CLA Rural Business Conference 2024
Picture by Post Photo Ltd.
CLA Rural Business Conference 2024
Environment Secretary Steve Reed has accepted he owes landowners an explanation for The Labour Government’s decision to scrap 100% to agricultural inheritance tax relief after promising a year ago there would be ‘no change.’
He told the Country Land and Business Association’s (CLA) annual business conference on Thursday (Nov 21) that when he pledged as shadow environment Secretary in November 2023 that an incoming Labour government would not impose tax changes on farmers, he and the Treasury did not know of the £22 billion black hole in the UK’s public services budget.
Mr Reed told CLA President Victoria Vyvyan: “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.” But he refused to apologise for Labour’s decision to make the changes which farming leaders fear will devastate family farming businesses and force many to sell up to meet inheritance tax bills.
The Secretary of State was unrepentant about the changes, which impose inheritance tax at 20% on farm assets worth more than £1m. The CLA believes that around 70,000 farm businesses will be affected. Mr Reed said 500 farms a year would pay the tax, based on data from the Treasury gathered in 2023.
He justified the tax changes insisting that farmers and rural communities would benefit from the investment it would generate in public services, including the NHS, rural transport, fighting rural crime and new housing.
And he claimed Labour cared about farming and rural communities, investing £5bn in farming over the next two years. “That is the biggest budget for sustainable food production in this country’s history,” he told delegates.
That figure has been questioned by farming groups who point to a range of negative financial impacts affecting farmers and landowners, including cuts to subsidy payments, delays in the introduction of environmental support schemes, higher employers’ national insurance and increases in the minimum wage for staff.
One farmer, whose family face a £400,000 inheritance tax bill on his death, told the conference the only way he could see to avoid the payment – which his business could not afford - would be to take his own life before April 2026, when the new rules come into effect. He asked the Secretary of State: “How many lives do you think will be lost as a result of these changes?”
Mr Reed suggested farmers take tax advice to ensure they minimised their financial exposure.
The theme of the conference, at the Queen Elizabeth II conference centre in Westminster, was Growing Profitable Partnerships with a focus on shortening supply chains.
Delegates heard from food and drink industry specialists on the importance of collaboration and communication to improve their businesses.
Will Beckett, founder of the Hawksmoor restaurant chain, set out the importance of communicating the vision of the business to customers. He said working closely with farmers who produce the top-quality beef for Hawksmoor’s 13 steak outlets in the UK, Ireland and the US, was essential.
David Hughes, Emeritus Professor of Food Marketing at Imperial College, London, highlighted the importance of building a brand to increase profitability, citing Pink Lady apples as a prime example.
He revealed the massive growth in the ready meal sector which offers convenience for consumers. He said five times as much shelf space at a supermarket he visited in Wales was given over to ready meals produced under the brand set up by market leader Charlie Bingham compared to shelf space for fresh lamb.
Prof Hughes said: “Food service and food retail have converged. My mother used to go out and buy ‘ingredients’ – now people buy meals ready prepared. That sector of the market is going gang-busters!”
Jake Pickering, head of agriculture at Waitrose and partners, said the supermarket works with 2,500 farmers – including 38 dairy farmers, the majority producing what Waitrose calls ‘free range milk’ from cows grazed outdoors.
He said communication with Waitrose customers was essential, via the free Waitrose Weekend magazine – the largest circulating free newspaper in the country – and online. He praised the live streams posted on social media by Waitrose’s farm suppliers, which customers view to find out where their food comes from and how it is produced.
However he did acknowledge: “We need to get better at communicating.”
Food producers, including Abby Allen of Pipers Farm, Catherine Temple of Mrs Temple’s Cheeses, and Andy Gray of butchers MC Kelly, all highlighted the importance of building trust in their brands.
Mrs Temple described returning to the family farm in Norfolk to take over from her parents and needing to diversify to sustain the business. This included:
Selling the Holstein dairy herd and buying in Brown Swiss cows – which can produce 10% more cheese for every 10 litres of milk.
Setting up an AD plant to process waste and produce energy to run the dairy operation - and putting solar panels on the cowhouse roof.
Growing a rotation of soil-enriching crops, including lucerne to feed the cows, and dramatically reducing tillage of the ground.
Making and selling her own cheese, locally.
Abby Allen said Pipers Farm is a wholly online business built on three pillars – great tasting meat, a close relationship with family farms and trust in their produce.
The final session of the conference was an exploration of the close relationship between a major brand, Ribena, and the 34 growers who supply the soft-drinks maker with their fruit.
Ribena buys 90% of all the blackcurrants grown in the UK and Harriet Prosser, the company’s agronomist, said it their relationship with growers was truly symbiotic. “We couldn’t exist without them and they couldn’t exist without us,” she told delegates.
Gavin Lane, the CLA deputy President, closed the conference, thanking delegates for showing respect to the Secretary of State and giving him credit for appearing at the event after a bruising week for the Government over inheritance tax.
He said governments had ‘got it wrong’ with farming and the countryside in the past – citing the foot and mouth crisis of 2001. He said it was now time to ask how the Government can ‘do better on our behalf’ suggesting it was time for them to “re-connect and communicate.”