Labour MPs urged to choose between both Government and constituents

AS the Finance Bill approaches its 3rd Reading in Parliament in early 2026, farmers and family business owners across the North are facing an unprecedented crisis that threatens to destroy generations of rural enterprise and community investment.

The proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), announced in the Autumn Budget, will impose inheritance tax on family farms and rural businesses valued over £1 million from April 2026.

While Government ministers claim only the wealthiest will be affected, analysis by the Country Land and Business Association shows that a typical 200 acre arable farm making a profit of:- £27,300 would face an inheritance tax liability of:- £435,000; requiring 159% of annual profits each year if spread over 10 years.

The CLA's analysis suggests that many farms could be forced to sell up to 20% of their land just to meet the tax bill, which would:-

• Devastate investment in the rural economy, with uncertainty already stalling essential infrastructure projects.
  
  

• Undermine food security by reducing productive farmland.
  
  

• Destroy the long-term planning essential for environmental improvements and regenerative farming practices.
  
  

• Break up family businesses that have sustained local communities for generations.

Gavin Lane, CLA President, said:- "Farmers and family business owners have planned for decades on a simple promise: build a viable business and you can pass it onto  your children. This policy turns that promise into a tax trap. For many, the only way out is to sell land or break up the firm. It goes against a sense of fairness to have the rug pulled from beneath them. Labour MPs representing rural seats know that this policy is a disaster, and polling shows the public can see it too. Markus Campbell Savours voted against these changes because Labour promised at the election it would not put inheritance tax on family businesses. He has refused to break that promise, and he has earned enormous respect. As the Bill progresses in the new year, we will work with all Labour MPs who are prepared to put their constituents, and economic stability, above party loyalty."

CLA Director North Harriet Ranson warns:- "Ministers say they're targeting people who buy farmland as a tax shelter, but whether through ideology, inexperience or a fundamental misunderstanding of how family businesses work, it is treating multigenerational businesses as a problem to be solved rather than the bedrock of long term investment and ignoring the well known human cost entirely."

Beyond the stark economics, the human impact on farming families has been severe. Business owners report that every family conversation now centres on death and tax, with the grieving process beginning while parents are still alive. The psychological toll of knowing that decades of stewardship, skills and investment could be taxed out of existence is pushing families to breaking point.

CLA Director North Harriet Ranson said:- "Many Labour MPs were elected on their promise that the countryside was safe in their hands. They fought hard for rural seats, building trust with farming communities and rural business owners. But before they could deliver on those promises, the Government announced these changes with no consultation. Now MPs face a stark choice: will they stand with the Government that has undermined their election pledges, or will they stand with their constituents; the family businesses that have kept local economies going for generations?"

The Country Land and Business Association is urging local residents, farmers, and rural business owners to:-

• Write to your MP immediately - Let them know how these changes will affect your family, your business, and your community.
  

• Invite your MP to visit - Show them the reality of family farming and rural business operations.
  

• Share your story - Help MPs understand the human cost, not just the statistics.

For more information about the inheritance tax changes and how to contact your MP, visit:- CLA.Org.UK  

THE Local Government Association which represents local Councils released a statement about the:- 'Local Government Finance Settlement.' If you are unaware of what this settlement is, it is the annual process by which the UK's Central Government (specifically for England) determines how much money Local Councils within England will receive to fund services like:- social care, waste collection, and planning. The most recent announcement (December 2025) is particularly significant because it moves away from a 1 year emergency:- "fixes" toward a long term strategy. Liverpool City Region (LCR) is significantly affected; largely in a positive way due to its status as a high-deprivation area and a:- "Mayoral Strategic Authority." Under the new December 2025 settlement, Liverpool and its surrounding boroughs are positioned as:- "winners" in the redistribution of funds.

Cllr Louise Gittins, Chair of the Local Government Association,, said:- "It is good that Government has acted on LGA calls to provide multi year financial certainty to Councils and a streamlined funding system. While funding levels have risen over the last few years, budget setting will be another hugely challenging task for many Councils again next year. An increase in overall funding remains needed to ensure the financial sustainability of Councils and our local services. All Councils need to be protected from real terms cuts next year and have adequate funding to fully meet spiralling cost and demand pressures. Alongside a significant boost in resources, it is critical that Government works with Councils to reform key services, such as:- 'SEND' and adult social care, and undertakes a cross-party review of options to improve the wider local Government finance system. We remain concerned by the number of Councils having to use unsustainable emergency bailouts which are a clear warning sign about the financial pressures facing local Government. Unless sustainable solutions are found to the severe financial challenges facing local Government, we anticipate more Councils may need Exceptional Financial Support (EFS) in the future."

So how will it affect the Liverpool City Region? There is a £13 billion package shared across the UK's major mayoral Regions. That means as the Liverpool City Region is 1 of the few areas receiving a new:- "Integrated Settlement" from 2026, it will give the Region guaranteed funding for:- adult skills, local growth, and brownfield housing through to 2029. This also means the Mayor (Steve Rotheram) and the Combined Authority having to bid for dozens of small pots of money for things like:- transport or housing, they are being given a single, large block of flexible funding. Because the new formula (Fair Funding 2.0) places a much higher weighting on deprivation and social care demand, Liverpool City Council and the other 5 boroughs:- Sefton, Knowsley, St Helens, Wirral, and Halton, who are now expected to see real terms funding increases. That means areas with high levels of child poverty and adult social care needs; such as:- Knowsley and Liverpool, who are the primary targets for the redistributed grants that were previously held by wealthier Southern Councils. It will also allow for a new formula for homelessness funding which will likely benefit the City Region, which has seen rising pressure on temporary housing.

The Government has also extended the 100% Business Rates Retention pilot for Liverpool City Region until 2029. This means the Region keeps more of the tax growth from local businesses rather than sending it back to Whitehall. To add to the list, because Liverpool benefited from the 1 off:- "Recovery Grant" in 2025, the new rules will now allow it to keep that funding as a permanent:- "floor" for the next 3 years, ensuring no sudden drop in service budgets.

So what is the catch? The Government calculates a Council's:- "Core Spending Power" based on the assumption that every Council will raise Council Tax by the maximum 4.99% every year. Yet, many households are already struggling with the cost of living, and this 4.99% annual rise is a significant financial hit to residents. If a Council like:- Liverpool or Knowsley decides not to raise taxes to protect its residents, the Government does not provide extra cash to fill the gap. The Council simply ends up with less money than the Government says they:- "should" have, leading to potential service cuts. The Government's new funding model effectively asks local residents to pay more for services that were previously covered by central grants.

Liverpool has seen a massive surge in homelessness. While there is a new funding formula for this, it often fails to cover the full commercial cost of hotels and emergency housing used when social housing is unavailable. Plus, the increase in the National Living Wage and National Insurance for employers (confirmed in the 2025 Budget) means that the cost for Councils to hire care workers and contract private care homes has skyrocketed. Much of the:- "new" money is immediately swallowed up just to stand still. The new settlement also includes a:- "Business Rates Reset." This means the Government effectively:- "zeroes the clock" on the growth the Region has achieved over the last few years, redistributing some of that:- "local" profit back into the national pot to help other Councils. This can feel like a:- "tax on success" for the Region's economic development.