Rarely does a Chancellor directly mention a lobbying organising in his budget speech, so when he name checked the NFU this week we knew our work was having an impact at the highest level.
Speaking to a packed House of Commons George Osborne announced: “The National Farmers Union have long argued they should be allowed to average their incomes for tax purposes over five years; I agree and in this budget we will make that change.”
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The NFU has consistently pursued an extension to farmers profit averaging as a vital way in which the government can help farmers manage the effect of volatility. We are extremely pleased with the announcement, which Liz Truss, the Defra Secretary of State, suggested will help 29,000 farmers and make a difference of £950 on average.
It is the recognition of the impact of volatility on farm businesses and the need for farmers to continually reinvest in their businesses that is most pleasing. It is something that many of us across the NFU have been saying for some considerable time and a message that our members have also been delivering at NFU meetings and when MPs, including the Chancellor, have visited their farms.
Our members’ ability to highlight the effect of volatility on their businesses has clearly been instrumental, and demonstrates how the NFU works both for and with its members in successfully delivering key industry messages and obtaining change.
There is however more work to be done. The detail of the new version of profit averaging has yet to be decided and the NFU will of course be involved.
For example, we believe that farmers should be given the choice over the period to be averaged, up to a maximum of a five year period. That could be two, three, four or five years. In addition there are other measures we suggest would help manage volatility and allow and encourage investement.
On the subject of encouraging investment we were pleased to hear the Chancellor say that he has listened to business groups and now accepts that returning the Annual Investment Allowance to just £25,000 would be unacceptable. This too has been a longstanding key NFU policy message, is part of our manifesto and something that members have been raising with both MPs and prospective MPs in the lead up to the general election.
We need Government to keep listening to British farmers. Through the work of our policy, food and farming, regional and political teams we will make sure that happens.