Budget under fire for ‘nothing to support farming community’

Mar 14 2008 by Sam Wood, The Journal

FARMING LEADERS have said Chancellor Alastair Darling’s first budget contains a “wealth of missed opportunities” for the industry.

NFU Mutual financial planning specialist, Shelagh Hamer, said there was nothing in the budget to support the farming community.

She said: “A number of simple measures would have provided a real boost for farming families. The £3,600 threshold for non-earners pension contributions has not increased since its introduction in 2001, and is falling way behind the level needed to meet the retirement needs of rural people.

“It seem completely illogical not to have brought this limit into line with the newly increased ISA allowance.

“It’s also a real worry for country people that there is no mention of their special transport needs in the announcement of a review of Vehicle Excise Duty in 2009.

“The plain fact is that country people need vehicles to get about. Public transport is simply not an option in most rural areas, while farmers often need powerful 4x4 vehicles to get about their farms and tow trailers. Sadly there is nothing in this budget to support the farming community.”

Meanwhile, the National Farmers Union welcomed the postponement of the increase in fuel duty but expressed unease at what it said appears to be a strong undercurrent of hostility to biofuels in what was supposed to have been a “green” Budget.

NFU deputy president Meurig Raymond said: “We are relieved the Chancellor has listened to the voices from across the whole spectrum of industry, transport and farming that were urging him not to add fuel duty to the fire of inflationary cost increases. However, we still believe the increase should not merely be postponed, but scrapped altogether, and we will continue to lobby for that outcome.

“In the meantime, we can welcome the confirmation from the Treasury that, in response to a long-standing NFU campaign, any increase when it comes will be applied pro rata to red diesel. If the current 2ppl general increase is applied in October, it would mean a rise in duty on red diesel of 0.38ppl. However, we are concerned at what appears to be a strong undercurrent of hostility and lack of understanding to British produced biofuels, which runs through the Budget small print. The loss of the biofuel duty differential of 20ppl in 2010 creates investor uncertainty, and the lack of clarity on how long the Renewable Transport Fuel Obligation will be in place after 2010 is further stifling investor confidence in financing multi-million pound biofuel plants in the UK.

“There are other worrying indications that ministers and officials are paying too much attention to the myths that surround biofuels and not enough to the facts.

“For example, there is no mention in the Treasury document of the potential for UK sustainably-grown wheat and sugar beet to be used for biofuel feedstock and the CO2 savings quoted use the 15–25% international figure, rather than the 50-60% which is the saving achieved by UK grown wheat.

“British-produced biofuels are sustainable and can make a very real contribution to the reduction in greenhouse gas emissions, in transport especially. They should be encouraged by the Government, not undermined.”

Mr Raymond also expressed disappointment that the Government had not responded to the NFU’s repeated requests for a rethink on the proposed withdrawal of the Agricultural Buildings Allowance between 2008 and 2011, and that there were no further concessions on the Capital Gains Tax regime.

However, the announcement of a period of further consultation on the proposal to legislate on “income shifting”, which could potentially have imposed from April significant additional administrative burdens on family farm partnerships and companies, was welcome.