Chancellor of the Exchequer Jeremy Hunt has delivered a budget devoid of any reference to farming, food or the rural economy, opting instead to focus on urban centres, childcare support and duty cuts, writes Jane Thynne.
Announcing a £94 billion package to address the cost of living crisis that included a three-month extension of the Energy Support Scheme for domestic customers, as well as duty freezes on fuel and beer, Mr Hunt also revealed that the UK would not enter recession this year and that inflation would be reduced to 2.9 per cent by the end of 2023.
Mr Hunt told MPs that while the Autumn Statement had focused on stability, his actions had allowed this budget to concentrate on growth and innovation. However, farming groups were quick to point out that the new commitment offered little for rural economies.
Mark Tufnell, president of the CLA said: “After 12 years in charge, it is still difficult to see what – if any – ambition the Government has for the rural economy.
Rural businesses continue to be held back by apathy in public policy, not least in the planning system that actively holds back entrepreneurs from generating growth.
“The rural economy is 19 per cent less productive than the national average.
Closing this gap would add £43 billion to the national economy. Nothing in this budget will unlock that vast potential.
The Government needs to show it is on the side of hard-working rural families and business owners, that it matches their ambition and is serious about growing the economy. They need urgently to come forward with a robust plan that will remove the considerable barriers rural businesses, and communities, face to their future success.”
Mr Hunt also revealed that £22 billion was being set aside to develop the UK’s carbon capture sector, saying that schemes would take place from ’East Anglia to Merseyside’ in order to ensure energy security and Net Zero goals were reached.
The Chancellor’s ‘Back to Work Budget’ was broadly welcomed by NFU Mutual which said pension changes that include scrapping the lifetime allowance and increasing the annual allowance from £40,000 to £60,000 would help farmers plan and address succession issues.
Sean McCann, chartered financial planner at the insurer, said: “Pensions provide an independent source of income in later life separate from the farm, which makes it easier for farmers to gradually step away and hand over more of the day to day management to the next generation.”
However, Mr McCann added: “Elsewhere, it was disappointing to see the Chancellor leave income tax and child benefit tax thresholds frozen until 2028. With inflation still raging, these stealth taxes will leave many people with less money in their pockets in real terms.”
As part of this year’s budget provisions, the Treasury also announced a call for evidence on the scope of Inheritance Tax Agricultural Property Relief which will consider how the use of land to deliver both agricultural and environmental outputs can be accommodated within the relief and secondly, whether the availability of the relief to agricultural landlords should be restricted only to those letting land on a long-term basis subject to any necessary exclusions.
This move has been welcomed by TFA chief executive George Dunn who said: “The TFA warmly welcomes the call for evidence on both these aspects of agricultural property relief. If tenant farmers are going to be able to take part in new public and private schemes for environmental enhancement, the tax status of the land they use for these schemes must be clarified.
“However, most importantly, the TFA has for years argued that landlords should be encouraged to let land on longer terms by restricting the availability of agricultural property relief only to those landlords prepared to let for 10 years or more. This has formed the basis of the TFA’s budget submissions year after year.
About the Author: Jane Thynne is a writer for Farmers Guardian.