Labour’s new Secretary of State for the Environment, Food and Rural Affairs Steve Reed has promised the work of change has now begun. His priorities are to clean up rivers, lakes, and seas; create a roadmap to move towards zero waste; boost food security; and ensure nature’s recovery and protect communities from the dangers of flooding.
We caught up with our Head of Agribusiness, David Kinnersley to learn more about the implications for farmers following Labour’s landslide victory in the General Election.
After 14 years in opposition, the energy from the new Government is plain to see and while there don’t seem to be any big changes in the agricultural policy, there are possibly trade deals and food security issues that might lead to positive news in future months.
It is very, very early days for Labour but the key elements of their priorities are unlikely to produce immediate change for farmers going about their day-to-day business. Businesses in all sectors crave stability since it reassures them, particularly in terms of planning and having the confidence to invest whether that is in new machinery or taking on new staff.
There was no mention of farming in the first King’s Speech, but we hope the new Environmental Land Management (ELM) scheme which provides “public goods for public payments” and gives financial assistance for implementing environmentally friendlier practices by farmers will continue.
Since its full launch, this year by the Conservatives it has proved popular so far, and it has had good cross-party support. There doesn’t seem to be any signs from Labour that they will abolish the scheme or change it radically but clear communication about their intentions would be beneficial for the rural industry.
Our clients at Fisher German have responded positively to it and hopefully, it will continue in the same vein to give consistency in policy direction to the rural sector in terms of payments for farming businesses which are under financial pressure at the moment. The key questions which have not yet been answered are therefore centred on the budget for the schemes because Labour didn’t include any farm funding plans in its manifesto.
Chancellor Rachel Reeves has said that the economy has not grown as fast as it should have done in recent years. Whether Labour will increase the UK’s current budget to invest in the future of farming remains to be seen, but we think that’s looking quite unlikely.
Another factor for farmers to retain consistency would be around Bovine TB since Labour’s manifesto had planned to introduce potential restrictions which is likely to frustrate the industry given the previous policy was largely successful. If this manifesto commitment is sidelined, it would be a relief to farmers.
Not surprisingly since Labour has been in opposition for so long, they are keen to make an impact as soon as possible to prove they are making a difference.
One area where this could happen is with trade deals. Freer trade is important for the agricultural and horticulture sectors with the restrictions having adverse impacts on high-value exports such as high-health pigs, breeding cattle and relatively simple requirements such as plant matter for sap samples in European labs. While this may be politically challenging if Labour could agree on improvements to the trade arrangements, then it would have a positive impact on the agricultural food sector.
Labour has received criticism for their 87-word mention of farming in their manifesto so it is going to be interesting to watch how the party gets to grip with the sector, particularly in its first 12 months, to assist agriculture and how it affects our clients especially when the new Government has other priorities such as the NHS, social care and defence spending. How much is going to be left to tackle other matters such as food inflation?
The previous Government confirmed they were going to extend the Agricultural Property Relief – a relief from Inheritance Tax on the transfer of agricultural property – to include industrial schemes but this was never confirmed in legislation, so it would be great if this could now happen.
Food security is an interesting area because talking to people within the industry, the global uncertainty around the actions of China and Russia is beginning to get through to politicians. It may result in policies being tightened around importing food from these countries, rather than paying lip service to it.
Historically, Labour in Government has been relatively good for farmers so it will be interesting to see if that traditional perception becomes a reality to help rural businesses overcome the challenges they are currently facing.
Environment Secretary Steve Reed has pledged that farming is an “absolute priority” for the Government -- the rural industry is waiting to find out more so that they can face the future with more confidence.
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