Industry bodies in the farming sector have expressed their opinions over the Autumn Budget, unveiled by Chancellor Rishi Sunak yesterday.
Supporting critical investment in British farming businesses
Minette Batters, president of the National Farmers’ Union (NFU) said that whilst farm businesses will welcomes the Chancellor’s announcement to extend the temporary increase in annual investment allowance for plant and machinery to March 2023, there needs to be a longer-term roadmap for capital allowances from 2023, which he says must incentivise all forms of capital investment including infrastructure.
She criticised the lack of plans from the government to develop its export strategy to help UK farmers grow their markets overseas, or for not giving any details on overhauling government procurement practices to increase the provision of fresh and nutritious British food in schools, hospitals and other public sites.
She also pointed out the lack of focus on net zero funding, with that businesses will benefit from the business rates investment relief for green technologies, calling it ‘a positive move to support continued investment in renewable energy’ which ‘may help in UK farming’s ambition to achieve net zero by 2040′.
“As we have already highlighted to the Chancellor, future farming schemes have the potential to deliver meaningful, widespread and long-term benefits for Britain,” added Ms Batters. “It was therefore positive to hear that Rishi Sunak will provide Defra with much needed additional resources and funding to deliver its plans to support the essential transition to a new agriculture policy.
“The NFU’s Levelling up report highlights how investment in British farming and rural Britain can bring huge benefits to the entire nation; delivering jobs, green growth, exports and improved health and wellbeing. Farm businesses have a key role in the government’s investment-led recovery. With an ambition to reach net zero by 2040, British farming can be a pivotal part of meeting our climate ambitions and increasing the production of sustainable climate-friendly food.”
Saving tax should not be the driving factor
Responding to the news that the Annual Investment Allowance extension (AIA) will continue to be extended to £1m to 31 March 2023, Jonathan Armitage, head of farming for property consultancy Strutt & Parker, said this was good news for farming businesses which are currently facing a number of difficult challenges – including rising input costs, labour shortages and significant changes in agricultural and environmental policy.
“The ability to claim 100% tax relief on qualifying plant and machinery does at least help to support investment, which is likely to be required as part of a strategy to develop robust, sustainable businesses for the future,” Mr Armitage.
However, he said that saving tax should not be the driving factor in making investment decisions within a farming business, despite it being a ‘very useful’ tool where capital expenditure is being planned.
A vote of confidence for the English and Welsh wine sector
Responding to news that the duty rate for sparkling wines is to be reduced, Nick Watson of Strutt & Parker’s viticulture group, said the Chancellor’s announcement that the rate of duty paid on sparkling wine is to be reduced is ‘welcome and a further vote of confidence in the English and Welsh wine sector’.
He added: “Whilst he could have gone further by offering a lower rate of duty on UK produced wine, his planned changes will go some way towards encouraging consumers to choose UK wine, as imported wines are often of higher alcohol content and so will pay more duty in future.
“Ultimately, the changes will make very little difference to the cost of a bottle of wine, but UK wine producers’ continued focus on attention to detail and quality will support the continued success and expansion of the sector on the domestic and international stage.”