Repairing relationships with farmers and businesses, whilst putting the UK on a path to food security and nature recovery, will require the kind of political fleet of foot that has thus far eluded the new government, says Nick Hughes.
Farmers fuming over inheritance tax. Businesses bearish over growth prospects. Public approval ratings tanking. A happy new year it most certainly isn’t for Sir Keir Starmer.
Negative mood music surrounding a new government isn’t uncommon six months into their tenure, even at a time when the country has long been crying out for a change in leadership. As Andrew Marr alluded to in a recent New Statesman article, it’s often forgotten how Tony Blair – who surfed a wave of personal popularity en route to office in 1997 – had to face down fierce opposition over changes to incapacity benefits and means-tested tuition fees in his early months in power.
That’s not to compare the position the two leaders faced on entering 10 Downing Street. Starmer has started from an altogether more challenging position than Blair. Not only is the economy in dire straits, his huge majority is as fragile as a huge majority can be. As political science professor Robert Ford noted in an article for The Observer, only two in every 10 eligible voters cast a ballot for Labour at last year’s election with the vagaries of the first past the post system largely responsible for Labour’s formidable grasp on the levers of power.
Allied to the downbeat tone adopted by Starmer and his top team since taking office in July (the antithesis of Blairism one could argue), this lack of public enthusiasm helps explain why early approval ratings are worse than for any modern prime minister at this stage of their tenure, with the exception of John Major following the exchange rate mechanism crisis in 1992.
That makes the backlash against recent government policy all the more problematic. When your programme for government is rooted in a ‘plan for change’, as is the case with Starmer’s Labour, you need key stakeholders on your side in order to deliver it. At the very least you need them not to be intractably opposed to your policy platform or, worse still, hell bent on sabotaging it.
Fair hearing
From a food systems perspective, the discord among farmers and businesses surrounding government policy, most notably October’s budget, assumes real significance in a year when Labour plans to deliver a trio of major new policy frameworks with implications for food and farming – a national food strategy, a land use framework and a farming roadmap.
Voters in farming communities have traditionally been among the Conservative Party’s staunchest supporters, but following years of frustration with government policy over trade deals, access to overseas labour and supply chain fairness, farmers were prepared to give Labour a fair hearing at the last election. The party went on to win a sizeable number of rural seats, as did the Liberal Democrats whose countryside campaigning centred on how the Conservatives had let down farming communities and overseen the degradation of our natural environment.
At a stroke, Labour burnt a lot of that political capital with the farming sector following Rachel Reeves’s autumn budget and in particular the government’s proposed changes to the inheritance tax regime which sparked protests in Westminster.
Steve Reed sought to begin the task of repairing the government’s relationship with farmers last week when he acknowledged the challenges they had faced over many years: “The straws are piling up and up – and the camel’s back is close to breaking,” Reed sympathised.
The Defra secretary of state used his speech at the Oxford Farming Conference to move the debate forward as he trailed a farming roadmap billed as “the most forward-looking plan for farming in our country’s history”.
Those in the audience gave Reed a respectful hearing and he left the stage to polite applause, but the backlash from farmers against the package of measures announced in the budget – regardless of the merits of individual policies – has put the government and key departments like Defra immediately on the back foot: far from ideal ahead of a year when serious food system reform is on the menu.
Confidence among farmers has been shattered, according to responses to Farmers Weekly’s annual sentiment survey. Ahead of the budget, 44% of respondents said they were feeling either “pessimistic” or “very pessimistic” about their business prospects. After the budget, that figure had soared to 61%.
Hospitality ‘betrayed’
Farmers are not alone in being driven to despair by Reeve’s targeted tax hikes. Increases to the national living wage and in particular the threshold and rate at which national insurance contributions are paid are going to have “a significantly devastating impact” on hospitality businesses in 2025, according to UKHospitality CEO Kate Nicholls.
Speaking with Prestige Purchasing chairman David Read at December’s ‘Foodservice price index’ annual briefing, Nicholls said: “It’s going to be awful in 2025. You’ve got £3.5bn of extra tax [coming] and most of the hospitality businesses I talk to are telling me it feels worse than [during] covid.”
A UKHospitality survey carried out immediately following the budget found that 85% of businesses say they are going to cut staff hours or head count this year; 95% are going to put up prices, while 97% are going to completely freeze and cut investment.
Whilst acknowledging the need to raise taxes in order to invest in public services, Nicholls said the government had been pulling the “wrong levers” from the perspective of the entire food supply chain with operators set to face rising inbound costs from suppliers alongside a hike in their own direct costs.
She was more positive about the impact of cost increases on sustainability efforts, stressing the importance of ensuring a resilient supply chain and linking green investment with cost savings, yet overall Nicholls reported a sense of businesses feeling unsettled and undermined by government policy since the election. “Betrayal is too strong a word but many people do feel a little bit betrayed and let down by what was said before and what has now happened,” she added.
These are strong words from a trade body that will have to sustain a constructive relationship with the government for the next five years in order to have its voice heard in Westminster. That makes it all the harder to dismiss business complaints as the usual grumbling over having to fork out money to the exchequer.
Farming roadmap
The upshot is the government now has to deliver meaningful reform to food and farming policy minus the goodwill of a large cohort of the business community. Among the farming roadmap commitments teased by Reed in Oxford were a requirement for 50% of public sector food to be produced locally or to higher environmental standards and for monitoring of where public sector food comes from. He also promised to introduce secondary legislation in Parliament by the end of March to enable precision breeding technology for plants, and to take action on supply chain fairness with new rules for the pig sector this spring followed by eggs and fresh produce.
Such policies are an easy sell to most farmers – albeit precision breeding remains a contentious topic – but Labour knows it won’t achieve its goal of restoring nature and meeting the country’s net-zero commitments without driving through certain changes that will upset the applecart.
Difficult conversations
When Reed sketched out the government’s plans for a joined up, system-wide food strategy in a call with stakeholders in December he hinted that time would not be wasted repeating the analysis carried out by Henry Dimbleby in his national food strategy. One of the main preoccupations of the Dimbleby plan was just how much UK land is currently used for livestock production. It modelled that a 30% reduction in meat consumption is needed by 2032 to hit the UK’s climate and nature goals. Yet there’s a reason why successive governments have refused to engage with the issue of meat consumption; it is prime ‘culture war’ territory over which the likes of Nigel Farage and his Reform party stand ready to fire the first shots.
Labour will need to have these kinds of difficult conversations with farmers, and with the British public, if it is to successfully decarbonise the food system – one of four core intentions for a food strategy whose broad focus was generally well received by stakeholders. Politically, however, it knows it is currently in no position to do so, hence we had Reed in Oxford promising to increase access for UK pork exports to China, as well as streamline planning rules so that producers can grow and diversify their business – “like chicken producers who want a larger shed to boost the amount of food they produce”.
The government’s task is not enviable. It is a delicate balancing act taking the kind of action that climate science demands while ensuring the farming sector feels supported and valued. Every prime minister knows you can’t keep all of the people happy all of the time. You do, however, need to persuade enough people that it’s in theirs and the country’s interest not to thwart your agenda at every turn.
There is still time for Labour to validate Starmer’s mantra that short term pain will unlock long term gain. But repairing relationships with farmers and food businesses, whilst putting the UK on a path to food security and nature recovery, will require the kind of political fleet of foot that Labour has thus far shown no convincing sign it possesses.
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