The NFU has welcomed some elements in Chancellor Jeremy Hunt’s Spring Budget, but said it doesn’t go far enough in offering stability for agricultural businesses, growth in food production and decarbonising the sector.
The headline announcements included a 2% reduction in National Insurance for the self-employed, while there was also an extension to agricultural property relief (APR).
NFU President Tom Bradshaw said these and other parts of the budget could offer some benefits to agricultural businesses, but said the Chancellor has missed an opportunity to deliver resilience for food producers.
“We welcome the government backing the NFU’s call for the extension of APR to land in Environmental Land Management (ELM) schemes as it will remove a barrier of entry for a number of farm businesses and give farmers more choice about how to use their land. But the extension of this beyond ELMs may have an adverse impact on food production and farm tenancies and we will work with Treasury to assess those implications,” he said.
As well as applying to ELMs, the NFU understands that this relief would also be given for other environmental land use and could impact the level of productive farmland being removed from agricultural use. “We will therefore be looking closely at any impact assessment,” it said.
It warned that it could also incentivise owners to take land out of farm business tenancies and private investors to purchase land to enter into environmental schemes.
“Agricultural businesses are facing a challenging economic backdrop, with input costs at persistently high levels and at least a 50% reduction in direct farm payment support due this year. The announcement on the abolition of the Furnished Housing Letting regime is a significant concern as it’s an important source of diversification for farm businesses which underpins resilience. We will be looking to engage further with Treasury on this announcement,” Mr Bradshaw said.
Mixed bag
Country Land and Business Association President Victoria Vyvyan said the association was ‘pleased he government has listened to our calls for agricultural property relief to be extended’.
“This is welcome news and will help farm businesses deliver environmental benefits as well as food production,” she said.
“But it’s not all good news. Rather than helping the tourism sector by permanently reducing VAT to make rates internationally competitive, the Chancellor is squeezing holiday let owners and stifling businesses that create jobs and support the rural economy.