“Running a food and farming business right now is tough” – was the overarching message of NFU President Minette Batters’ letter to Chancellor Jeremy Hunt.
With the Autumn Statement due on 22 November amid a continuing trend of increasing input costs for agriculture, the need for stability and certainty is “fundamental to enabling long-term business investment decisions”, Minette explained.
Minette outlined the pressure points on farming businesses; as well as fertiliser and energy costs, farmers are also facing cuts to direct support payments while new support schemes are yet to offer similar levels of support.
What are the NFU's main asks?
Over the last two years, the government has had to intervene to support domestic and commercial consumers access affordable gas and electricity. Whilst Russia’s invasion of Ukraine has been a clear catalyst and driver of energy market volatility, the market infrastructure for commercial energy has facilitated extra risk.
The NFU is calling for a HM Treasury review into long-term energy contracts in the commercial sector and improved transparency in this market, making it easier for businesses to select which provider/contracts suit their needs.
“At this year’s Autumn Statement, the Chancellor could really inject some much-needed stability and confidence into the UK’s food and farming sector.”
NFU President Minette Batters
Clarity on ELMs and Tax
The NFU has called on HM Treasury to remove the uncertainty over the tax treatment of agricultural land entered into environmental schemes, especially the government’s own ELMs (Environment Land Management schemes).
Currently APR (agricultural property relief) is available on agricultural land whether used by the owner or a tenant. Whilst many of the options available under ELMs in England would not result in land ceasing to be in agricultural use, there is some uncertainty around some options.
We gathered views from our members and responded to the consultation on APR, stating that the government must remove this uncertainty – or risk undermining the confidence in and uptake of these schemes, as well as the government’s own environmental ambitions.
Environmental markets are an emerging area of interest to farmers but are currently poorly defined and largely unregulated.
The NFU believes a HM Treasury led cross-government taskforce is best placed to ensure the regulation and oversight of environmental markets in the UK is fit for purpose.
In order to ensure UK farmers can tap into the potential of new environmental markets, the government must devise effective governance mechanisms as soon as possible.
Making Tax Digital for Income Tax
The NFU has engaged with HMRC on MTD (Making Tax Digital) for Income Tax over many years, highlighting areas of particular complexity for our members. However, we are now concerned that the requirements imposed on many of our members will be disproportionate, administratively burdensome and extremely costly.
We are asking for concerns around quarterly updates and Basic Period Reform to be addressed and for specific easements be applied to a minority of businesses including removing the quarterly update requirement.
Building a foundation for the future
Additional points highlighted in Minette’s letter include asks around the Slurry Infrastructure grant, capital allowances for both incorporated unincorporated businesses to help incentivise low-carbon investments, and a further round of the REPF (Rural England Prosperity Fund), with a longer timeframe and expansion to all rural communities.
Looking ahead to the statement, Minette said “the Chancellor could really inject some much-needed stability and confidence into the UK’s food and farming sector”.
“As well as delivering short-term certainty, the NFU’s asks will also help build the foundation for a long-term farming framework, incorporating both public and private finance, to deliver the country’s environmental, productivity and food security needs.”