Labour’s “cruel farm tax” will have a “disastrous” impact on thousands of family-run rural businesses, the Chancellor has been warned.

Rachel Reeves is being urged to reverse her decision to scrap a vital tax lifeline for family-run farms after it was roundly condemned by cross-party MPs and the National Farmers’ Union (NFU).

Shadow Environment Steve Barclay said Labour was “tearing through rural communities” in a “move that is as callous as it is foolhardy”.

Writing in the Daily Express today, the former Brexit Secretary said: “Farmers who toil their entire lives to build and maintain a farm and dream of passing it on to the next generation have seen that dream shattered.”

It comes after farming hero Jeremy Clarkson warned farmers had been “shafted” in Ms Reeves’s historic Budget. He said: “Farmers, I know that you have been shafted. But please don’t despair. Just look after yourselves for five short years and this shower will be gone.”

Farms worth more than £1million will no longer be exempt from paying inheritance tax when passing on landholdings to family members under new plans announced in the Budget.

They were previously given a tax break under Agricultural Property Relief (APR) – a policy specifically designed to protect family-run farms by reducing the tax burden on them so they do not have to sell their main income source to pay the bill.

But farmers have pointed out that a site worth £1million is considered small when land and property prices are taken into account – meaning the policy change could have wide-reaching impacts.

And now, the Conservatives have launched a new petition at www.stopthefarmtax.com calling on the Labour Government to scrap the “Family Farm Tax”. They described Ms Reeves’s plans as a “huge assault on the family farm that will have a “significant impact on the entire of the UK’s agricultural sector”.

Mr Barclay said: “Labour’s introduction of the Family Farm Tax marks a shameful betrayal of British farmers everywhere. It will harm rural communities, risk our food security, and make it harder to pass farms to the next generation.

“Farmers toil, day and night, to put food on our tables, and foster our countryside – so I am proud to launch this petition, to fight for our farmers, and call on Labour to ditch this cruel tax.”

Farmers are now also planning a huge protest on Tuesday 19 November in response to the measures, with people from across the UK set to descend on London.

The NFU is organising the rally which will take place at Church House conference centre in Westminster, central London, which will be able to accommodate about 600 farmers. But many more are expected to converge on the capital.

NFU President Tom Bradshaw said: “It’s clear the Government does not understand that family farms are not only small farms, and that just because a farm is an asset it doesn’t mean those who work it are wealthy.

“I have said, every penny the chancellor saves from this will come directly from the next generation having to break up their family farm. It simply mustn’t happen.”

He added in a previous statement: “It has been a disastrous Budget for family farmers and especially tenant farmers. The shameless breaking of clear promises on Agricultural Property Relief will snatch away the next generation’s ability to carry on producing British food, plan for the future and shepherd the environment.”

Mr Bradshaw went on to claim that it was clear the Government did not “understand, or perhaps care, that family farms are not only small farms, and that just because a farm is a valuable asset, it does not mean those who work it are wealthy”.

He added: “This is one of the number one measures in the Budget which makes it harder for farmers to stay in business.“Before the election, Keir Starmer promised to establish a new relationship with farming and the countryside. Well, he’s certainly done that.”

Jerome Mayhew, the Tory MP for Broadland and Fakenham said: “This Government has shown how little its word is worth. Labour promised not to touch APR – yet the Chancellor did the exact opposite. They broke their promise to farmers and left family farmers of all sizes at risk of a mammoth inheritance tax bill.

“For family farmers that survive this tax raid, they will face further challenges.The Government’s trailed cut to the nature-friendly farming budget next year would put yet another nail in the coffin of farm finances and nature will pay the price.”

Former Lib Dem leader Tim Farron agreed with the NFU President’s fears for tenant farmers but warned his party would “strongly fight” against what he described as Labour’s “disgraceful act”.

And Rupert Lowe, the Reform UK MP for Great Yarmouth, a farmer by trade, is now calling for Labour to U-turn on the policy change. He said: “I’m calling on Labour to do the right thing and reverse their assault on British farming through cruelly limiting inheritance tax relief. Farms that have been in families for generations will be snatched away, directly because of this vile Budget. The decision must be reversed.”

Shadow Business Secretary Kevin Hollinrake said Labour MPs may get a negative reaction from pub owners and farmers this weekend after the Budget. He said: “If Labour members were thinking of going back to their seats this weekend for a pint in the local pub and a chat with local farmers, I think I would think again.

“Families with a typical farm will have to fund hundreds of thousands of pounds or see their farms broken up and sold. The Environment Secretary said ten minutes ago they had no intentions of putting death taxes on businesses. That was a broken promise wasn’t it?”

Tory George Freeman MP said: “Family farming is under attack from this Government. The changes to APR will make it harder for family farmers of all sizes to pass on their proud agricultural tradition to the next generation.”

Rebecca Pow, former Parliamentary Under Secretary of State at the Department for Environment, Food and Rural Affairs (Defra) said: “This was a very disappointing budget for nature and the environment – there was no commitment to the vital long-term protections of the nature-friendly farming budget which are essential to restoring our depleted natural world.

“And drastic changes to Agricultural Property Relief could harm 70,000 farms especially small family farms, many of which are tenanted. This backbone of the rural community is essential for our food security, and conservation of our land. Nature could now be in jeopardy and food costs could rise – this is a regrettable backward step.”

Patrick Spencer MP said: “If Labour is serious about its pledges to protect the environment, farmers, and food security, it cannot go ahead with these changes to APR. Farmers are the custodians of our countryside and their relationship with our land, unlike the Chancellor’s own economic whims, spans generations, not just news cycles.

“Cutting the nature-friendly farming budget next year, as implied in this Budget, would be a fool’s errand for a government supposedly wanting to fight climate change, protect nature, and support British farmers.

“In her misguided attempt to ‘tax the rich’, she risks delivering a major blow to Britain’s proud family farming tradition and the UK’s environmental ambitions.”

Labour has pointed out the farming budget will be £2.4billion in 2025/26. A source said: “This will include the largest-ever budget directed at sustainable food production and nature’s recovery in our country’s history: £1.8billion for environmental land management schemes to boost Britain’s food security and accelerate the transition to a more resilient and sustainable farming sector.

“We are prioritising directing investment to environmental land management schemes, which will boost nature and sustainable food production. Environmental Land Management schemes will remain at the centre of our offer for farmers.”

The Labour source added: “A further £70million in 2025-26 will be allocated to support nature’s recovery while delivering much-needed infrastructure and housing. This includes £14million to establish a new model for developer contributions to strategically address the environmental impact of development, and £13million to expand Protected Sites Strategies in priority areas.

“In a challenging economic context, we will also look to other, innovative ways to deliver for nature. This includes through regulation and building on the UK’s leadership in green finance to mobilise private capital and grow nature markets.“We are clear that delivering our environmental targets, alongside net zero, underpins sustainable, economic growth.”

Defra and the Treasury were contacted for comment.