Labour peer says Keir Starmer's inheritance tax raid on family farms 'smells of incompetence' and is hammering the party's rural support as ministers brace for London protest

Keir Starmer 's inheritance tax raid on farmers 'smells of incompetence' and is hammering the party's support in rural areas, a Labour peer has warned.

Baroness Mallalieu, who is also president of the Countryside Alliance and a part-time farmer in Somerset, likened the row to Tony Blair 's decision to ban fox hunting, which she also opposed.

The barrister, 78, lashed out at the decision to make wealthy farmers pay IHT on the agricultural value of their land for the first time - albeit at a discounted rate.

Ahead of a major protest by farmers planned for Westminster tomorrow the peer told the BBC 's Westminster Hour that 'the majority of the Cabinet' had become 'urban'.

She added that while many of them 'may have a cottage' they did not interact with people who live in the countryside.

'On the train to Taunton the other day I've had people saying to me, and indeed one of my own relatives, ''I wish I hadn't done it, I wish I hadn't voted Labour''.

'And that is very disheartening... when Labour made what was perceived as an attack on the countryside 20 years ago (the hunting ban) ... the result of that was 14 years in opposition. We went down from 100 MPs in rural areas under Blair to just 17. We're now back to 100, and there we are, once again, making the same mistake.'

Farmers have reacted with anger and dismay over the inheritance tax changes for farming businesses, which limit the 100 per cent relief for farms to only the first £1million of combined agricultural and business property.

For anything above that, landowners will pay a 20 per cent tax rate, rather than the standard 40 per cent rate of inheritance tax (IHT) applied to other land and property.

Rural Labour MPs have suggested the level of anger is lower than claimed. Several told MailOnline that all the farmers who contacted them about the change had subsequently discovered they were not liable to pay IHT.

Treasury data shows that around three-quarters of farmers will pay nothing in inheritance tax as a result of the controversial changes.

However, others have challenged the figures, pointing instead to data from the Department for Environment, Food and Rural Affairs which suggests 66 per cent of farm businesses are worth more than the £1 million threshold at which inheritance tax will now need to be paid.

Labour faced protests against the change when the Welsh party had its conference at the weekend.

Speaking to reporters on the way to the G20 summit in Brazil, Sir Keir said 'it is very important that we support farmers' but added: 'Obviously, there's an issue around inheritance tax and I do understand the concern.

'But for a typical case, which is parents with a farm they want to pass on to one of their children, by the time you've taken into account not only the exemption for the farm property itself, but also the exemption for spouse to spouse, then parent to child, it's £3 million before any inheritance tax will be payable.

'That's why I am absolutely confident the vast majority of farms and farmers will not be affected by this.'

However, Baroness Mallalieu told the BBC: 'There was no impact assessment done. The figures differ between the Treasury and Defra, and certainly differ from those of the NFU.

'But I hope what they will do is look at it very carefully, and just see what the unintended consequences were. If they wanted to deal with people who buy farmland not intending to farm themselves but to avoid tax, then fair enough to bring them within the tax threshold.

'But what they've done is to bring in a lot of people who they never really contemplated or thought of as being involved. And it's really small farms. I think they have no idea of the value of farmland... I live in an area where there are a large number of small family livestock farms. And they have been hammered... what can they do, they feel powerless.'