Thousands of farms have been forced to close down after Rachel Reeves's inheritance tax raid, data from the Office for National Statistics (ONS) has revealed.

Over the past year a total of 6,365 agriculture, forestry and fishing businesses have shut.

It was the highest since quarterly data was first established in 2017 with most of the closures taking place during the first six months after Reeves' announcement in October.

The Chancellor declared that Labour would cut the amount of inheritance tax relief available to family farms.

Only 3,190 businesses in the sector were set up over the same period, leaving a net loss of 3,175.

The Telegraph reported that it showed the number of farms was shrinking rapidly at the fastest pace on record.

Shadow Environment Secretary Victoria Atkins said the closures were a result of "Labour's disastrous tax policies".

"The crippling NICs [National Insurance contributions] increases, alongside the family farm and family firm taxes, are destroying generational businesses, creating job instability and even leading to devastating suicides," she said.

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Farms are shrinking at the fastest pace on record

“These statistics prove that Labour do not understand our rural communities and our rural communities cannot afford Labour.”

Reform UK MP Lee Anderson said the taxes and red tape were "pushing British farming to the brink".

"“No government in modern history has done more damage to rural Britain than Labour is right now,” he said.

“Farms are closing at twice the rate new ones are opening."

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Chancellor Rachel Reeves

Anderson said it was "completely unsustainable" and Labour had "betrayed the industry that helped build this country".

It comes as farmers are also battling with the soaring price of fertiliser and a poor harvest after both droughts and floods over the last year.

Third-generation farmer, James Grindal, 55, said the poor weather and costs meant new farmers and entrepreneurs were reluctant to establish new businesses.

"Yields are quite a bit down this year, it has been so dry," Grindal said.

"We have not had decent rain for four or five months."

The farmer added that people were "beaten from post to pillar", saying that "whichever way you turn you seem unwanted".

Grindal said the government was not "over-supportive of us, with inheritance tax relief disappearing".

His 84-year-old father still worked on the farm, remaining part-owner.

But, Reeves' tax raid meant when his father died, the family would be unable to invest in the farm as previously planned.

Grindal said the father was still actively involved in the farm and "why shouldn't he own a bit of the land he has worked hard to own?"

"Out of nowhere (this tax was) dropped on us," he added.

"When he passes away we are going to have to pay a fair bit of tax on that. It will probably stop us from doing some of what we are doing."