NFU says Pre-budget report has limited value for agriculture

The NFU has described today’s pre-budget report as ’of limited value’ in helping agriculture play its part in driving forward an economic recovery.

The package, which includes a comprehensive set of measures designed to boost short-term household income, spending and business contains a number of welcome provisions.

However, it by and large by-passes the measures that would have set farming in good stead during a downturn.

Commenting on the PBR, NFU President Peter Kendall said: "Our acid test for today’s pre-budget report is whether it will overall boost the competitiveness of UK agriculture and the agri-food sector. We will need to study the detail carefully but overall we would find it hard to come to this conclusion.

"Still, there are a number of commendable parts to the Chancellor’s statement, together with some matters of concern but several missed opportunities. It is good to see Government as a whole focusing on how it can boost small and medium sized enterprises as a cornerstone to economic recovery.

"Farming is an integral part of the SME community and in this respect we welcome proposals for a temporary tax relief on vacant property, to delay the payment of tax bills, to introduce a substantial small business finance scheme and allowing SMEs to offset losses against profits made in the past three years.

"On the other hand, we are concerned that an increase in employers’ national insurance contributions by 0.5 per cent from April 2011 could adversely impact on competitiveness. Proposals to delay and decrease the rate of increase of higher Vehicle Excise Duty (VED) for 4x4s are welcome - these proposals would have disproportionately impacted on farmers who rely on such vehicles in their businesses.

"The report recognises the importance of stimulating investment in renewable energy and therefore the decision to extend the renewables obligation by a further 10 years to 2037 is welcome.

"It is a shame however that the Government appears again to have ignored our plea for greater fiscal incentives to encourage farmers to invest in environmentally beneficial capital works through a reintroduction of the agricultural buildings allowance (ABA).

"Although Government at this time must play a decisive role in stimulating economic recovery, it is industry itself that will be the driving force. Farming can play an appreciable part in this, provided it is not encumbered by unnecessary regulatory burdens, has the backing of the banking sector and a much greater appreciation from its retail customers."