A decade of economic decline in France has been symbolised by protesting farmers assembling in long lines of tractors and bringing major cities to a standstill. This week, the UK is set to experience similar demonstrations when British farmers stream into central London to oppose the government’s October budget.
Outwardly, Prime Minister Keir Starmer is phlegmatic about the oncoming mobilisation against his administration. Politically and economically, however, he would be well advised to view these protests as a long-term threat to his credibility.
All roads appear to be leading to an agricultural crisis in the UK over the next few years. With it, the country is about to take another knock to its resilience – one that it is not well set up for after setbacks on so many other fronts in recent years.
When the farm vehicles descended on Whitehall on Tuesday, the banners demanded a change in the inheritance tax applied to farms. The price of agricultural land has soared as a store of wealth over the past few years, and landowners have been able to pass on farmed land free of tax. But farmers will have to pay 20 per cent of tax on inherited agricultural assets worth more than £1 million ($1.3 million) from April 2026 under changes announced in the budget.
The move has been vocally condemned by, among others, James Dyson, who ranks among the top 10 landowners in the country. Another rallying point for the backlash against the budget is Jeremy Clarkson, the former host of the Top Gear television series, who turned his own farming operation into an Amazon Prime streaming hit.
Mr Clarkson is now happy to lead a protest movement against the Labour government’s supposed war on the countryside. There are some who murmur that his larger-than-life personality and common-sense views could make his entry into frontline politics a Donald Trump-esque moment for the UK.
Hence, the dangers for Mr Starmer are wider than the routine facing down of demonstrations against the budget pushed by a new government. It’s also worth pointing out that when this year’s general election gave the Labour party a huge sweep of 412 seats, about a quarter of them came from rural areas.
Labour has trodden this path the last time it was in government. At the turn of the century, when Tony Blair was in his pomp, the countryside felt equally aggrieved by the first measures from his government and went on the march as well.
Ann Mallalieu, a veteran in the governing party and now chairwoman of the Countryside Alliance, an umbrella group for rural interests, says that people she knows – including her own relatives – are bitter about the new tax. They are even telling her that they regret voting for Labour in July.
Farmers, meanwhile, are threatening to destroy or withhold output to cause bottlenecks in the UK supply chain. Key for Mr Starmer is not just how much of this blowback cuts through to the public but whether it has a knock-on effect on the economy.
Agriculture ranks in the low single digits of the UK’s gross domestic product, something that is not hugely surprising in a nation that pioneered the Industrial Revolution. At the same time, supplies of certain local produce could affect commodity prices, especially at time when a rise in food prices at supermarkets is one of the more troublesome legacies of the recent bout of inflation.
A return to double-digit inflation of 2022 and 2023 is seen as unlikely by economists, but memories are fresh. Rising prices can lead to toxic politics, something that is on everybody’s mind since Mr Trump’s election victory in the US this month.
The weakness of agriculture is something Mr Starmer and his Labour party should be addressing, instead of injecting new antagonism into the situation.
Two decades of asset price inflation in the countryside has done the UK little good. Farmers who are forced to lease land, and not buy it, have less scope to invest in new technology, superior crop planning and better land management. Those farmers who own the land and face an inheritance tax raid have less incentive to invest as a result of the budget changes.
The long-term countryside story has been one of mono-agriculture and a failure to keep up with innovation and technology in the industry, notwithstanding the shiny impressive tractors that will be broadcast on TV screens on Tuesday.
Labour is also imposing additional pressure on agriculture that stems from another failure of the Conservative government over the past 14 years: climate mitigation. The push to meet net-zero targets has prompted Secretary of State for Energy Security Ed Miliband to harness an onshore footprint for wind and solar renewable energy generation in the UK.
Pandering to their base while in government, the Conservatives had essentially banned such developments, largely on the grounds of ugliness – which is a contentious assertion in the first place.
The current government’s climate initiative comes as it is pushing for growth from scrapping planning laws that hamper developments through zoning. It has prioritised building 1.5 million new homes by 2029, adding significantly to the existing stock on 30 million dwellings.
A Trump presidency puts a free trade agreement with the UK back on top of London’s political agenda. Washington’s price for such a deal is opening up the UK market for US food exports.
Farmers, therefore, can be forgiven for feeling the pressure that is coming from all sides. The current pinch is all the more emotionally laden because of the demographics, with almost 40 per cent of farmers over the age of 65, according to UK government figures.
The bigger picture is that the country desperately needs a shake-up in its agriculture industry. It needs one that is all about food security and higher investment. But the revolt shows how the opposite pressures are the prevailing winds for the protesting farmers.
