What lies in store for the countryside and the rural economy under the new government?
Elizabeth Truss will continue in the top post at the Department for Environment, Food & Rural Affairs (Defra) and is joined by George Eustice as minister of state and Rory Stewart as parliamentary under-secretary of state.
All three ministers represent diverse rural constituencies. That rural connection coupled with the geographical spread of their constituencies and their individual agricultural and business experience are all to be welcomed in the new ministerial team at Defra. The team’s environmental credentials, however, are not so clear.
The future direction of the rural economy is not, however, dictated by Defra alone. What else does the Conservative manifesto hold for the countryside, aside from a free vote on the repeal of the hunting ban?
Europe
The prospect of an “in-out” referendum on our future EU membership will be the single point of greatest concern to farmers. An “out” majority would see our withdrawal from the common agricultural policy (CAP). An alternative domestic policy for UK agricultural support is hard to discern. UKIP had promised a flat-rate payment of £80 per acre to support the industry in the absence of the CAP, but there is no similar suggestion from the Conservatives. Can farmers survive without the CAP? Would farming life be simpler without all the meddlesome regulations from Brussels? Would the countryside be healthier and more vibrant in or out of Europe?
Financially some farmers could survive without CAP payments. Other economic adjustments might compensate for the loss of the basic farm payment (for example, supermarkets might pay more for their raw materials). The difference between the best and average farmers financially is already more than the amounts typically received in basic farm payment and its predecessor, in some cases by a factor or two or three. So yes, some farmers would survive and even thrive. But this would not be the case for upland farmers. In general, it would be the leaner, fitter and larger farm businesses that would cope at the expense of the smaller ones.
Most in the farming industry will therefore be supporting “in” between now and 2017.
Agricultural policy
The new government has promised a new 25-year vision for British farming, with plans to grow more, buy more and sell more British food. The badger cull will continue as part of the 25-year bovine TB eradication scheme. Developments in genetic modification and pesticides will still be supported under the “science-led” approach.
Flooding, energy, trains and broadband
A major concern for the renewables sector will be the commitment to end public subsidy for all new on-shore wind farms, adding to the risk and uncertainty of investment in this sector. Shale gas extraction (fracking) will continue to be explored.
Investment in flood defences is to continue, with growing interest in “green” defences as a viable alternative to hard concrete structures. This may bring both opportunities and threats to rural land holdings.
HS2 will be joined by HS3 and we may even see reforms to the creaking system of compulsory purchase and compensation once the current consultation exercise has closed. Any reforms are unlikely to be seen until well into the new parliament, and they are more likely to be sticking plasters and bandages than the fundamental reform so badly needed by our compulsory purchase code.
The manifesto pledged 95% superfast broadband coverage by 2017. The remaining 5% will almost certainly be in the countryside somewhere, although a voucher scheme has been promised for this rump.
Inheritance tax
Complicated changes to the inheritance tax treatment of family homes will be likely to mean an effective inheritance tax threshold of £1m for married couples and civil partners. This has been billed as a rise in the threshold to £1m, but if you are unmarried or you don’t own your home it probably won’t be that simple or that high. This might put further pressure on the inheritance tax treatment of farmhouses.
The vexed question of how to define a farmhouse and how to assess its agricultural value for agricultural property relief (APR) has been well-aired in recent years. A rise in the general threshold might just provide the excuse to dump APR on farmhouses altogether. This could cause problems where the “farmer” no longer lives in the farmhouse but still owns it.
The return of the Conservatives also means that the major rating review will continue and should mean that a mansion tax is off the agenda for the time being.
Planning and housing
National parks, green belts, and areas of outstanding national beauty will continue to be protected and 200,000 new starter homes are promised via incentives for development on brownfield land. The right to buy is extended to housing association tenants. This could have worrying implications for the countryside, where the lack of affordable housing is a serious problem in most areas. With relatively little housing association stock available the loss of even a single unit in a village through the right to buy will deplete a vital facility yet further. Local planning involvement will be fostered: landowners will need to take care to work closely with these interests. Locally-led garden cities may provide opportunities for some.
Natural capital
The work of the Treasury’s Natural Capital Committee is promised to continue until at least 2020, to create a 25-year plan to restore UK biodiversity. This is likely to involve payments for natural services and a continuing emphasis on the valuation of natural capital. Both could be great opportunities for valuers and land managers, brave enough to grasp them.
Charles Cowap is a rural practice chartered surveyor
