED: The rural Labour MPs under most pressure to rebel against Reeves’ farm tax
GBN
Could Starmer be forced to resign?
While Labour MPs breaking ranks to criticise the party is not a good look for the Prime Minister, the situation is very survivable for Keir Starmer, commentators have said.
Starmer’s position is still incredibly strong thanks to his enormous 167 seat majority.
Assuming all eighty MPs rebelled on welfare and were joined by the Tories, Lib Dems, SNP and smaller parties, that would total 245 MPs.
That’s still 79 seats short of Labour’s remaining 324 MPs staying loyal to the government.
Commentators have pointed to the sums as proof that such is the size of Labour’s majority that even if a rebellion of a fifth of the party is launched it will have little effect as the numbers just aren’t there to inflict defeat in a vote.
Naturally, the sums look even less favourable for the ‘rural growth group’ who have just 40 MPs.
And both of these scenarios rely on there being a vote on the farm tax and welfare cuts which is highly unlikely unless an opposition party uses an opposition day to force a vote on the issues.
Commentators have highlighted other ways MPs can apply pressure on Starmer, namely resigning and publicly attacking the PM.
But with no evidence of government ministers wobbling in the Departments for Food, Environment and Rural Affairs and Work and Pensions, MPs are limited to briefing the media and posting on social media.
On the farm tax, a government spokesperson said: “Our commitment to farmers remains steadfast.
“This Government will invest £5 billion into farming over the next two years, the largest budget for sustainable food production in our country’s history. We are going further with reforms to boost profits for farmers by backing British produce and reforming planning rules on farms to support food production.
“Our reform to Agricultural and Business Property Relief 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 people 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.”
On welfare reforms, a Downing Street spokesperson said: “Broken social security system is holding our people and our country back”.
“We’ve got 3 million people out of work for health reasons, one in eight young people not currently in work, education or training, and we’ve got the highest level of working age inactivity due to ill health in western Europe.
“The fact is that the current system is trapping millions of people out of work”, the spokesperson added.
