Farm tax a mistake, Lord Blunkett says in call for Burnham 'rural reset'

An inheritance tax for farms was "a mistake" and Andy Burnham should use his premiership to listen to the countryside more, his longtime mentor Lord Blunkett has said.

The former Labour minister hit out at "Treasury economic orthodoxy" over the 20% tax on inherited agricultural assets worth more than £2.5m that came into force in April, ending a waiver farms had since the 1980s.

He spoke at the launch of a new campaign by the Countryside Alliance for a "rural reset" to reverse what the group says is a current set of policies "treating rural people as the enemy".

The government said it was "determined to rebuild trust" with farmers and that most estates were unaffected by the tax hike.

The tax, announced in last year's Budget under Sir Keir Starmer at half the 40% rate of standard inheritance tax, was initially proposed for inherited agricultural assets worth more than £1m.

A backlash led to it being watered down in December - to a raised threshold of £2.5m.

Some rural campaigners say this still impacts ordinary working family farms and are calling for it to be scrapped.

Burnham has not hinted any change or U-turn on the issue, but Lord Blunkett said he was confident the now-prime minister, who he hired as his parliamentary private secretary back in 2004, would get the message "very clearly and act accordingly".

"I think the family tax, the family farm imposition, was a mistake," the former Labour minister said, adding it "touched a nerve".

"It's very strange because we've never won so many rural seats since 1945 - around 135 Labour MPs are either rural or semi-rural - and their voices need to be heard much more clearly," he told the BBC.

"If you're an urban dweller all your life and you've got Treasury economic orthodoxy in your soul, you won't understand that family farms are only family because they are passed down from one generation to another."

He said the countryside fits neatly into Burnham's self-professed focus on local postcodes and urban and rural areas "need each other".

Lord Blunkett also branded the government's planned ban on trail hunting a mistake, saying the practice was "doing no harm".

Trail hunting was introduced after the Hunting Act 2004 as an alternative to hounds chasing foxes and involves using an animal-scented rag. Labour first announced a planned ban in its 2024 election manifesto.