This could change if Reform comes to power after the next election, but even what was the Brexit party must know from opinion polls, linked to the state of the economy, that isolation from the EU is more of a vote loser than a vote winner.
December brought the return of the UK to the Erasmus programme that allows students to spend a term overseas as part of their education. In January, Sir Keir Starmer moved things up a gear. He suggested he wanted closer ties with the EU, but then went further than before in setting out how that might work. He wants to go beyond a customs union to full membership of the EU single market. This suggests he has ideas around joining countries like Switzerland and Norway in the European Economic Area. That goes beyond a customs union, which Labour ruled out in its manifesto, but opinion polls suggest it would go down well with a majority of voters, especially the ‘working families’ Labour is committed to supporting. This is a long way from any referendum on rejoining the EU, but it would minimise further damage to the economy from Brexit on the terms delivered by Boris Johnson and his then supporters.
This week also saw Starmer very much at the top table in the EU, when he was central, with France, in the ‘coalition of the willing’ to support Ukraine now and in any peace settlement. He has also risked alienating Donald Trump, and is facing new threats of tariffs by backing the European ‘hands off’ line on Greenland. This is an environment where Starmer feels comfortable and the UK involvement should remind the EU of its fundamental error in letting the UK, as globally accepted diplomats, leave the EU.
This was in no small measure down to the EU and its member states failing to recognise the threat for the EU in assuming the leave option in the referendum would be easily defeated. Instead, it left the then PM, David Cameron, isolated with no concessions to sugarcoat his remain case.
For agriculture, Brexit has had no real impact. Indeed, any impact has been negative in that farmers have lost political influence and ended up with support structures less financially attractive than the CAP and facing more rather than less bureaucracy. The EU remains our biggest export market for food and the UK the biggest for the EU. All Brexit has done is add red tape and costs, which in a competitive market can only reduce margins. At the same time, it has denied the UK access to overseas markets it had reduced or tariff-free access as an EU member state although with the Mercosur deal with South America set to be ratified by the EU after more than 20 years, that might be a bullet worth dodging for now.
Replacement post-Brexit deals, for example with the southern hemisphere, have offered little for farmers in terms of export potential, but have left farmers here with less protection against imports than those in the EU.
On the theme of politics, the pre-Christmas change to inheritance tax for farmers and small businesses was welcome. It was interesting it was slipped out by a junior minister – there was no sense Chancellor Rachel Reeves had any regrets about the wrong-headed policy she championed and defended for more than a year.
And there was no statement from her boss Keir Starmer, who defended a bad decision for a long time.
This leaves two questions about IHT. The first is why the announcement was rushed out for Christmas. The only logical answer is backbench pressure from Labour MPs representing rural constituencies grabbed from Conservatives in 2024. The government is driven by backbench opinion and this time it suited farmers.
The other question is whether the new £2.5 million figure could be increased to a more realistic figure around £5 million.
This is a huge challenge for the farming lobby and one where success is not guaranteed – that said, they have already won against the odds.
What they need to press for now is a higher threshold for family farms and no concessions beyond that for anyone using farm land ownership solely as a way to avoid inheritance tax.