The NFU has written to the Chancellor outlining the key asks for farming ahead of the October 30 Autumn Budget, including the need for a multi-year agriculture budget of £5.6 billion.
New chancellor Rachel Reeves’ first budget will set out the government’s financial priorities for the next parliament and the NFU is keen to ensure farming is not forgotten.
NFU president Tim Bradshaw said he was ‘heartened’ to hear prime minister Sir Keir Starmer’s words during a keynote speech at the NFU’s Conference last year, in which he said a Labour government would ‘seek a new relationship with the countryside and farming communities on this basis’.
“It has been reassuring to hear the new government recognise that food security is national security,” Mr Bradshaw wrote in a letter to the Chancellor. “What farmers, growers and the public now need to see are practical policies that deliver on this shared mission.”
The NFU’s 7 key asks
1. The agriculture budget
The agriculture budget in the previous parliament was £3.1 billion a year. HMT now need to be clear that the food security, climate change and environmental challenges we face need to be matched by a renewed and improved financial budget.
This is also the view of environmental NGOs, highlighting cross-sector consensus on the urgent need for a ring-fenced agriculture budget.
Rather than ‘money for farmers’, this is about safeguarding our food security and our farmed environment. It is funding that will give farmers the confidence to invest for the future and help make the government’s aims around sustainable food production, affordability of food, energy security, the environment and net zero possible.
NFU-commissioned research by The Andersons Centre indicates that an annual agricultural budget for England of around £4 billion would support the delivery of a balanced agricultural policy which underpins global competitiveness.
2. Clarity on APR
The NFU is seeking confirmation that there will be no changes to APR (Agricultural Property Relief) which currently exempts farmland from inheritance tax. It believes that any removal of APR is unlikely to raise much in the way of tax, but could lead to a contraction in the amount of rental land for farmers.
3. FHL tax change
The NFU is calling for a full consultation ahead of the proposed abolition of the FHL (Furnished Holiday Lettings) regime which comes into effect in April 2025.
Announced by the previous government, the change to the taxation of FHLs was done in a bid to increase the properties available for more permanent rental.
The NFU strongly opposed similar plans in 2009 and will do so again, with the FHL regime seen as an important source of diversification for farm businesses.
4. Resourcing
The NFU is calling on the government to ensure there is adequate departmental resourcing in place to deliver Defra’s Farming and Countryside Programme, maintain flood defences, and deliver the government’s new strategy to eradicate bovine TB.
5. Capital allowances to incentivise investment
It is asking for the introduction of capital allowances, for both incorporated and unincorporated businesses, to incentivise the investment required in a broad range of climate smart capital investments.
6. CGT rates
If CGT (Capital Gains Tax) rates are to be increased or aligned to income tax, they should only be applied to non-business or short-term gains, the NFU says.
7. Rural prosperity fund
The NFU is asking for confirmation of a further round of the REPF (Rural England Prosperity Fund). The fund is a replacement for EU structural funds such as LEADER and the Growth Programme.
Mr Bradshaw added: “I seriously hope the Chancellor will consider announcing these policies at the Autumn Budget to give farmers across the country the security and confidence to be able to plan for the future and grow their businesses.”