Amongst the measures to raise an additional £40 billion in taxes were significant changes to business property relief (BPR), agricultural property relief (APR), and increases in capital gains tax. In addition to these measures impacting farmers, delinked payments have been slashed too. Despite fears that Defra’s budget would be cut heavily, its overall budget was increased in real terms. However, the farm support element was frozen at £2.4 billion, so it continues to fall in real terms.

Whilst APR and BPR are likely to dominate the agricultural headlines for some time, other matters continue to progress. The RPA is consulting on the sanctions for mismanaging hedgerows, and the government is moving forward with plans to protect 30% of the UK’s land and sea by 2030.

FOOD & FARMING

Delinked payments slashed
Alongside the Budget, Defra announced an acceleration of the rate at which delinked payments (formerly the Basic Payment Scheme (BPS)) will be cut. Delinked payments are based on the average amount claimed in 2020-2022. For 2025, Defra is applying a 76% cut to the first £30,000 and a 100% cut to any amount above £30,000 - this means the maximum delinked payment in 2025 will be £7,200.

For example, a 200-hectare farm in England would have received approximately £22,000 in 2024. Based on a progressive reduction the 2025 figure was anticipated to be in the region of £17,000. Instead, it will be £7,200, which equates to a difference of £50 per hectare. On a 400-hectare farm, there is a £70 per hectare reduction.

These changes will impact all farmer's budgets for 2025 and 2026 significantly. Applying for some of the new Sustainable Farming Incentive (SFI) options that launched this year could be one way to help reduce the impact. Free business advice to help farmers adapt to farm support changes is available via the Future Farming Resilience Fund (FFRF), which runs until February 2025. It is open to any farmer in England who is registered with the RPA and has an SBI number. Please click here to find out more and register your interest. 

Nature over food production
Many rural voters believe that government payments to farmers should support nature restoration, even at the cost of food production. A survey by Stack on behalf of The Conservative Environment Network found two-thirds of rural voters agreed that damage to the natural environment threatens our ability to produce food. Almost half (47%) said farmers should restore nature first, even at the expense of food grown in the UK. A separate survey by the CLA of 250 land managers concluded that Environmental Land Management schemes are crucial for their survival. Four in five respondents considered SFI and Countryside Stewardship (CS) schemes crucial for their businesses' viability. Three-quarters of those surveyed are currently enrolled in the SFI or CS schemes, with 35% earning between £10,000 and £30,000 per year from them. Both surveys preceded the Budget, when there was widespread concern about budget cuts. See below for our overview of the Chancellor’s announcements affecting the rural sector.

Trust in agriculture at an all-time high
Consumer opinions of British agriculture have exceeded the record highs last seen during the Covid-19 pandemic. The latest findings from the AHDB consumer trust study show that 67% of consumers feel very or somewhat positive towards British agriculture, a jump up from 62% in September 2023 and exceeding the previous peak of 66% in September 2020. Consumer trust in farmers is impressively high, with 76% of UK adults agreeing that farming was a trustworthy profession in the 2024 study. The level of trust is similar to that enjoyed by doctors (78%) and above other well-respected professions like teachers (69%).

POLICY

What the Budget means for farms and estates
Rachel Reeves, the Chancellor of the Exchequer, delivered the Labour Party’s inaugural Budget on 30 October, outlining the fiscal roadmap for the coming years. The heavily anticipated event was filled with actions and budgetary policies set to affect the rural sector. Key UK headlines are changes to BPR and APR, which will come into effect in 2026. The new rules will provide 100% relief up to the first £1 million of combined agricultural and business property, then a 50% relief on the value over this. According to the Treasury, 75% of estates will not be affected by this change; however, key industry bodies have expressed concern. Tom Bradshaw, NFU president, said it would “make it harder for farmers to stay in business”, citing worries about how the rule would affect small family farms and tenanted holdings.

The 100-page autumn Budget document also announced that Defra would allocate £2.4 billion to agriculture for the next financial year in England, with a total of £5 billion over the next two years. This includes £60 million for the Farming Recovery Fund in 2024/25 to support those impacted by Storm Henk. Overall, there is a real terms increase in Defra’s overall budget of 2.7% per annum for the next two years, but the farm and environmental support element is fixed at £2.4 billion so it is continuing to fall in real terms.

Other UK announcements included an increase to the minimum wage and an increase in employer national insurance contributions to 15%, with the contribution threshold lowered to £5,000 from £9,100. Measures to limit the impact on those with just a few employees were improved. Following a u-turn on their status this February, a further change means double-cab pickups will be classed as cars rather than vans from April 2025. This means their treatment for capital allowances and benefits in kind purposes will be less preferential.

Capital gains tax has been increased from 10% to 18% for the lower rate and from 20% to 24% for the higher rate, with the new rate effective immediately. Rates for business asset disposal relief (formerly entrepreneurs’ relief) will increase to 14% in 2025/26 and 18% in 2026/27. Our rural policy snapshots for England and Scotland overview the key policies and Budget announcements affecting the rural sector.

ENVIRONMENT & NATURAL CAPITAL

Hedgerow consultation on sanctions for mismanagement
The Management of Hedgerows (England) Regulations 2024 were introduced earlier this year, replacing previous cross-compliance hedgerow management rules. The new regulations are enforced by the RPA and state that anyone managing hedgerows is prohibited from cultivating or applying fertilisers or pesticides within two metres of the centre of a hedgerow. Additionally, trimming of hedges is not allowed between March 1 and August 31. According to the legislation, the RPA can initially issue compliance notices and if non-compliance continues, it can subsequently impose a monetary penalty. The consultation, which will run until 10 December, is looking at a new approach to enforcement that would allow the use of civil and criminal sanctions for those in breach of the rules.

Targets set out for “30by30” initiative
In 2022, at the COP15 biodiversity summit, the UK committed to joining “30by30,” an initiative to protect 30% of the UK's land and sea by 2030. The government is now implementing the target and has announced its criteria for the 30% of land that will make up the area. The criteria focus on three themes: 

• Purpose: 30by30 areas should be able to demonstrate that their management objectives will ensure the delivery of in-situ conservation outcomes
• Protection: 30by30 areas should be able to demonstrate that in-situ conservation will be sustained over the long term (at least 20 years) and the area will be protected against loss or damage
• Management: 30by30 areas should be effectively managed and able to demonstrate overall progress towards in-situ conservation outcomes.

Now these criteria have been set out, the next steps for 30by30 will be to enable additional land to contribute to the project in England. The land will be brought forward by land managers and approved by Natural England. The government has confirmed that 30by30 will be part of the land-use framework and that the initiative will be “enshrined” within the imminent update of the environmental improvement plan.

New chair for Dartmoor Land Use Management Group
Phil Stocker has been selected as the Independent Chair of the Dartmoor Land Use Management Group. He is tasked with creating a long-term land-use plan to preserve the cultural heritage and enhance food production on Dartmoor. Mr Stocker has over 40 years of experience in agriculture and roles in organisations like the National Sheep Association and Soil Association; he brings expertise in sustainable land management and stakeholder coordination with a progressive view on balancing food production with nature’s recovery.

The group is designed to discuss issues such as food security and diversity preservation. It will oversee 25 recommendations from the recent Dartmoor Independent Review. The initiative has support from Defra and various environmental and farming leaders who aim to secure Dartmoor’s environmental and economic future.

PROPERTY & DEVELOPMENT

Study reveals factors affecting rural housing supply
A lack of sites, delays in planning, community suspicion and insufficient grant funding contribute to a lack of rural housing. A new report conducted by Rural Housing Solutions and Trent & Dove also found fewer housing associations are willing to develop small rural schemes. In a survey of 63 local authorities, 46% had experienced a reduction in Registered Providers (RP) activity on rural schemes between 2020 and 2022, while 48% reported no RP activity on Rural Exception Sites. In mainly rural local authority areas, the proportion rose to 63%. To solve the issue, the report recommends:

• A ‘rural multiplier’ so developments in areas with populations under 3,000 receive financial support
• A Rural Champion within Homes England to oversee rural housing strategies
• A Rural Exception Site Planning Passport to speed up the planning process for rural housing schemes
• Encouraging the adoption of enhanced local planning resources for rural schemes
• Ensuring housing enablers have the resources they need to provide consistent support.

Scotland: improving the planning for large energy projects
A consultation on changes to the planning system for large energy projects in Scotland has been launched. It proposes several reforms:

• New standardised processes to engage with local communities and stakeholders before submitting applications
• Set criteria for challenging decisions and a six-week time limit for raising objections
• Reforming the public inquiry process; inquiry sessions will still be held, but other forms of decision-making will be deployed on a case-by-case basis
• New powers to allow the Scottish Government to revoke, suspend or vary project consents
• A power to charge developers for submitting wayleave applications for overhead lines on private land.

The consultation will run for 4 weeks until 29 November.

BUSINESS & economy

Carbon border adjustment mechanism from 2027
The government has announced the Carbon Border Adjustment Mechanism (CBAM) will be implemented in January 2027. This mechanism will impose a carbon price on high-carbon goods imported into the UK from the aluminium, cement, fertiliser, hydrogen, iron, and steel industries. By applying this carbon price, imported goods in these categories will be required to match the carbon costs of domestic products, thereby supporting the UK’s climate goals.

The mechanism will apply to direct and indirect emissions and certain precursor emissions found in imported CBAM products. Given the specific mention of fertilisers, the mechanism could impact the agricultural sector. Ammonia, nitrate, mineral, and chemical fertilisers are all listed within the mechanism's scope in the consultation response document.

Oil and gas ruling updated
In June, a Supreme Court ruling required operators to consider the impact of burning oil and gas in Environmental Impact Assessments (EIA) for oil and gas extraction projects. The government has now launched a consultation on draft supplementary EIA guidance for assessing the effects of scope three emissions on climate from offshore oil and gas projects. The original case concluded that Surrey County Council’s decision to grant planning permission for the oil development was unlawful because the end-use atmospheric emissions from burning the extracted oil were not assessed as part of the EIA. The consultation closes on 8 January 2025. The government will also consult separately on its commitment not to issue new oil and gas licences.

OTHER RURAL NEWS

And finally… Cow gives birth to quads
A dairy cow having a quadruplet pregnancy is estimated to be one in 700,000 and the chances of them being delivered fit and healthy are believed to be one in 11 million. Yet it’s happened. A bull and three heifers were delivered at Calcourt Farms in Wernllwyd, Powys. Matthew Hicks, the farm’s fertility manager, said they knew the cow was carrying twins but said he wondered what was going on; "I’d been at the pub, and it is quite common for me to come home seeing double, but on that evening I definitely hadn’t drunk enough." He added "It’s luck really and I did buy a lottery ticket, but obviously I’m still at work so that didn’t quite pay off." The calves are now with the other newborns and the mother is said to be doing well, needing a bit more TLC and plenty of fluids but blissfully unaware of how famous she is.

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