Some good news but no clarity to help plan post-Brexit futures

Chancellor Philip Hammond delivering his Budget statement to MPs in the House of Commons, London. Picture: UK Parliament/Jessica Taylor/PA Wire
Chancellor Philip Hammond delivering his Budget statement to MPs in the House of Commons, London. Picture: UK Parliament/Jessica Taylor/PA Wire

The National Farmers’ Union (NFU) has welcomed elements of Chancellor Philip Hammond’s Budget, which was announced on Monday. However, the group feels the announcement lacked clarity about what the industry could face post-Brexit.

This is the last Budget before Brexit in March 2019 and there were a number of items that were welcomed by NFU.

Responding to the Budget statement, NFU President Minette Batters said: “As we move ever closer to leaving the EU, farmers and growers are still seeking assurances and clarity about the environment they will be operating in. In these times of uncertainty, policies that support sustainable farm businesses are crucial.

“The announcement that the Government will introduce a new Structures and Buildings Allowance for non-residential structures has gone some way to meet our call for tax relief on investment in farm infrastructure and will help farmers invest in modern, efficient buildings.

“The NFU also welcomes the increase to the Annual Investment Allowance to £1m but we are disappointed it is time-limited for two years.

“We are pleased to see that there is a significant £200m investment in piloting new solutions to deploy full fibre internet in rural locations. It is vital that this is not a one-off investment and it must be part of a continued effort to deliver better connectivity for all rural businesses.

“According to the latest NFU survey, 59% of farmers felt the broadband speed they received was insufficient for their business. We hope that this investment in the National Productivity Investment Fund will be used to address the digital divide between the countryside and urban areas.

“The announcement that the National Living Wage will increase by 4.9% is substantially more than the sector expected and comes at a time when farm businesses are faced with a rising cost base. We will continue to engage with the Low Pay Commission on this issue.”

She added: “It is vital the strategic importance of the farming industry that provides the raw ingredients for the UK’s largest manufacturing sector, food and drink, which generates £113 billion for the economy, is properly recognised and valued by the Government.”

In his assessment of the Budget, Tim Price, Rural Affairs Specialist at NFU Mutual, said that at first glance, there was not a lot for farmers to get excited about – but there are a few measures which will ease tax bills, adding: “It’s a huge relief that the Chancellor avoided increases in duty on petrol and diesel which would have hit country people very hard.

“There was good news for self-employed farmers and all those working as employees that the Chancellor has stuck to the Tory’s promise to keep increasing personal tax allowances. The amount of income that can be earned before paying tax will increase to £12,500 and the higher rate won’t kick in until an income of £50,000 is reached – which means a few hundred pounds more out of the taxman’s grasp.

“Apparently there’s no ‘sting in this tail’ on the widely forecast pension contribution cuts and Inheritance Tax changes which would have hit self-employed farmers hard at a time of tightening belts in agriculture and the food chain as Brexit approaches.

“Let’s hope a big chunk of the Chancellor’s £420m pothole fixing fund finds its way to fix our rutted and crumbling rural road network.

“The Chancellor’s announcement of £10m funding for Air Ambulance services is good news for farmers and country people – those living in remote areas need these services most as they face long trips to get to hospitals if they are involved in an accident or are seriously ill.”

There was some good news for food and drink producers, which was welcomed by Ian Wright CBE, Food and Drink Federation Chief Executive.

“Food and drink manufacturers – 97% of whom are SMEs - will welcome the Chancellor’s announcements on productivity, exports, infrastructure, enterprise, business rates, investment and entrepreneurs,” said Mr Wright.

“FDF is particularly pleased to see our representations on the way the Apprenticeship Levy operates have been listened to and acted upon.

“While we are committed to reducing packaging waste and working with Government, today’s new tax on plastic packaging will result in significantly increased costs for UK food and drink manufacturers, due to the input costs required to produce food-grade recycled packaging.

“However the shadow of Brexit, and in particular a ‘no-deal’ Brexit, hangs over the food and drink industry and gets darker every day. While that remains the case, it is hard to see how we can long continue with business - or politics - as usual.”