Farmers’ groups give mixed response to Budget

THE Chancellor’s Budget has come under fire from farmers’ groups.

The National Farmers’ Union (NFU) said it was a “missed opportunity” for the Treasury to introduce measures which might have helped farmers capitalise on growing confidence in the industry.

The Country Land and Business Association (CLA) in the East hit out at the Government’s decision to press ahead with a planned fuel duty rise in August.

Meanwhile, land agents Strutt & Parke’s Ispwich office said the new levels of Stamp Duty Land Tax may concern many owners of farms and estates, as most farms are worth more than the �2million threshold, and some are held by companies - but it believes they will not be affected.

Chancellor George Osborne said stamp duty from midnight last night homes worth more than �2m will be 7% and, if bought through companies, 15%.

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But Giles Allen, of Strutt & Parker’s estates and farm agency department in Ipswich said: “Legal speculation is currently that when the detailed legislation is published, it is likely it will stick with the existing definition of residential property. This means that non-residential or mixed use properties (which farms and estates qualify as) will not be termed ‘residential’ and therefore the Stamp Duty Land Tax will remain at the existing 4% on these properties.”

The CLA in the East said the Government needs to be aware of the impact the fuel increases have on families and businesses, especially in out-of-town areas.

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The 3.02 pence per litre fuel duty increase will take effect on 1 August as planned, which will take the price of diesel up to �1.50 per litre. The price of petrol will go up to 145p a litre.

Rob Wise, of the CLA, said: “These latest hikes will hit everyone but many people who live in our region’s countryside feel held to ransom with fuel prices.

“Families and rural business owners rely on their cars because of poor public transport and they will be hit hardest because motoring makes up a larger element of their total living costs.”

NFU President Peter Kendall said: “Chancellor George Osborne was right to focus on growth and I was pleased to see measures that could create a more competitive business environment in the UK. In particular, the Chancellor’s ambition to increase UK exports over the next decade to �1trillion should benefit farmers who are the backbone of a food and drink industry which constitutes our biggest manufacturing sector. I was also interested to hear that Michael Heseltine will be conducting a review into how spending departments interact with the private sector to deliver pro-growth policies, and I look forward to more details.

“The Treasury has also mentioned a couple of imminent announcements which I await with interest – the review of the Habitats Directive to be published this week, and the National Planning Policy Framework (NPPF) due out next week. I was pleased that the Chancellor confirmed the latter will contain a commitment to permitting sustainable development, something we welcomed when the draft policy statement was published. Both announcements could contribute to reducing the regulatory burden on farmers, freeing them up to invest and making their businesses, and the industry as a whole, more competitive.

“Nevertheless, before the Budget, I called on the Chancellor to bring forward policies that encourage and incentivise private sector investment in farm businesses, and build on the relative stability farmers have experienced since the economic crisis of 2008. Changes to the tax treatment of farm reservoirs, for example, are crucial at a time when farmers need to prepare for scarcer water resources in some parts of the country, while a reversal of the decision to reduce the Annual Investment Allowance (AIA) on plant and machinery to �25k would encourage farmers to invest in the sort of costly machinery needed on modern, productive farms.

“However, these are just a couple of the relatively small measures that seem to have been ignored by the Treasury. In particular with regard to capital allowances, the Chancellor’s focus on giving Britain the lowest corporation tax rate in the G20 ignores those businesses which are not incorporated. This includes a majority of farms – and it is they who will be discouraged from investing by the reduction in the AIA.

“I know farmers will also be unhappy with the Chancellor’s decision not to stop the rise in fuel duty planned for this August, especially as rural areas tend to suffer from higher fuel prices while the price of fuel used on-farm continues to rise dramatically.

“Whatever the economic circumstances, farming must prepare itself for a period of sustainable intensification of food production, allowing us to meet the future needs of a growing population. At the heart of this is the need for farmers to invest in their businesses, in new technology and techniques that will allow them to operate competitive and productive enterprises while minimising their environmental impact. Unfortunately, (the) Budget didn’t do enough to remove some of the barriers preventing farmers from meeting this challenge.”

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