Why Steve Reed will need more than a ‘new deal’ to get farmers back onside

“Change is coming,” proclaimed environment secretary Steve Reed at today’s Oxford Farming Conference.

But if protesting farmers outside the farming sector’s first major gathering of the year were hoping to see a change in the government’s much-hated Inheritance Tax reforms, they will have been sorely disappointed.

NFU president Tom Bradshaw had used an appearance on this morning’s Radio 4 Today Programme to push for at least a consultation on the “draconian” and “unacceptable” changes to IHT liabilities to agriculture (APR) and business property reliefs (BPR).

But as Reed set out his stall for a ‘New Deal for Farmers’ at the conference, there was no change from the line the government has been so doggedly following on the so-called ‘Family Farm Tax’ since Chancellor Rachel Reeves’ budget announcement on 30 October.

Reed’s ‘new deal for farmers’

In a nod to the criticism that has come its way and the line trotted out by a series of government ministers ever since that controversial budget, Reed told delegates “you’ve heard it before, but the £22bn black hole left by the Conservatives was bigger than anybody could have expected”.

That had necessitated the “immediate tough decisions” now crippling many food businesses, “including on APR” he added, alongside National Insurance hikes and the phasing down of BPS farm subsidies.

“We were shocked by the size of the black hole we were left to fill. I’m sorry if some of the action we took shocked you in return,” Reed said, in as close to an apology as we’ve heard since the policy change.

“But stable finances are the foundation of the economic growth needed to get the economy growing again after it flatlined through a decade of chaos,” he insisted.

The Q&A that followed his speech saw him again take the opportunity to stress that most farm businesses would be partially exempt from the changes – which will see APR and BPR payable on businesses worth more than £1m. But Reed’s insistence this figure would actually be closer to £3m due to a number of exemptions was met with a loud “rubbish!” from the audience.

Read more: Defra secretary Reed unveils public procurement plan, but no changes on IHT reform

Perhaps mindful of the fact he was never going to convince this crowd the IHT changes will have a minimal impact on businesses, Reed did say the government would “continue to keep listening” on this thorny issue.

But the main thrust of his appearance was to push the merits of how his ‘New Deal’ would instead fix the general foundations of the beleaguered farming sector, and profitability and food security as a whole.

Citing the prevalence of “this is the last straw” placards at the protests which followed the budget, Reed said “the straws are piling up and up – and the camel’s back is close to breaking”.

The sector’s malaise, therefore, was about much more than the IHT reforms, he suggested, and in fairness he has a point – as readers of The Grocer over the past couple of years will be only too aware.

His answer was a series of announcements designed to improve the resilience of the sector, including more detail on how the government would increase public procurement of British food (more on that here), plus new contract regulations promoting fairer trading, similar to last year’s new dairy regulations – with the pig sector first in line in the spring.

A future for food production

Reed also reiterated Labour’s previous commitment to reform planning rules to ensure farms could build infrastructure more quickly, in addition to its commitment to protect farmers in future trade deals. He pledged to support them during difficult harvests and supply shocks.

This was a government that would have food production at its core, he stressed, and one that would listen and work with the farming sector, particularly in areas such as the transition to more sustainable production systems.

“It won’t always be easy,” he said, but Labour’s plan would ultimately “bring real opportunity. There’s a place for every farmer in that future.”

The reaction to the speech was generally positive, particularly the added detail on public procurement – but it was also caveated with concerns from the likes of Sustain over how planning reform could lead to more intensive farms being built. Elsewhere, the Sustainable Food Trust’s Patrick Holden said he didn’t believe the government was ambitious enough on sustainability.

The NFU, meanwhile, warns that many farm business simply won’t survive the government’s ‘New Deal’ reforms, and is calling for a “genuine reset moment” with farmers and growers. “After the inflationary budget, all of these issues need to be addressed,” particularly on IHT, said Bradshaw.

Reed conceded in his speech that change “won’t always be easy” for the sector. And it’s not going to get any easier for him, either.

The NFU is planning a ‘National Day of Unity’ (AKA more protesting) on 25 January as it continues to oppose the IHT reforms, and that will be followed by the NFU Conference on 25 February – and potentially more irate farmers for the secretary of state to have to face.

He’s going to have his work cut out to change the mood.