Farmers are ‘bewildered and frightened’ about the future because of Labour’s family farm tax, a report reveals.

A long-awaited review of the industry found that farmers considered changes to inheritance tax (IHT) to be the ‘single biggest issue’ they faced.

But its author – the former National Farmers’ Union president Baroness [Minette] Batters – was blocked from investigating the tax and its expected effect. ‘Nearly all the responses to this review have cited inheritance tax as the single biggest issue regarding farming viability that they face,’ she said.

‘The farming sector is bewildered and frightened of what might lie ahead.’

The changes were causing ‘significant ongoing concerns’ to farmers, she added, with some ‘questioning viability, let alone profitability.’ Despite this, ‘it has been made clear in my terms of reference that is not for me to offer proposals to the Government on IHT’.

Her comments will pile pressure on Sir Keir Starmer to reconsider the tax which some farmers fear could ruin them.

They are furious after Labour announced, in the Budget last year, plans to subject their assets to inheritance tax for the first time. Chancellor Rachel Reeves said she would levy a 20 per cent inheritance tax on farmers’ assets worth more than £1million from next April.

It came after the PM suggested to MPs last week that he was aware of reports that terminally ill farmers were considering suicide before the tax comes in.

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Chancellor Rachel Reeves. Farmers are ‘bewildered and frightened’ about the future because of the Chancellor’s family farm tax, a report reveals

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Farmers protesters in Whitehall ahead of the Budget in November. A long-awaited review of the industry found that farmers considered changes to inheritance tax (IHT) to be the ‘single biggest issue’ they faced

Asked whether he agreed that nobody should feel they would be ‘better off dying’, he said: ‘No, of course. But governments have to bring about sensible reform.’

Asked about farmers’ fears yesterday, Ms Reeves said she ‘welcomed’ the report and said the tax was necessary to fund the NHS.

In her review of the profitability of the farming sector, Lady Batters called for a ‘new deal for profitable farming’ that recognises the true cost of producing food and delivering for the environment.

She also voiced concerns about the post-Brexit plan for agricultural payments and suggested that the Government had significantly underestimated the value of Britain’s farming sector.

Agriculture is valued at just 0.6 per cent of the country’s GDP. However, Lady Batters said this excluded the impact of food processing. If this were included, the farming sector would be worth as much as 80 per cent more, she said.

Conservative environment spokesman Victoria Atkins said: ‘Baroness Batters admits that the farming sector is “bewildered and frightened of what might lie ahead” because of the vindictive Family Farm and Family Business Taxes.

‘No wonder that the Government have buried this report until after their disastrous Benefits Street Budget, and sneaked it out on the last day of term.’

Liberal Democrat environment spokesman Tim Farron said: ‘This devastating review must be the final nail in the coffin for the hated family farm tax.’

NFU president Tom Bradshaw backed the Department for Environment, Food and Rural Affairs’ priorities for delivering on the review, but also raised concerns about the ‘pernicious’ tax.

Country Land and Business Association president Gavin Lane said: ‘Many farm businesses are marginal or loss-making, yet will soon be hit with unaffordable inheritance tax bills, which in many cases will dwarf their annual profit.’