Steve Reed speech at the 2024 CLA Conference
Secretary of State for Environment, Food and Rural Affairs, Steve Reed, addresses the 2024 Country Land and Business Association conference.
Well, thank you very much for your welcome and thank you, Victoria, for, as always, a very robust introduction and for inviting me to speak here today.
I recognise the frustration and anxiety that many of you in this room are feeling about the reforms to Agricultural Property Relief, as we saw in Westminster earlier this week.
Despite the headlines, I share your ambition to support farmers. Even if we sometimes disagree about the best way to get there.
I’m going to talk about Agricultural Property Relief, but if I may, I’ll first address what the Budget means for farmers and for rural communities in the round.
The Budget commits £5 billion to farming over the next two years.
That’s the biggest budget for sustainable food production in our country’s history.
This includes the Environmental Land Management schemes that are essential to help farmers move to more sustainable models of food production, that will support the industry and protect the environment for many years to come.
We’ve also provided £60 million to help farmers affected by the unprecedented flooding that we saw earlier this year and the end of last year, with the bulk of these payments already in farmers’ bank accounts.
And we will protect farms, rural homes and businesses for the longer term with £2.4 billion to rebuild our crumbling flood defences, currently in their worst condition on record.
The importance of biosecurity has been underscored by farmers facing Bluetongue in their herds and their flocks – and we’ve unfortunately had two cases of avian influenza just this autumn.
Disease outbreaks can literally wipe out farming businesses, so I am pleased that we’ve secured over £200 million to transform our world-leading biosecurity defences at Weybridge that had fallen into disrepair.
This work may not grab headlines – but it is vital to protecting British farming.
All this came in the context of an incredibly difficult fiscal situation that this government inherited.
When the Chancellor of the Exchequer announced her Budget three weeks ago, she did so facing a £22 billion black hole in the public finances.
Victoria, you asked me last year if Labour would raise APR.
I said no. That was our position at the time.
You deserve an explanation.
I gave that answer because we did not know the full extent of the country’s financial crisis. None of us could have. Because, as the OBR – the independent Office for Budget Responsibility – has since told us, the previous government covered it up.
Instead of taking tough decisions to protect the economy, they said what people wanted to hear. They announced they would spend money that they knew didn’t exist.
The economy was flatlining, our public services were on their knees, business confidence and investment was falling.
The early failure to address that reality sent interest rates, mortgages and prices spiralling out of control.
There’s no way to turn our broken national finances around without plugging that £22 billion financial gap.
So, the new Government took tough decisions across the board on tax, welfare and spending – and yes, that included APR.
As a result of the changes, some landowners and farms will pay more inheritance tax.
But we want to support family farms.
Land prices artificially inflated by non-agricultural buyers purchasing land for inheritance tax purposes are making it hard for young farmers to set up farms of their own.
This is backed up by data from property consultants Strutt and Parker that shows over half of farmland sold last year went to non-farmers.
Buying agricultural land has become the most efficient way for wealthy individuals from non-farming backgrounds to shield that wealth from inheritance tax.
This is not what APR was designed for, and it’s also pricing farmers out of farming.
As things stand, 40% of the billion-pound value of agricultural property relief is claimed by the richest 7%.
That is not fair, and it’s not sustainable.
I know the CLA disputes the figures – Victoria made that clear just now and indeed we met last week to discuss this and solve this disagreement.
But the Treasury’s figures are based on hard data from actual claims from the relief.
This includes the impact not only of APR, but also of BPR.
And it shows that only 500 estates a year will be affected.
This figure is endorsed and verified by the independent Office for Budget Responsibility.
The figures are robust.
Owning assets over the exemption threshold does not necessarily mean you have pay inheritance tax on them.
That depends on other reliefs that are available – how many owners the farm has, what sort of ownership is in place and how your assets are valued when the estate is passed over as inheritance.
APR was not as generous before 1992, and family farms were still passed on before that date.
But I know farmers and landowners who haven’t had to think about this issue for thirty years find it worrying now they have to again.
The reforms won’t be introduced until April 2026, so there’s time for farmers and their families to plan for the changes and get professional advice about succession planning.
The truth is, hard data – independently verified – shows that the vast majority of claimants will still pay nothing.
But the reforms will raise money that will help fix the public services that rural and farming communities rely on just as much as anyone else in the country.
A better NHS, affordable housing, good local schools, good local roads and reliable public transport.
It will help us fix the foundations of our broken economy that has been flatlining for years.
We’ve just been through as a country the worst decade for wage growth since the Great Depression of the 1930s.
Victoria just said, based on CLA figures, the rural economy is 16% less productive than the national average. That’s not the fault of people working in the rural economy.
A lack of investment in public transport links in rural areas means people have struggled to get to work, to hospitals or other vital services that they need to use.
Rural home ownership is out of reach for too many – too few homes were built and even fewer that were genuinely affordable.
Digital connectivity lags behind urban areas.
Rural communities have been ignored and left behind. We simply can’t accept that anymore.
This Budget marks the turning point for national renewal and a new start to make our rural communities thrive again.
Now, one of the things farmers were telling me last Tuesday is how little profit they make, how little money for all the hard work they put into producing the food for the rest of us to enjoy.
The answer to that isn’t to tell farmers they’re ‘not in it for the money’ as I’ve heard just last week.
The answer is to make farming more profitable.
This Government will do precisely that. We will make the supply chain fairer so food producers and growers are not forced to accept unfair contracts.
We will lay regulations in Parliament in the spring to improve fairness in the pig sector, and are making progress on eggs and on fresh produce.
We’ll tear down the barriers to trade with a new veterinary agreement with the EU to get our British food exports moving across the border again, and we’ll protect farmers from ever again being undercut by low welfare and environmental standards in trade deals.
We’ll use the Government’s own significant purchasing power to buy British, and we will support innovation and agri-tech to boost productivity and protect the environment.
And we’re setting up GB Energy to harness the power of homegrown wind, wave, solar and nuclear power to take back control of our energy supply inside our own country so that we can cut energy bills.
In our first few months in office, we’ve taken immediate actions to support the sector.
We’ve authorised emergency vaccines and implemented control schemes to limit the spread of the Bluetongue virus; confirmed the Seasonal Worker visa route for 2025, with more visas available for horticulture and poultry; and announced a new Commissioner for the Tenant Farming Sector in England to be appointed next spring.
We’ve set up a new Flood Resilience Taskforce to strengthen our response to flooding; confirmed a further £50 million for Internal Drainage Boards to improve flood barriers and embankments; and we’re reforming planning to make it quicker for farmers and landowners to diversify and create new income streams to support their business.
I’m not prepared to let so many farmers keep working so hard for so little. We need to work together to agree what we want British farming to look like in 25 years’ time.
That means a plan to transition farming to new models that are more environmentally, and also more financially, sustainable for the long-term.
We will do this by developing a 25-year farming roadmap that will be the most forward-looking plan for farming in our country’s history, with a focus on making farming and food production more profitable in the decades to come.
It will not tell farmers what to do. It will be farmer-led, so they can tell government what they need to make a success of this vital transition.
On Tuesday I listened to farming leaders, and I listened to individual farmers who came to speak to me as well. I was struck by how many of them described the issue that had brought them onto the streets as ‘the final straw’.
Those straws have been piling up for many decades now. They are the frustrations of rural communities across Britain who feel misunderstood, neglected and frankly disrespected.
This isn’t just about tax or even just about farming – important as those things are. It’s about a whole community demanding to be treated with respect.
This Government will work with rural communities to build the new, affordable homes they need. And we’ll do it in a way that restores more of our nature and beautiful countryside.
We’ll devolve control over skills and training so rural businesses can help develop the workforce they need to succeed, including in growth industries of AI and new technology.
We’ll rebuild our broken NHS so rural communities have better access to GPs and hospitals.
We’ll give rural communities control over their own buses so public transport can better connect our rural towns and our villages.
We’ll direct public and private sector investment to rebuild rural economies as we rebuild our water infrastructure, with the biggest investment in that sector’s history, our new clean energy infrastructure, and build 1.5 million new homes.
Crime blights too many rural communities, so we’ll set up the first-ever cross-government Rural Crime Strategy and will put more neighbourhood police on rural streets to keep people safe from crime and anti-social behaviour – and crack down on nuisance like fly-tipping.
I heard the anguish of the countryside on the streets of London earlier this week. We may not agree over inheritance tax changes. But this Government is determined to listen to rural Britain and end its long decline.
We are investing £5 billion in sustainable food production to benefit farming, rebuilding our shattered public services that rural communities rely on, and fixing the foundations of our broken rural economies, so they can grow again sustainably for decades in the future.
The opportunity before us is to turn the page on years of decline and give our rural communities back the respect they deserve.