DOUBLE budget HIT FOR FARMERS is huge disappointment

The NFU believes a higher rate duty band for high-emission vehicles penalises farmers whilst doing nothing to address the issue of 4x4 use in urban areas.

Proposals announced by Chancellor Gordon Brown will see vehicles with the highest carbon emissions penalised with a new £210 Vehicle Excise Duty (VED) rate, an annual increase of £50. This move appears aimed at the urban use of 4x4s but the NFU believes it will have the most severe impact on farmers who rely on these vehicles during their working day.

When coupled with the announced increase of 1.25 pence per litre for red diesel planned to be introduced from September 1 2006, the VED announcement completes a Budget double hit for farmers.

NFU President Peter Kendall said: "We were extremely disappointed to see that no exemption was made for farmers who rely on 4x4 vehicles for their day-to-day livelihood. We would have liked to have seen the Chancellor differentiate between those cases in which a higher tax rate is used as an incentive for people to choose the more friendly option, and those cases in which we are not talking about choice but necessity."

Commenting on the Budget's implications for farmers in the East Midlands, regional director, Jack Ward, echoed the NFU President's comments.

He added: "The budget has also included an announcement that rebated fuel duty will be increased by 1.25 pence per litre, taking effect from 1 September 2006. The NFU will be writing to the Treasury seeking an explanation for this, and seeking an exemption for agricultural vehicles."

The NFU is also disappointed that the Government did not do more to encourage the use of biofuels. Gordon Brown announced that biofuels use could go beyond five per cent by 2010, a move welcomed by the NFU, but failed to expand on the situation in relation to biofuels beyond the end of the decade.

Mr Ward added: "What we must ensure, with the Government's support, is that biofuels manufactured in this country are not substituted by imported bioethanol from Brazil, produced by cutting down the rain forests and shipped halfway around the world."

The Chancellor's announcement of a modest rise in inheritance tax threshold to £325,000 is welcomed by the NFU, but not seen as sufficient assistance for farmers in relation to this issue.

Mr Ward said: "We should not forget that farmers are business people who require a stable macro-economic environment in which businesses can operate."