NFU responded to budget
The NFU has given a positive initial reaction to the budget announcement by the Chancellor Alistair Darling, claiming a number of lobbying successes.
Deputy President Meurig Raymond said the NFU was pleased the Chancellor had heeded the organisation’s call to extend Agricultural Property Relief to agricultural property in other EU States, following a request from the EU Commission.
Other welcome news included increases in the first-year rate of capital allowances for new investments, the creation of a new strategic investment fund for advanced technologies, including green technology and R&D, and a proposal to deliver universal broadband access by 2012, which will benefit farmers and rural inhabitants.
Tenant farmers and landlords were also boosted by the announcement of an amendment to the Agricultural Holdings Act 1986. This addresses the issue of the rent review cycle restarting whenever there is a rate change in VAT.
However, Mr Ryamond described an additional £75 million of savings to be found at Defra as "as sting in the tail". And there was also some concern over the lack of detail in the Chancellor’s announcement of the introduction of new carbon budgets.
The NFU has previously argued that the government needs to take into account the advice of the independent Committee on Climate Change, which has specifically recommended against including agriculture in greenhouse gas targets at this stage because of lack of good data and scientific understanding for non-CO2 GHG emissions.
NFU comment
NFU Deputy President Meurig Raymond said: "This budget sees some positive moves for farmers and growers although the devil will be in the detail for some of the measures. To echo the Chancellor, agriculture can literally help ’grow the UK economy out of recession’.
"Some of the measures announced today will help though it is important that agriculture and horticulture are not over-looked, especially the role they can play in renewable energy.
"However there was a sting in the tail with an announcement that an additional £75m of savings will be found within Defra bringing total cuts to the department of £381million under the Comprehensive Spending Review.
"I do not disagree with the principle of efficient delivery of service. But I am deeply concerned about proposals to ’streamline’ flood defence funding to the EA. This is code for possible cuts which will damage our ability to protect vital productive farmland.
"Moreover today’s statement pre-empts the outcome of the ongoing consultation on cost and responsibility sharing for animal disease citing budget savings of £44m in respect of animal health."
*Further analysis of the measures relating to farming, climate change and tax from the NFU’s experts will be posted on this page later this afternoon*
Budget 2009 at a glance
Delivering his speech to a packed House, the Chancellor acknowledged that the UK was going through the worst economic crisis in 60 years but did expect the economy to start growing again towards the end of 2009. He said: "We want to build on the strengths of the British economy: fairness, opportunity and aiming to grow our way out of recession. There are no quick fixes, there is no overnight solution."
Mr Darling said he expected the economy to grow by 1.25% in 2010 and by 3.5% in 2011 and inflation to be 1% by the end of the year.
VAT reduction will continue until December 2009.
The Budget’s main focuses were to:
help people back into work
support businesses and homeowners facing problems
investing in growth
investing in green indutries of the future
protect investment
rebuild finances
speed global recovery
Job losses and unemployment was a major focus of the speech, with additional £1.7bn pledged for employment support:
From January 2010, everyone under 25 who has been out of work over 12 months offered job or place in training
260m for young people’s training and subsidies
extra investment for 16 and 17 year olds who want to stay in training
54,000 places in sixth forms and colleges
To help kick start the housing market:
stamp duty holiday on homes under 175k extended to end of the year
80m into government-backed shared equity mortgage schemes
’Scrappage scheme’ to kick start motor sales
The sharp fall of new vehicle sales has prompted a new ’scrappage scheme’ starting next month where motorists to get a £2,000 discount on new cars if they trade in cars older than 10 years - this will remain in place until March 2010.
Long term demand for housing:
work with housebuilding industry to help cons companies meet demand
500m of extra support for stalled housebuilding projects
100m for local authories to build energy efficient housing
50m modernisation programme for armed forces housing
Energy and climate change
£1bn to combat climate change
750m investment fund for ’emerging technolgies’ such as digital, biotehnology, r&d, science - Manchester and Leeds to be centres of excellence
energy efficiency measures: cleaner energy offshore wind projects - 525m investment
coal, oil and gas will continue to be a main source of energy, with smaller oil fields in the North Sea to be unlocked
new generation power plants - £435m extra funding for energy efficiency measures
405m for low carbon energy
Other duties / investment pledges:
new measures to help pensioners and savers on modest incomes
extend broadband network in rural areas
fuel duty to increase 2p by December 2009
2% on alcohol from midnight tonight
tobacco: up 2% from 6pm tonight
