THE new Labour government's recently-announced budget will “decimate” farming communities in Ayrshire and across Scotland, according to a "dismayed" local MSP.

Chancellor Rachel Reeves announced a reform on inheritance taxes applied to farms during Wednesday’s budget announcement.

She said from April 2026, the first £1 million of combined business and agricultural assets will continue to attract no inheritance tax.

But for assets over £1m, inheritance tax will apply with 50 per cent relief, at an effective rate of 20 per cent.

Currently, farmers receive 100 per cent relief on inheritance tax when passing their businesses to the next generation.

SNP MSP Elena Whitham, who represents the large rural constituency of Carrick, Cumnock, and Doon Valley, has added her voice to farmers and prominent figures such as Jeremy Clarkson and Kirstie Allsopp who have expressed anger at the reforms.

The National Farmers Union has said the policy will be disastrous as it will make it difficult for small farm owners to pass their business to their children.

Victoria Vyvyan, the president of the Country Land and Business Association, said 70,000 farms could be affected across the UK.

Ms Whitham has said the move will threaten food security and Ayrshire’s rural way of life as larger businesses will have the ability to take over smaller plots of land and could lead to the introduction of factory farming.

Speaking about the move, the "dismayed" politician said: “This could decimate our farming communities across Ayrshire, Scotland, and the UK as owners of smaller farms will need to think twice about passing their business to their children.

“Farmers are already dealing with unprecedented challenges. Rather than penalising them further, we should be supporting their efforts to provide sustainable, local produce and keep family farms thriving.

"Without them our food security will be put at risk and Ayrshire’s rural way of life and heritage will cease to exist."

Ms Whitham on a visit to Mossgiel Organic Farm in 2022.Ms Whitham on a visit to Mossgiel Organic Farm in 2022. (Image: Elena Whitham MSP) Ms Whitham added: "The last thing we want is large corporations taking advantage of this and introducing factory farming to our area.

“The UK Government must listen to the voices of farmers and organisations such as the NFU which is warning of the dangers of implementing this policy.

“Coming from a rural background myself and having visited many farmers across my constituency, I am passionate about supporting our agricultural sector.

"I am always willing to work with anyone to see improvements for our farming communities. I strongly urge the Chancellor to reverse this move.”

🥀Yesterday's Labour budget delivered a blow to farmers in Ayrshire and across Scotland with the announcement that...

Posted by Elena Whitham MSP on Thursday 31 October 2024

During business and trade questions at the House of Commons, business minister Sarah Jones said: “I spent quite a lot of yesterday talking to businesses, having meetings with businesses about the budget and its implications, and we talked about the potential for growth, we talked about the long-term stability and changes that we are making on this side of the House, unlike the previous government.”

Commons leader Lucy Powell added: “This government is incredibly committed to our farming community, to our rural communities, to ensuring food security.”