Ahead of this year’s autumn statement, the National Farmers’ Union (NFU) has written to Chancellor of the Exchequer Jeremy Hunt to ask him to provide the “ever-increasing” certainty that the farming sector seeks.
NFU president Minette Batters’ overarching message to the chancellor ahead of the autumn statement was that running a food and farming business at the moment is “tough”.
Hunt is set to unveil his autumn statement to the House of Commons on November 22, 2023.
Batters said the need for stability and certainty in the agricultural sector is “fundamental to enabling long-term business investment decisions”.
“At this year’s autumn statement, the chancellor could really inject some much-needed stability and confidence into the UK’s food and farming sector,” she said.
“As well as delivering short-term certainty, the NFU’s asks will also help build the foundation for a long-term farming framework, incorporating both public and private finance, to deliver the country’s environmental, productivity and food security needs.”
Energy, ELMs and tax
Batters said that, over the last two years, the UK government has had to intervene to support domestic and commercial consumers access affordable gas and electricity.
“Whilst Russia’s invasion of Ukraine has been a clear catalyst and driver of energy market volatility, the market infrastructure for commercial energy has facilitated extra risk,” she said.
“The NFU is calling for a HM Treasury review into long-term energy contracts in the commercial sector and improved transparency in this market, making it easier for businesses to select which provider/contracts suit their needs.”
The union is also calling on Hunt to “remove the uncertainty” over the tax treatment of agricultural land entered unto environmental schemes, especially under the UK government’s own Environmental Land Management schemes (ELMs).
Currently, agricultural property relief (APR) is available on agricultural land whether used by the owner or a tenant.
“Whilst many of the options available under ELMs in England would not result in land ceasing to be in agricultural use, there is some uncertainty around some options,” Batters said.
“We gathered views from our members and responded to the consultation on APR, stating that the government must remove this uncertainty – or risk undermining the confidence in and uptake of these schemes, as well as the government’s own environmental ambitions.”
Where income tax is concerned, Batters said that she is worried that the requirements imposed on NFU members will be “disproportionate, administratively burdensome and extremely costly”.
“We are asking for concerns around quarterly updates and Basic Period Reform to be addressed and for specific easements be applied to a minority of businesses including removing the quarterly update requirement,” she said.
Environmental markets and the future
Environmental markets are an emerging area of interest to farmers but are currently poorly defined and largely unregulated, Batters said.
“The NFU believes a HM Treasury led cross-government taskforce is best placed to ensure the regulation and oversight of environmental markets in the UK is fit for purpose.
“In order to ensure UK farmers can tap into the potential of new environmental markets, the government must devise effective governance mechanisms as soon as possible.”
Additional topics in Batters’ letter include asks on:
- The slurry infrastructure grant;
- Capital allowances for both incorporated and unincorporated businesses to help incentivise low-carbon investments;
- A further round of the Rural England Prosperity Fund (REPF), with a longer timeframe and expansion to all rural communities.