Farm Diary: Budget is a real blow to British farmers

No more media speculation, most of which was wrong apart from the deliberate leaks to soften us up. The opposition is suitably enraged (not that they matter now) and whilst there is something for many in the budget, there is something for most to object to as well.

It was certainly big; very big. Unprecedented measures of tax and spend; a throwback critics say to the 1970’s style budget of old Labour. I do not agree, although it is very disappointing that there is so little economical growth expected from the OBR as a result of this budget; it was advertised as a budget for growth after all.

Once again, this new government managed and communicated things badly, giving the impression of incompetence. The definition of working people dominated the run up to the budget and once it was over, the chancellor had to admit the very next day, that it was actually going to harm working people through lower wages, fewer jobs possibly and so on. The desire to settle old scores and throw some red meat to the hard left was also disappointing. VAT on private schools was the worst, a regrettable policy built on the back of envy, but not properly thought through either and will certainly lose votes from many ordinary working people, who do without and struggle in order to send their children to a school which will give them a better chance for their future.

It was the Labour Party that did so much harm to state education by insisting on abolishing grammar schools and introducing comprehensive schools 50 years ago. Today in many areas we have primary schools doing the work of parents, a sort of care in the community rather than education, and the comprehensives exercising crowd control, rather than proper education. Michael Gove had made good progress when education secretary, and England has moved well ahead of Wales and Scotland.

Both Wales and Scotland historically lead in education of course and it is the key to social mobility, better jobs and indeed well-being. The imposition of VAT on special educational needs and disabilities (SEND) is especially distressing for parents, who see their children sacrificed on the altar of virtue-signalling class envy; I thought Keir Starmer was better than this. The added disappointment was that there was nothing substantive about the country’s ability to generate wealth, just a continuation of the past, where fiscal policy has been a story of servicing pensioners at the cost of everyone else. I do hope I will be proven wrong here.

The vast public spending plans on capital items will however produce growth, providing enough training and workers can be found. Will they hit their target of 1.5 million new homes? The OBR thinks not, and that they will be 200,000 short. Will non-doms flee? Well, some might, but most will stay as it is difficult to conduct business here without living here at least part of the time is the general opinion. If some leave, so be it, if they don’t want to contribute why should they be here, is the other angle on this.

Agriculture has reacted to the budget with fury, NFU President Tom Bradshaw accusing the government of going back on its promise on agricultural property relief. The budget is a real blow to British farmers and could lead to increased food prices, he said. The budget will certainly add to the cost of producing food, at a time when hard pressed British farmers cannot absorb it.

After a decade of shrinking margins, cost inflation and extreme weather event, British farmers are at breaking point. The changes to the Agriculture Property Relief (APR) and Business Property Relief (BPR) despite repeated assurances from ministers, put the future of family farms at risk.

I think the fact that the threshold is set at £1m is exceptionally low. Many if not most small farms will exceed this figure and therefore might need to be sold in order to cover the tax. I understand the need to prevent wealthy people investing in farmland in order to shield that money from tax, passing it on to family members tax free, but farmers have now all been caught in the crossfire.

The NFU is planning a series of meetings on this issue. Farmers are also reeling from the announcement to speed up the phasing out of the farm support schemes. This will be another significant cut to farm incomes, at a time when the replacement schemes leave many farmers locked out.

There is also the increase to the minimum wage, and whilst we should never begrudge paying people properly and whilst many farmers pay well above the minimum wage, this will hit some hard. The issue here is that for those who are currently paying the minimum wage, someone needs to reimburse that in the produce they sell, as they cannot possibly cover it.

Supermarkets will undoubtedly refuse to do so or will prevaricate and delay until some go out of business before acting. Either way, the combined effect of these policies will drive up food prices, which will need to be paid for by working people; no doubt about that.

Let’s be perfectly fair about all this. The complete mess left by the last government, unprecedented for a Conservative government to mismanage the economy like this, needed to be sorted, and there were no easy choices. Now I have read pages of criticism and some puerile nonsense in the media, but no one – no one has taken different choices and stood behind it as a better alternative as far as I know.

This may happen in the coming days and weeks, but I doubt it. It is easy to criticise, we can all do it as I have demonstrated here, but anyone criticising this budget needs to put forward an alternative budget. The Conservative party prospective leaders would have done better to be more measured in their criticism, especially the charge of lying to the people when their record of late is probably the worst anyone can remember.

We are waiting to see who they elect as leader and how quickly they can re-group behind that leader. My fear is that the opposition will continue to be split after their new leader is announced, and rather than present an effective opposition, holding this Prime Minister and his team to account which is vitally important, they will return to briefing against each other and carry on the in-fighting.

I sincerely hope that I am wrong, but it will take a very strong and determined leader to lead such a bitter and divided party. Keir Starmer has shown that you can come from zero to hero in five years following a resounding defeat. The question is, can the Conservatives repeat that, and present a united front with sensible coherent policies in five years’ time?

It could happen and the opportunity will be there if the Labour Party fail to make this radical budget and economic plan work. I’m not sure that beside the obvious handful of stars in this government’s ministerial positions today, who else is there? This Prime Minister has a reputation for being ruthless; the next few months is the time to put that into action and replace those who can’t deliver.