Countryside Alliance demands fuel tax cuts as rural areas face mounting costs

Rising fuel costs are squeezing farmers and rural households, prompting the Countryside Alliance to demand tax cuts from Chancellor John Healey ahead of the autumn budget.

The organisation has written to the Chancellor outlining 10 measures it wants introduced on 28 October, including making the 5p fuel duty cut permanent and temporarily reducing VAT on petrol and diesel.

The demands follow a sharp rise in fuel prices, with average UK diesel costs reaching a record £2 a litre on 2 October, according to the RAC, before dipping slightly below that level a week later.

Farmers are also facing rising machinery costs, with figures from the Agriculture and Horticulture Development Board (AHDB) showing its red diesel price indicator increased by more than 50% in the year to September.

Red diesel is subject to a separate, reduced rate of fuel duty, meaning the Alliance's proposed permanent 5p cut relates to road fuels rather than agricultural machinery diesel.

The Alliance warns that rural communities are particularly vulnerable to rising costs, with many residents and businesses dependent on private vehicles and limited public transport alternatives.

Tim Bonner, Chief Executive of the Countryside Alliance, said: "With winter approaching, fuel is the most pressing concern. In the countryside a car is a necessity, so making the 5p fuel duty cut permanent and easing VAT would make a genuine difference to household and business bills."

The organisation is also calling for VAT on domestic heating oil to be temporarily reduced from 5% to zero, arguing that rural households reliant on the fuel should receive similar support to those benefiting from the government's temporary removal of VAT on domestic electricity in Great Britain.

Beyond fuel costs, the Alliance wants the chancellor to reconsider inheritance tax relief changes affecting family farms.

It warns that the changes, described by campaigners as the "family farm tax", could make it harder for viable farms in areas with high land values to pass between generations.

The Alliance is also seeking relief on Employers' National Insurance contributions for rural businesses, either through a lower main rate or by restoring the Secondary Threshold to £9,100.

British horse racing is another priority, with calls to reform the Horserace Betting Levy, which raises approximately £108 million annually.

The organisation says betting turnover on British racing has fallen by 19% since 2022/23 and wants affordability checks to be proportionate and developed in consultation with the racing and betting industries.

The Budget demands form part of the Alliance's wider Campaign for the Countryside, launched in Westminster last month with speeches from former Prime Minister Lord Cameron and Labour peer Lord Blunkett.

The campaign followed the organisation's analysis identifying 27 government policies introduced since 2024 that it considers damaging to rural communities, including agricultural inheritance tax changes, National Insurance increases and proposals to ban trail hunting.

According to the Alliance, supporters in 95% of UK constituencies have written to Prime Minister Andy Burnham calling for a "rural reset".

Mr Bonner said: "John Healey’s first Budget is a chance for the government to show it has heard the message from rural Britain."

He added: "After two years in which rural communities across the country have faced damaging policy after damaging policy, many rural people feel they are not being heard. This Budget is an opportunity to change that."

Calling for the government to respond to the Alliance's proposals, Mr Bonner said: "The prime minister has promised good growth in every postcode.

"The measures we have set out are practical and achievable, and acting on them would show that the government is serious about a rural reset."