Saturday comment: Westminster government tinkers at the edges

​The big problem is that with borrowing out of control it has limited resources to act. It is however being strategic in its efforts to ease the pain of higher prices for consumers, but they are a classic mix of good and bad news for farmers.

On the basis that positives are the better choice to focus on, the cut in excise duty on red diesel is certainly welcome. In cash terms it is not enough to offset the Middle East driven rise in oil prices, but the reduction represents a third of the duty and that is a welcome and essential gesture. In the same vein the decision not to impose a green five pence tax increase on fuel is a sensible idea – although it remains a problem delayed rather than a climb down from green taxes thinking. Widen the lens from domestic to European policies and it is clear the present leadership of the Labour party wants to set a high bar for any new leader on better relations with Europe.

This in some ways reopens the Brexit battle nearly ten years on, but it would create a real point of difference between Labour and Reform. It would then be up to it to prove to Labour voters swinging towards Reform – formerly the Brexit party – that a better relationship with the EU would improve economic prospects and employment.

In response Reform will claim Brexit has failed because of political failure to seize the opportunities it presented. That argument will be at the heart of political battles in the run up to a general election. The government has allowed a debate to begin on a single market structure for industry which would include agriculture and food. This would be dancing on the head of a pin in terms of the manifesto commitment in 2024 not to rejoin the single market or a customs union.

However agriculture has never really left that single market in terms of standards or market access.

Brexit or no Brexit, the EU remains our biggest export market for food and vice versa for the EU. Brexit only made trade more cumbersome and bureaucratic. On the negative side of the equation was a simple gesture on the cost of living. This was the suggestion that duties on some food imports could be reduced to ease prices.

This is limited to products removed from UK agriculture, at least for now. But this is dangerous thinking if the government decides to use the freedoms of Brexit to make trade deals already in place more generous for beef, pork and lamb.

That is something the industry will need to keep a close eye on. It comes on top of already murky politics around efforts to persuade supermarkets to cap the price of some food such as bread, milk and eggs.

That was never going to happen, as it was unaffordable, but it has painted food suppliers the bad guys in this argument.

Rejection of that idea paves the way for the government to claim the alternative might be to ease restrictions on imports.

In the May elections the Labour party was punished for issues that were not in its gift to resolve. It got no election rewards for maintaining welfare payments, but is being punished for a cost of living crisis driven by a war in the Middle East it rightly refused to enter. Such is the reality and unfairness of politics and voter opinion. Economic logic is rarely part of the equation.

What this has all done is ensure that it has become even more difficult for farmers, food processors and indeed retailers to secure the price increases they need just to stay still in response to rising costs.

The government has taken some baby steps on fuel prices, but the big cost driver remains the availability and cost of fertiliser.

The EU is taking steps to ease this problem, because it fears farmers will use higher food prices to justify cutting fertiliser use and productivity. Brussels rightly sees this as a threat to European food security. But as the Westminster government tinkers at the edges with some moves on fuel costs it does not appear to have taken on board the threat to national food security – a threat that cannot be tackled by cutting duties on food imports.