Weakened Keir Starmer now facing big Labour MP rebellion over family farm tax

Sir Keir Starmer is facing further backbench rebellion as MPs demand he now ditches the hated family farms tax after last week's U-turn on welfare left him politically weakened. The Prime Minister is set for a showdown with more than 40 of his own backbenchers who are considering mounting a challenge to the policy that is risking their re-election hopes in rural seats.

The hike to inheritance tax for landowners and family-run businesses was a key plank of RachelReeves's measures after winning the election to fill a claimed £22billion "black hole" left behind by the Conservatives. However, recent U-turns on both cuts to the winter fuel allowance and Personal Independence Payments have opened the floodgates to Labour MPs pushing for further concessions on other unpopular policies. Ms Reeves's plan will see agricultural assets worth over £1million subject to 20% inheritance tax from April 2026, prompting warnings it will force farmers to sell their land or quit the industry altogether.

One rebel leader said: "It's obviously a Government in crisis and the back benches are feeling ignored. The whole strategy is not working and we've got to change direction."

A new group of Labour MPs, branded the "rural growth group", is pressing the PM to change the existing policy by increasing the threshold at which inheritance tax.

They want the threshold to be increased from £1million to £10million, followed by a 50% discounted inheritance tax rate on farms valued up to £20million and the full levy paid by those estates over this value.

Sam Rushworth, Labour MP for Bishop Auckland, said that while he is keen to avoid trying to amend the legislation himself, he would like to see the Government be proactive and submit their own changes.

Conservative Victoria Atkins MP, the Shadow Environment Secretary, told the Express: "Now that Labour have settled into their new habit of U-turns, they should axe the family farm tax, which is damaging our rural communities and food security.

"Farmers across our country have been trying to get the Government to listen for months. Labour should do the right thing and accept that they got this wrong."

The Countryside Alliance's director of external affairs, Mo Metcalf-Fisher, added: "Rural Labour MPs with a shallow majority know all too well the pain [the family farms tax] is causing. It is the massive elephant in the room. It's an ugly policy that is unpopular with rural voters and the wider public, including Labour's own voters."

"All our sector has ever asked is a chance to be listened to and for the policy to be amended so we can protect the future of family farms before it's too late. If Labour want to be serious about holding the countryside, they will do things for it, not to it, going forward".

The new demands for another U-turn by Keir Starmer came as the weakened Prime Minister claimed he made mistakes over welfare cuts because he had been distracted by foreign affairs.

He insisted he would "carry the can" for the humiliating climbdown and that all decisions "are my decisions and I take ownership of them".

The Prime Minister launched a defence of his Downing Street chief of staff Morgan McSweeney, who has become a lightning rod for MP criticism.

Sir Keir said it was "total b********" to claim Mr McSweeney is controlling the political direction of the Government, insisting they have been "working together for many, many years" and have a "good working relationship".

On Sunday, Cabinet minister Wes Streeting insisted the Government will now win the crunch welfare vote on Tuesday after granting around £3billion-worth of concessions to rebel MPs.

He told Sky News: "I think the changes that were made this week have put us in a much better position, not just on the vote on Tuesday, but on the substance of the package - because as a result of the changes, it means anyone watching this morning who's in receipt of PIP, Personal Independence Payments, now has the peace of mind of knowing that their situation is protected."

However, his former colleague Louise Haigh, who served as Transport Secretary following the General Election, told the BBC that the Prime Minister "cannot continue lurching from crisis to crisis like this every six months".