Reed apologises to farmers over decisions ‘we had to take’ to fix finances
The Environment Secretary set out reforms to boost profitability in the farming sector as the Government stands firm on agriculture property relief.
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Your support makes all the difference.Environment Secretary Steve Reed has apologised to farmers over decisions the Government “had to take” to fix the public finances as it stands firm on contentious changes to inheritance tax.
In a speech to the Oxford Farming Conference on Thursday, the Environment Secretary set out reforms to boost profitability in the farming sector by backing British produce and ensuring fair supply chains in a bid to reset relations with the sector.
Mr Reed said that while the primary purpose of farming is food production, farmers must be supported to restore nature and diversify their incomes to achieve long-term food security.
But anger over measures in last year’s Budget, including introducing inheritance tax on farm businesses worth more than £1 million, overshadowed the announcement.
Farmers lined the streets in tractors and honked their horns outside while Mr Reed was repeatedly quizzed over inheritance tax changes as he answered questions inside.
The Environment Secretary acknowledged the decision on agricultural property relief was “very unwelcome” but argued that farmers’ anger is “not just about one tax issue”.
“What I’m hearing from so many is that the turmoil of recent years has made farming incredibly tough,” he said, before pointing to rising input costs, tight margins, unfair supply chains, a shortage of skilled workers, growing concerns about extreme weather, and issues with access to European markets as well as with post-Brexit trade deals.
Mr Reed also repeated Labour’s claims of a £22 billion black hole in the nation’s finances left by the last government, saying: “We were shocked by the size of the financial black hole we were left to fill.
“I’m sorry that some of the action we had to take shocked you in turn, but stable finances are the foundation of the economic growth needed.”
Later asked by reporters to expand on what action he was apologising for, he said: “We didn’t know the size of the financial black hole because the previous Government covered it up so we couldn’t have known.
“So I’m sorry that we then had to take decisions that are very difficult for the sector because of what we inherited.”
Challenged over whether the Budget changes could be the final straw for many struggling farmers, he said: “No I don’t accept that. I know that’s how people feel and I recognise that’s how they feel.”
He argued that farms were already going bust under the previous government and this had “nothing to do with inheritance tax” but rather farming became unprofitable, an issue which he said the Government aims to tackle through the new measures.
Reacting to the measures announced on Thursday, National Farmers’ Union president Tom Bradshaw described Mr Reed’s address as a “peacetime” speech.
“I think if it was in peacetime you could look at the speech and say, ‘Yes there are elements we can build on in the future’,” he said.
“We all want farming to be profitable but the very fact that we then go on to talk about diversification suggests they’re missing the point that food production itself needs to be profitable.”
Mr Bradshaw warned that the new policies would have no immediate impact on farmers currently struggling, or food production, which he said is already on a “knife’s edge”.
“The farming industry has nothing left to give, it’s been bled dry and we need to see recognition that rebuilding the confidence needs to start today not in five years’ time” he said.
Speaking about the inheritance tax anger, he argued that changing the policy is outside Mr Reed’s control and must be dealt with by Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves.
Mr Bradshaw warned of more protests to come as he called for them both to “rapidly recognise that this situation could spiral and they should really sit down at the table”.
Other stakeholder groups also criticised the Government, with Victoria Vyvyan, president of the Country Land and Business Association (CLA) saying farm businesses faced having profits “wiped out” by inheritance tax bills.
She added that the Government’s freezing of the farming budget and its lack of ambition for the rural economy is also “hitting confidence” before urging the Government to invest in productivity, strike new trade deals and defend farms from drought and flood.
Addressing Mr Reed’s focus on food production as the purpose of farming, Barnaby Coupe, senior land manager at the Wildlife Trusts, said restoring nature is “critical” to ensure long-term food security.
“The UK Government must not lose sight of the fact that supporting farmers to bring back nature goes hand in hand with growing food,” he said.
Shadow environment secretary Victoria Atkins said: “So far, all Labour has done for farmers is introduce the vindictive family farm tax that threatens to destroy family farming as we know it; hike national insurance that will slash jobs and rural businesses; remove the capital grants that farmers rely on to grow their businesses; and speed up cuts to farming payments.
“The only guarantee Labour offers to farmers is that they’re coming after you and your way of life.”