William Hargreaves from Savills Suffolk discusses Labour’s plans for the agricultural sector.

There has been much speculation about what Chancellor Rachel Reeves could have in store when she sets out the government’s autumn budget later this month.

The eagle-eyed may well have spotted there has been little mention of the rural sector. With this in mind, what are we expecting for Defra? 

The current agricultural budget is £3.5 billion, of which £2.4 billion is the annual farming budget for England – funding environmental land management (ELM) alongside grants in areas such as productivity, innovation and animal health and welfare.

William Hargreaves, who leads the rural agency team for Savills in Suffolk and CambridgeshireWilliam Hargreaves, who leads the rural agency team for Savills in Suffolk and Cambridgeshire (Image: RMG Photography) With speculation of a £358 million agri budget underspend (over three years), what could be the unintended consequences of any cuts?

For government – it would need to reassess targets for food production, environmental protection and recovery, and further manage expectations for delivery on both.

For the rural sector – businesses would need to reassess profitability and sustainability within current enterprises and make changes which could impact levels of food production and environmental protection and recovery.

All of this is occurring against a backdrop of uncertainty regarding agricultural property relief (APR) from inheritance tax. While Labour categorically stated it had no plans to change APR, this was before the prime minister warned “things will get worse before they get better”.

If inheritance tax reliefs are revised, it could affect succession planning and many farming businesses will need to re-evaluate their position.

The Labour manifesto 

The government set out several messages supporting the rural sector in its manifesto, including making ELM work for farmers and nature; a recognition that food security is national security; and a pledge that all food purchases across the public sector will be locally produced or certified to higher environmental standards. However, it was very light on actual detail, and we continue to wait for much-needed clarification. 

Labour did say it was here to steady the ship for the agricultural sector, having seen the uncertainties and change the industry has faced in recent times. 

With this in mind, the government will do well to stick by its statement and return to a 2013 report, in which it said it is committed to working with UK farmers and producers to ensure a resilient, safe and secure supply of food, and that food can drive the economy.

With economic stability a key commitment, let’s see this happen.

For advice on the rural sector in Suffolk, please contact William Hargreaves at Savills on 01473 234802 or WHargreaves@savills.com