The new government, a year on: what are Defra’s priorities?

This is a government for whom the honeymoon period ended swiftly. Desperate to demonstrate economic credibility, abiding by her fiscal rules has become an obsession for Chancellor Rachel Reeves. The commitment to balance day-to-day spending by 2029 is the driving force behind the policy decisions outlined in last autumn’s budget, many of which have had a significant impact on the cost of doing business in the UK.

For the farming community, the most significant of her decisions was changing inheritance tax rules for family farms. Sluggish economic growth and challenging geopolitical headwinds since then have worsened the government’s economic woes. Unprotected government departments, including the Department for Environment, Food & Rural Affairs (Defra), are bracing themselves for further cuts in June’s spending review and the autumn budget.

Against this backdrop, Defra ministers are struggling to communicate their policymaking priorities effectively. The government’s first year of policymaking has served up some unpalatable reforms for the industry, ranging from the changes to agricultural property relief to the abrupt closure of the Sustainable Farming Incentive. Whether these decisions should be attributed to government inexperience or political apathy depends largely on your own political perspective. Nevertheless, the government says it has big ambitions for the sector. For those watching eagerly from the sidelines, big questions remain for how they intend to achieve them.

Events may soon accelerate the political imperative for the government to bring some cohesion and clarity to the sector. Less than twelve months since the general election that delivered the Labour landslide and Keir Starmer to No.10, the world is already a very different place. Escalating global conflicts and increasing geopolitical instability are forcing governments to consider their own resilience and sustainability. The war in Ukraine and the Covid pandemic shone a light on the UK’s vulnerability to fluctuations in the cost of energy and fertilizer, which has a direct impact on the food supply chain in this country.  The government recognises that ‘food security is national security’ and solving the challenges of food security are set to climb to the top of the national political agenda in the coming years.

The resilience and sustainability of the sector will continue to dominate thinking at Defra, both through an environmental lens and regarding long-term profitability. Former NFU President Baroness Minette Batters has been appointed to lead a review of farm profitability, which will make a series of recommendations to the newly formed profitability unit within Defra. However, with acute pressures on public spending, there is firm recognition from ministers that increasing the profitability of the sector will be difficult without securing investment from the private sector. The government is keen to harness the power of private investment in nature restoration and natural capital investments. It has announced new green finance standards designed to drive economic growth and support investment in projects to restore rich habitats. It is also consulting on ways to increase the integrity of, and raise confidence in, voluntary carbon and nature markets.

This parliament will see greater collaboration between Defra ministers and the Department of Health and Social Care and the Department for Education, particularly on national food policy. Driven by concerns around food security and the soaring cost of obesity to the NHS, the departments are keen to shift how the nation thinks about and consumes food. Work to produce the new national food strategy is currently underway, due to deliver initial proposals later this year. To date, the government has sent strong signals that it is not afraid to adopt an interventionist approach when it comes to matters of public health. Its revisions to the sugar tax to decrease the thresholds and expand the scope of products is a sign of its willingness to use policy to achieve its objectives.

Seeing the complex policy challenges of food, health and farming as intrinsically linked seems obvious to most observers but for a government that tends to work in siloes it would be a huge shift in behaviour. There is a real opportunity for greater collaboration across government and the sector to put these key issues at the heart of policymaking. The challenge for government is getting it right when inexperience and acute pressure on public spending is high, so there is a clear role for businesses to share expertise, experience and excellence to inform high quality policymaking.

If you’d like to discuss this in more detail, including how GK Strategy can support you with government relations and communication, please contact Thea Southwell Reeves.

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