Farming and small business organisations have dismissed Alistair Darling’s first budget as a missed opportunity and criticised his renewed attack on the owners of large vehicles.

Budget Quotes:

  • Sadly there is nothing in this budget to support the farming community – NFU Mutual
  • The Chancellor has failed to take any action to stem the haemorrhage of cash flowing out of the countryside – Country Land & Business Association
  • The Chancellor’s vision of a fairer Britain in which everybody can succeed will never be realised if fuel duty continues to rise – Farmers’ Union of Wales
  • The Chancellor has missed a golden opportunity to convince the small business community that he is on their side – Forum of Private Business
  • Rural people are not after special favours, but they deserve a level playing field – Countryside Alliance

NFU Scotland said the reform of the road tax (vehicle excise duty) system from April 2009 and a further 2p hike in fuel duties from October of this year would heavily affect farmers and all those living or working in rural Scotland. (See our Budget landing page.)

President Jim McLaren said: “The fundamental principle here is that farmers drive 4x4s because they are essential tools for the job.

“The Chancellor is clearly trying to penalise those driving big cars in city centres, but hikes in excise duty next year will also be penalising those who have no alternative.

“Particularly after the dismal year faced by many farmers in 2007, an extra ‘showroom’ price hike on what is an essential business tool is another slap in the face.

Vision of a fairer Britain

The Chancellor’s vision of a fairer Britain in which everybody can succeed would never be realised if fuel duty continued to rise, said Farmers’ Union of Wales president Gareth Vaughan today.

“All increases in fuel prices are inevitably passed down the supply chain to the consumer through higher transportation costs and rural areas always bear the brunt of these costs.

“With duty already at over 50p per litre – the highest rate in Europe and double the EU average – accounting for almost half the cost of petrol and diesel prices, Mr Darling’s planned increases are yet another blow to a farming industry slowly recovering from last year’s foot and mouth disease crisis.

“We believe that 4x4s used by farmers should be exempt because they are a necessary working tool and not a so-called ‘Chelsea Tractor’.

“Mr Darling said his Budget was about equipping Britain for the times ahead and building a fairer society. It is certainly not a fair budget as far as the to win far more local procurement contracts in the future,” said Mr Vaughan.

Rural businesses

The Chancellor had failed to take any action to stem the haemorrhage of cash flowing out of the countryside and has done nothing to provide rural businesses with a much needed transfusion, said the Country Land and Business Association.

Henry Aubrey-Fletcher, CLA president, said the Chancellor had done nothing to help small unincorporated businesses – which included the vast majority of rural businesses – and for them the rate of corporation tax had actually increased from 19 to 21 per cent and would rise to 22 when allowances fell.

“It seems that the promises to rural proof government policies have been long forgotten and the countryside has once again been left as the Cinderella at this particular ball,” he said.

“This Budget is more about what has not been done to help smaller businesses, rather than an announcement of any genuinely proactive and positive measures,” said the Phil Orford, chief executive of the Forum of Private Business.

“While there are some welcome initiatives, they do little, if anything, to offset the tax burden due to be implemented in April. The Chancellor has missed a golden opportunity to convince the small business community that he is on their side.”

Green measures

Countryside Alliance Chief Executive Simon Hart said: “A week after the Government’s own rural adviser, Dr Stuart Burgess of the Commission for Rural Communities, reported to the Prime Minister on the appalling rate of poverty in the countryside, this is not a budget of joined-up thinking from Government.

“Hiking already high taxes will have an adverse effect on rural communities who have poor public transport services and therefore rely heavily on private car use. The Government should recognise that many low-income families may soon be stranded, unable to afford to run a car.

“Green measures are either right or wrong, and leaving the planned rise to November is only delaying a measure that will seriously affect the rural economy. Many of our members tell us that they are faced with long round trips to visit their GP or dentist, because local services have already closed. Making those journeys even more expensive just increases the unfairness.

“Rural people are not after special favours, but they deserve a level playing field, and the Chancellor must create a tax policy that addresses the problem of poverty in the countryside, not compounds them.”

Disappointing

The Chancellor’s 2008 Budget was disappointing for farmers with a ‘wealth of missed opportunities’, said NFU Mutual financial planning specialist, Shelagh Hamer.

“A number of simple measures would have provided a real boost for farming families. The £3600 threshold for non-earners pension contributions has not increased since its introduction in 2001, and is falling way behind the level needed to meet the retirement needs of rural people.

“It seem completely illogical not to have brought this limit into line with the newly increased ISA allowance.

“It’s also a real worry for country people that there is no mention of their special transport needs in the announcement of a review of Vehicle Excise Duty in 2009.

“The plain fact is that country people need vehicles to get about. Public transport is simply not an option in most rural areas, while farmers often need powerful 4 x 4 vehicles to get about their farms and tow trailers.

“Sadly there is nothing in this budget to support the farming community.”