Rachel Reeves is set to betray farmers AGAIN 'by cutting a massive £5billion lifeline'
Thousands of family farms could go bust thanks to a new raid being plotted by Labour, it emerged last night.
In a fresh blow to the industry, Chancellor Rachel Reeves is considering slashing lifeline subsidies worth billions of pounds to farms in her spending review on June 11.
She is scrabbling to find up to £30billion after leaving herself with little fiscal headroom in last October's Budget and following Labour's U-turn over winter fuel payment cuts.
But critics said axing the environmental land management (ELM) fund will be the 'final blow' for many farms.
The fund, which is worth around £2.5billion a year, was part of a scheme set up after Brexit to replace around £2.6billion farmers received annually from the EU's common agricultural policy.
The Government is committed to settling subsidies worth £5billion for the period between last year and next year. But after that only 'small farms' will continue to receive funds, according to Whitehall sources.
It is unclear what this means, how funding will be allocated and on what basis.
The ELM scheme gives subsidies to farmers in return for cultivating their land in nature-friendly ways.
It is based on the principle of 'public money for public good'. Pre-Brexit, EU subsidies were linked to food production.
However, the National Farmers' Union (NFU) said many food producing farms also cultivate parts of their land in line with the ELM scheme to receive the subsidies and boost their income. It said around 40,000 farms receive ELM subsidies.
Ministers were already facing accusations of betrayal after introducing the hated 'family farm tax' – which will lumber many farms with huge inheritance tax bills – in the Budget, sparking a series of protests by farmers.
In March, the Government closed part of the ELM, the sustainable farming incentive. Defending the ELM yesterday, Andrew Clark, the NFU's policy director, said: 'There is a significant risk that thousands of family farm businesses would be at risk if this scheme were axed.
'What farmers and growers really need from this government is confidence and certainty that what they do for this country is valued. It doesn't feel like that at all at the moment.'
Liberal Democrat MP Alistair Carmichael, chairman of the Commons environment, food and rural affairs committee, said that slashing the ELM 'will be the final blow for many farms'.
He added: 'Since Labour came to power, they have had basic payments ended earlier than planned, they have seen the shambles of the sustainable farming incentive closed without notice – all on top of the family farm tax and other tax changes – and trade deals that could be devastating for some farming sectors. No matter where farmers turn, there is a Government minister waiting to clobber them.
'Keir Starmer says that food security is national security, but if he treated our security services like he treats our farmers we would all be learning Russian or Chinese.'
He added: 'If our farmers are not able to put food on our tables then we shall end up importing it from other countries. Is that what the Government wants?'
Former chairman of the committee, Sir Robert Goodwill, who runs a farm, said: 'For many farms their profit line is less than the support they get, so it will push many farms below into the red. Potentially thousands.
'It's very serious indeed, particularly for tenants who have to pay rent.
'My guess is, Labour has decided that not a single farmer will vote Labour at the next election now, so why not just sacrifice the industry.'
Victoria Atkins, the Conservatives' environment spokesman, said: 'Labour's lack of understanding about our rural communities is putting our nation's food security at risk.'
NFU president Tom Bradshaw said: 'If this story proves correct, it will be another blow not just for farmers and growers but also for the viability of nature-friendly farming and for the environment.'
Sources at the Department for Environment, Food and Rural Affairs (Defra) confirmed that ELM was facing the axe. Defra itself did not respond last night.
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