Election 2010: Hung parliament ‘good for farmers’

A hung parliament could be bad for Britain but good for farmers, believes a former banker.

Farmers could be among the few beneficiaries if no party secures an overall majority in next week’s General Election, said Pat Tomlinson, former head of agriculture at HSBC Bank.

“A hung parliament wouldn’t be good for the economy as a whole,” said Mr Tomlinson, who is now head of agriculture at the Moore Scarrott Partnership, a firm of Somerset accountants.

“But farmers could be beneficiaries, at least in the short term,” Mr Tomlinson added.

Opinion polls continue to suggest the 6 May will be the first General Election since 1974 to result in a hung parliament.

The situation would leave the government unable to pass laws without support from members of other parties.

Pundits believe the lack of a clear winner would be bad for Britain, causing the value of sterling to tumble.

But sterling’s weakness would be a net gain for UK farmers, said Mr Tomlinson, because it would boost subsidy payments calculated in euros.

The cost of imported farm inputs, such as fertiliser, would rise, he said.

But any increase could be more than offset by an exchange rate that would make food exports easier while increasing the value of subsidies.

Farming would have to take its share of any painful government measures, including higher taxes and cuts in public spending to fix the economy.

But Mr Tomlinson said he expected agriculture to suffer less than other industries.

• For more analysis on the impact of a hung parliament click here and to see other reports on the General Election click here.