Farmers react to Budget

THE CHANCELLOR’S Budget has been received with mixed reaction by farmers and the food industry.

Delivered on Wednesday, (Mar 16), George Osborne’s financial plans have been received with mixed reaction by farmers and the food industry.

In what will probably grab the biggest headlines across the industry, the Chancellor has announced a sugary drink levy on soft drinks manufacturers. The Government will consult on how the levy will work and which products will be covered, but there was some re-assurance that it wouldn’t include milk based drinks or pure fruit juices.

Elsewhere a continued focus on corporation tax cuts does nothing to help the 90% of UK farm businesses who are unincorporated and are struggling in the current economic climate. For the next generation of farmers, news that the Government will top up a new ISA saving system (£1 given for every £4 saved) until the saver is 50 will be welcome for those who are in a position to save.

NFU President Meurig Raymond said : “I had really hoped that the Chancellor would have recognised by now that all parts of the economy should benefit from tax simplification, as it is there is little support for capital investment on farm for buildings and reservoirs.”

Mr Raymond continued: “We are disappointed that nothing new was announced to boost the provision of superfast broadband to the last 5%, who are predominantly farmers and those living in rural communities. It’s particularly disappointing that the Chancellor has announced nothing to help mitigate the additional costs and pace of introducing the national living wage from April this year.

“News that the country will invest £700m more in its flood defences will be welcomed by the many farmers and their families who have faced devastating damage this winter. But we should be clear this is funded by an increase in insurance premiums for all. I am also seeking assurance that the planned £40m per year increase in maintenance expenditure will protect deserving rural communities as well as urban areas.”

He added: “We will study the implications of the proposed levy on sugary drinks and respond to the Government’s planned consultation, but it is reassuring that the Chancellor confirmed that neither milk based nor pure fruit juices will be included in the levy.”

Responding to the headline grabbing tax on sugary drinks, FUW President Glyn Roberts said: “This is very welcome news as we aim to have a healthier population. Current levels of obesity are unsustainable and the obesity problem among young people is so bad that the present generation of parents may be the first to bury their children.”

“As such we advocate a healthy lifestyle with a balanced diet and milk has a part to play in that.

“In light of this we welcome that milk-based drinks are excluded from the sugar tax and encourage parents to ensure that their children get to drink the recommended amount of milk per day,” he added.

The Union further welcomed that fuel duty is to be frozen for the sixth year in a row as a rise could have a devastating effect on the Welsh farming industry.

“Fuel price rises could have a devastating result for farmers and all the rural communities in general as a car is essential in the countryside with public transport being so poor,” said Mr Roberts.

Commenting on the Capital Gains Tax cut from 28 % to 20 %, and from 18 % to 10 % for basic-rate taxpayers, FUW Director of Finance David Parker said: “This is a positive move for any farmers who are selling any or all of their farm.

“We must also welcome the Commercial stamp duty 0% rate on purchases up to £150,000, 2 % on next £100,000 and 5 % top rate above £250,000.

“The young person’s ISA is of importance to self-employed people enabling up to £4000 p.a. to be saved tax free up to the age of 50 with government adding 25 % bonus to savings.

“This is possibly where the wider pensions market will be heading over the next few years with tax relief on the receipt of pensions rather than tax relief at the point of saving.

“This provides a new vehicle for younger self-employed people to commence pension savings aided by the government contribution and must be welcomed,” he added.