Election fever

An independent dose of news, views and insight from the world of farming and food

Viewpoint

Just prior to the last General Election I was at a breakfast event hosted by Sir William Shawcross where the guest speaker was the political scientist Matthew Goodwin. He suggested that the outcome of the tussle between Boris Johnson and the then Labour leader Jeremy Corbyn was going to define British politics for years to come. I had the temerity to suggest Boris wouldn’t last long and it might be the next election that would be more consequential. Although I was right about Boris, it’s hard to argue that the past few years haven’t been of great consequence for the UK, but perhaps not in the ways that Professor Goodwin was expecting. The big question this time around is not who will win, but how long will Labour remain in power? Over the past decades we’ve seen Labour and the Conservatives flip-flop for extended periods of time (Tory - 18 years, Labour – 13 years, Tory - 14 years), but as the rise and apparent fall of the “Red Wall” shows, voters are becoming more fickle. A multi-term Downing Street sojourn for Sir Kier is far from guaranteed, and given the growing intensity of the debate around food security and the environment, in particular net zero, it will be much harder for politicians to ignore the countryside.

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Andrew Shirley, journalist and storyteller

In this week's update:

·       Grain rally rolls on as incomes tank

·       General election announced

·       New permitted development rules in play

·       New SFI options

·       Solar farms restricted

·       X abuse

·       Trading places 

Commodity markets

Grain rally rolls on as incomes tank

Continued uncertainty about crop conditions in key grain-producing regions of the world like Russia is pushing ex-farm feed wheat prices closer to the psychologically important £200/tonne level. However, a new report from the Energy & Climate Intelligence Unit (ECIU), a non-profit research outfit, shows how important getting the right price for your grain will be this season. It estimates that arable farmers are set to lose £890 million – or 19% of profits - off the back of the ongoing wet weather, with wheat producers bearing the brunt of the losses with a £751 million hit. The ECIU points out the period from October 2022 to March 2024 was the wettest 18-month stint endured by the country since records began. Perhaps more controversially it also claims the rain was 15% heavier due to climate change and says a two degree increase in average temperatures will see similar wet periods every 13 years, compared with the pre-industrial average of 80 years.

Headlines

General election announced

In case you missed his rain-drenched announcement last Wednesday Prime Minister Rishi Sunak has called a General Election for July 4th seemingly blindsiding most of his MPs and pundits in the process. So what does it all mean for rural landowners and property markets? Labour is the bookies’ clear favourite with odds of just 1/8 available for those looking to take a punt on Keir Starmer forming the next government (interestingly you can get 200/1 on Reform taking the reins, but a quid wagered on the Lib Dems would win you a whopping £500), so the following thoughts assume come July 5th that Keir Starmer will be in the driving seat.

Rural property markets

Well, first of all will the event itself have an impact? Big elections are often used as an excuse by those not fully committed to buying or selling a property to sit on their hands for a little bit longer. But given Rishi had to go to the polls at some point this year anyway and the outcome doesn’t seem in too much doubt, I think the effect on the farmland market will be fairly limited, although some vendors who were considering a spring/summer launch to avoid the predicted autumn election hullabaloo may now opt to go later in the year instead. But more importantly for many, will a Labour win drag down farmland values? Look at any index of agricultural land prices over the years and there is no evidence that a switch in the colour of the party in power has any meaningful sway over values. Assuming – and I know to some that will be considered a big assumption - Sir Keir has genuinely put a lid on the influence of his party’s far-left activists and the UK isn’t set to see a mass exodus of investors and wealthy individuals it’s hard to see this election bucking that trend. Most of the current drivers for land purchases and retention will remain.

Curtailed Conservative legislation

Is there anything relevant that the Conservatives had in the pipeline that won’t happen? The Renters Reform Bill, which would have banned no-fault evictions (but was generally considered positive by both landlord and tenant organisations) was not included in the last-minute list of bills pushed through parliament before it shut for business on Friday so will not become law before the election. But given Labour would have supported it, it will likely be resurrected in some form post polling. The Leasehold and Freehold Reform Act did, however, make it onto the statute books in time, but Former Defra minister Thérèse Coffey’s useful livestock worrying bill was left marooned at its second reading stage in the House of Lords

Impact on rural businesses

In terms of Labour policies that could impact farms or estates it’s hard to see anything announced so far (unsurprising perhaps as Sir Keir is often lambasted for his lack of detailed policy) that will radically shift the status quo.

Tax - I was at the CLA conference last autumn when shadow farming minister Steve Reed announced Labour had no plans to tamper with Agricultural or Business Property Relief, although the rules may well be tightened further to ensure ‘non-farmers’ can’t benefit.

Access - Labour’s leader has also distanced himself from calls to implement right to roam across all of England, although his more left-leaning members will be agitating for a more Scottish approach to land ownership.

The environment - The Sustainable Farming Incentive will probably continue largely as is, but there could be a greater focus on net-zero measures that may have implications for farmers.

Pay - Workers’ rights will definitely be a focus for Labour, including looking at zero hours contracts. This is unlikely to hit farming businesses that already have to offer good packages to attract workers, but it could ramp up the costs for diversified labour-heavy businesses on rural estates like catering and leisure enterprises.

Planning - As part of its pledge to get more houses built, create the infrastructure that will speed up a green energy transition and generally be more pro-business, reform of the planning system has been promised. Given Labour’s heartland is more urban than the Conservatives, some are predicting its policies may well be less swayed by ‘nimby’ arguments, but as previous reforms have shown tinkering with the planning system is unlikely to be a silver bullet.  

In brief

New permitted development rules in play

A raft of changes to permitted development rights (PDR) came into effect last week. These include increasing the number of residential dwellings that can be created from redundant farm buildings from five to 10 with a maximum combined floor area of 1,000 sq m (Class Q), plus more flexibility and allowable floor space when converting farm buildings into commercial spaces (Class R). The maximum area for new agricultural buildings constructed under PDRs has also been increased to 1,500 sq m.

New SFI options

Those applying for the Sustainable Farming Incentive (SFI) this year will have significantly more options to choose from. The number has been upped from the 23 on offer last year to 102. Twenty-three of them are completely new, including precision farming payments, but 57 are “improved” versions of options previously offered via the mid-tier of Countryside Stewardship, which will now be subsumed into SFI. New entrants and those who never claimed support under the Basic Payment Scheme are now eligible to join SFI for the first time. Those making claims over common land will receive an extra £7/ha to make up for the extra complexity of the process.  

Solar farms restricted

A recent parliamentary statement from Energy Security and Net Zero minister Claire Coutinho has made it clear that planning authorities should not give consent for new solar farms on Grade 1, 2 and 3a farmland unless absolutely necessary. The minster also said that the cumulative impact of local solar farms could be taken into consideration and that the government would provide support for a more consistent soil-sampling process to better judge land quality when assessing applications.

X abuse

It feels like I’ve made it. After years of wallowing in the social media cesspit X, formerly known as Twitter, somebody has finally taken the time to hurl some abuse at me. Well, they called me a dumbass, so admittedly nothing too unpleasant. My crime? Wading into a debate and suggesting that in ecosystems devoid of apex predators, such as bears or wolves, humans need to play the role themselves to avoid things getting out of kilter. I didn’t think it was particularly controversial. A bumble bee expert, for example, once told me in no uncertain terms that badgers can decimate bees if left unchecked. Sadly, though, they admitted that wasn’t something they could ever say in public.

Trading places

Eagle-eyed readers might notice that this newsletter has a new name and that I’m no longer signing off as Head of Rural Research at Knight Frank. After 16 years with the business, I’m going back to my journalistic roots and will, for now, be working as a freelance editorial consultant specialising in rural issues and investments of passion. If you signed up for this newsletter because it was coming from Knight Frank please feel free to unsubscribe, but if you enjoy my weekly witterings do stick around!